The role of Co-operatives in the Irish
Organic Sector
Researcher: Eugene Lynch / Supervisor: Eoin Lettice
Centre for Organic Horticulture Research (COHR), LissArd, Skibbereen, Co. Cork
Background
Co-operatives are guided by a set of principles that are very much compatible with the International Federation of Organic
Agricultural Movements (IFOAM) principle of 'Fairness‘. These shared values make the co-operative form an ideal vehicle
for organic enterprise; as evidenced by the numerous producer, and consumer, co-operatives in the UK, US, New Zealand
and Japan. Despite this, and notwithstanding the success of Irish dairy co-operatives, the Irish organic sector has been slow
to embrace the co-operative form.
Objective
The objectives of this research were to identify if:
i. the co-operative form offers a competitive advantage to organic producer / consumer groups in an Irish context
ii. there are lessons to be learned from past experience
iii. there are opportunities for the adoption of the co-operative form by organic producers / consumers in the future
Study Design
Qualitative case studies, involving four in-depth openended interviews and an extensive literature review,
were conducted on a cross-section of co-operative
types that operate, or previously operated, within the
Irish organic sector (Figure 1).
All relevant material was imported into, qualitative
management software package, ‘NVivo’ and
synchronized with bibliographic reference management
software 'Endnote‘.
Each case study co-operative was analysed in terms of
its ‘Operational Effectiveness’ and ‘Competitive
Strategy’ (Porter, 2008)
Figure 1: Case Study Selection
Case Study
Reason for Selection
West Cork Organic Co-op First organic producer co-operative in Cork
and one of the first in Ireland.
Quay Co-op
Only organically certified
operative in Ireland.
Dublin Food Co-op
Only consumer co-operative in Ireland. Major
retailer of local organic produce in Dublin.
Wexford Organic
Growers
One of the first organic producer groups in
Ireland. A co-operative in everything but
name.
workers
co-
Summary
“Operational
Effectiveness
means performing
similar activities
better than your
rivals”
“Competitive
Strategy means
performing similar
activities in
different ways
than your rivals”
(Porter, 2008)
In analysing the performance of various co-operatives on the criteria of 'operational effectiveness'
and 'competitive strategy' we have illuminated the deficiencies in some and the successes of others.
West Cork Organic Co-op ultimately failed because it overextended itself financially. The strategy of
supplying organic produce to Cork city in the 1980's was farsighted but operational ineffectiveness
was its undoing. In contrast, contemporaneous producer group Wexford Organic Growers flourished
by maintaining a tight control on operational costs and implementing an equitable division of
responsibility amongst its members. A lack of competitive strategy from Dublin Food Co-op (DFC) has
resulted in what is ostensibly a consumer co-op reporting that producer members now account for
more than 50% of its sales. This 'mission creep' within DFC has resulted in internal conflict and
membership has dropped by 12% since 2009. Prudent fiscal management by Quay Co-op, coupled
with the bold decision to exclusively sell organic produce, has seen the co-operative expand its
operations despite the current economic downturn. Quay Co-op exemplifies how adherence to
operational effectiveness and competitive strategy will result in sustainable competitive advantage.
Conclusion
The research demonstrates that the co-operative form presents a competitive advantage over conventional corporate
enterprise but organisational structure alone does not guarantee success. Management have a key role to play in the
success of a co-operative and particularly in their ability to differentiate between operational effectiveness and competitive
strategy. The research suggests that with a well informed membership and the correct structures and processes in place
the co-operative form has the potential to significantly transform the landscape of Irish organic horticulture.
References
PORTER, M. 2008. What is Strategy? HRB's Must Reads on Strategy. Harvard Business School
Publishing Corporation.