Date	Wednesday 6 January 2021
Time	7.00 PM
Location	via ZOOM Meeting
Meeting opened at	7.05 PM
Meeting closed at	8.35 PM

Facilitator (Moderator)	MC Members, Ran de Silva
Minute taker	To be recorded by Ran
Timekeeper	Bruce Diekman, Ran de Silva
Next meeting date	TBC

Acknowledgement of Country: Before we begin the meeting, I would like to acknowledge and pay respect to the traditional owners, both past and present, of the land we occupy and upon which we meet — the Gadigal people of the Eora Nation. It is also upon their ancestral lands that Alfalfa House is built.

The MINUTES of THIS MEETING are PROVIDED BELOW – they were edited from the recording of the event and questions & comments made on the night.

The recording of the Zoom meeting is available here if you want to revisit the meeting as it happened – the Access Passcode needed is: &M+8?aGy

AGENDA & BACKGROUND

1. Attendance and Apologies

Attendance (MC):

Attendance (Members):

Apologies:

1A. Zoom etiquette

Hand Raised, Hand Down facility – to speak in turn

Typing in questions for the meeting

(Ran, others)

2. Approval of Agenda

That the agenda be approved.

Moved:

Seconded:

Carried by consensus

2.1 INTRO Statement from the MC

The Members' Council is of the view that, unless there is significant and urgent, active member support to improve Alfalfa House's declining fortunes, there will be no option but to close our shopfront doors in the near future.

This is an extremely regrettable situation, but something we must face head on and together. The best case scenario, may be that the Alfalfa House Co-op entity can still be salvaged, to rise again another day, in another form. (PLEASE note that the Co-operative is separate from our retail business which has been trading at 113 Enmore Road for over 30 years).

The success of our efforts can only depend on your energies, follow-through and support as active members.

PLEASE READ on for background which will further explain our current circumstances, and outline ways YOU CAN HELP!

We welcome your INPUT, THOUGHTS & ACTION tonight!

3. Where we are, and what we know: Financial, Operating and Legal Position at 6th January 2021

BACKGROUND - how we got here (from 2 years ago)

Real position as at March 2019 - $82k in the red (not ~$50k as was thought), plus, as we now know, ~$15-20k of leave loadings, making a total deficit of ~$100k
Fundraiser raised $47k
Directors put in a further $25k – these are in the form of zero-interest loans to Alfalfa House, which all three Directors (Ashton, Bruce & Tom) have no intention of recalling, and cannot in any case without the MC's agreement.
COVID allowed us to build a small trading surplus (~$28k) through some great trading weeks, and government subsidies
So in June 2020, we were teetering on the edge of being a profitable enterprise .... BUT

WHAT THE CURRENT POSITION IS, and why the Directors have to act the way they do

Since July 2020, sales have consistently declined, despite every effort to increase range, increase stock density, increase opening hours etc
If our revenue is less than ~$85k per month, we trade at a loss, and this comes out of the small trading surplus we have built over the last 18 months
Based on current projections, Alfalfa House will be insolvent sometime in late January or early February 2021
The headwinds we are facing are all external influences, and are mostly macro-economic issues:
- High street bricks and mortar retail is down catastrophically (compared to last year)
- Footfall into AH has dropped off commensurately (we are heavily dependent on passing foot traffic)
- Fresh food farmers markets have reopened
- Many consumers have moved to online shopping
As soon as the Directors (your MC) recognised the severity and consistency of the situation, and the trajectory towards insolvency, they had a duty to both report it and act fast and decisively to prevent bankruptcy; this is what they have done so far:
- Reduced stock load in line with current sales trajectories
- Reduced staffing (and consequently opening times) to align staff costs to revenue
- Enacted the 'worst case' insurance policy of a potential wind-up of the Co-operative (in the event that it becomes insolvent)
- Commenced a structured winding-down of the retail operations in Enmore Road, in the event that an alternate operating model cannot be achieved by the end of January 2021
- Commenced consultation with members and staff to determine the capacity, ability and commitment to develop a revised operating model for the future
It is important to note that the winding up of the shop in Enmore Road is not the same as winding up the Co-operative (although they are both linked). The aim to close the shop before trading insolvent, would be to preserve the residual value of the Co-operative for the future. If the shop were to become insolvent, this would result in the Co-operative needing to be wound up as insolvent.

SOME OTHER CONSIDERATIONS

Breadth and capacity of MC, staff & voluntary support

The current MC is under-weight, and the situation will get worse unless we have willing and highly capable volunteers to support whatever the future brings
Anyone joining the MC MUST be aware of their Director's obligations
We have no Treasurer currently – this is a critical role (see point below)
Staff are also thin on the ground at present, and similarly at capacity, but some have already taken the lead on certain fronts, and can still provide back-up, social media and other help at times – Carina & Ran can speak to this, plus mention other staff/shop changes.

Requirement to identify and build AH v2.0 immediately

As above, this requires hands and feet on the ground - people who are willing to put their time and effort into making it a success. And not just one or two; this will require a super-human effort.

Practical considerations
- If we manage to close the doors to AH and remain solvent, we need a secure home for our remaining assets (fridges, shelving, EFTPOS terminals, etc.).
- We will need to strip and make good the store – this will require lots of volunteer hands on the ground at the end of January.

Recruiting a replacement Treasurer

We urgently need a Treasurer (i.e. member with financial expertise) to fill this role for at least for the next 2-3 months. Previous Treasurer (Tom) can provide info/logins for the person assuming the role, who will be required to do lodgements (BAS/IAS, Super -quarterly), payment approvals, and MC Board/Member financial reporting.

4. Financial Position at 31 December 2020

The following spreadsheets provide a snapshot of our Financial Postion at the end of 2020:

5. What we need to do immediately

5.1 Levy a non-compulsory Annual Subscription Fee for 2021

We did extremely well in the first 2-3 months of 2020, when we were able to raise over $20k by means of the compulsory Annual Subscription Fee (ASF).

At this moment, we cannot ethically enforce the ASF again, but an optional $5 fee first quarter in 2021 will be announced asap, together with options for members to pay more if they so wish, i.e. the $20 full annual fee, or higher. We have already had several offers to do this, which won't be knocked back.

Members who paid the 2020 ASF will still be able to claim the 10% discount, at least until January 31, 2021 in line with our standard period of grace. Any extension will be advised.

Members might also be willing to voluntarily sacrifice their present 10% or 20% discount to benefit the Co-op, but this will always be an individual choice.

FURTHER DISCUSSION ...

5.2 Approach our landlord for rent relief

A meeting happened this morning with our Real Estate agent, who has undertaken to approach our landlord.

Alfalfa House has enjoyed a blemish-free 32 years rental at 113 Enmore Road. In addition, the building we occupy has recognised problems, some of which impair our ability to trade more efficiently.

FURTHER DISCUSSION ...

5.3 Train volunteers to operate the tills

FURTHER DISCUSSION ...

5.4 Set up a working group to develop a formal Business Plan for AH 2.0

FURTHER DISCUSSION ...

6. What could AH 2.0 look like: the Big Picture – summary of options for the future of Alfalfa House

A completely voluntary organisation; and/or
An online operation; and/or
A hybrid model based in a low-cost space and 'back to basics'; and/or
Selling AH as a going concern as a Pty. Ltd company

7. Member ideas so far

All ideas are most welcome. However, anyone putting forward an idea has to be willing to act on it, step up, follow-through, and be part of the solution.

Please read the following notes from our preliminary members Zoom meeting on December 30, summarising our current situation & member ideas received & discussed to that date and since.

FURTHER DISCUSSION ...

8. Member ideas – new & other (ed. from input submitted last week)

Stevie Bee

• AH remains a cooperative, but operates as an extended buyers’ club.

• It is member-only; not open to the general public.

• Trading days and hours are determined by the membership and members are rostered to staff the ’shop’.

• All members must volunteer a minimum of 8 hours/month.

• Members volunteering above the 8 hours/month receive a nominated discount (maybe 10%) per shop for each 2 hours worked.

• Markups may be able to kept to around the 40% mark, making shopping very attractive.

• The Co-op is either entirely volunteer-run, or volunteer-run with a paid part-time manager to undertake purchasing and comms to members.

• Bulk-only, limited fridge items.

• Fruit and veg order for single specified day delivery.

• Members must purchase a minimum of $200/month. Must be made up in other months if on holidays for any month.

• The co-op maintains a board of directors.

• The co-op moves to a double garage (hopefully rented from a member). AH would not need a foot-traffic address.

• Subscription fee of $20 pa remains.

Peter Coyle: The key asset we have is the membership list. I don't see a 'bricks & mortar' retail future, but I see an online presence using the membership base to build a warehouse/pick-up model for the future. ANY solution that does not offer an online presence - in my view - is not a long term proposition for AH. There are existing farmer direct online portals (boxdivvy.com.au) that can be utilised to get the infrastructure, and having the sourcing/packaging fully volunteer based will - I think - will revitalise the AH model to a newer generation.

Johanna Somerville: Opening Hours – now that we have reduced hours it will be hard for people to shop after work. For me, I used to come between 5-7 weekdays or on Sundays. I would suggest that it could be better to be open 12-7 rather than 10-5? And closed Monday rather than Sunday? But only you would know which times/days are busiest, so I could be wrong.

Would it be worth reaching out to our extended community to see if anyone knows a retail small business expert, or consultant of some type that could volunteer their time and make recommendations?

This is the toughest one, and no doubt will be met with opposition. BUT, I do find the produce and many of the products at Alfalfa prohibitively expensive. Because of this, I only get a small proportion of my weekly shop at the store, even though I love it and want to support it. I appreciate that it is because our items are largely organic, but what if we were more open to non-organic items? I shop at Alfalfa because produce is local, to support my local community and reduce packaging and food waste. I would certainly be open to non-certified items if the price was considerably reduced. Perhaps others feel the same?

Antonny Ivancic: I wondered if the shortfall in funds could be addressed by a special contribution from members. Perhaps $20 - or whatever might be needed - cover the leave liability? It sounds as though trading revenue is healthy and if members could contribute funds via one-off levy, then could the crisis be averted?

Jim Morris: The suggestion pointing out atmosphere being a big attraction is very important. Shopping at the current premises is a struggle at times, particularly regarding lack of space for shoppers to put bags, crowding at the sink area for washing, weighing, access to utensils and use of work bench for filling jars and storing bags. It requires special commitment. Tills are too close to produce and the front door.

Sarah Baynes: I strongly think that the new shop hours need to be re-assessed. Not being open past 5pm means people who work a standard 9-5 are unable to shop during the week. For me personally, I usually pop in 2-4 times a week, spending $100-200 over the course of the week. I'll now only be able to come in on Saturdays, but still will only be able to buy what I can carry home on that trip, so my weekly dollar spend will be a lot smaller. I'm not sure how things are looking volunteer-wise for the closing shift, but as someone who did the closing shift for about 2 years, it may also be harder to get volunteers for that shift since it now starts earlier.

I think the idea of contacting every member by phone is valuable opportunity not just to encourage shopping, but to update the member database with addresses/skills, etc. If a move (either to another retail space, or to a warehouse/garage) is likely, then being able to use accurate member addresses to help guide the location decision would be useful. I think finding out what brings people to the shop (organic, plastic-free, local food, etc.) could also help with future planning. I'm happy to help with the phone questions and/or survey input. I also like the idea of a member-only buyers club type model, at least for the short to medium term while trying to get the co-op back on track.

Kathy Prokhovnik

I’ve read the agenda and suggestions and think they’re good ideas, particularly around members-only shopping and online ordering – volunteers could pack the order and the member could pick it up, meaning the co-op could be housed in a smaller space.
Please bear in mind people who live on their own, like me. Having to do 8 hours a month voluntary work would be too much, as would a $200/week minimum spend - I don’t spend that much on my entire weekly shop.
Accessibility is an issue for me – if shop hours are cut and it remains in its present location (which is quite inconvenient unless you’re walking) it will be even less accessible and will therefore generate even less income per month.
I would be willing to pay a higher annual fee and/or some sort of levy to ensure that the workers get all their entitlements.
I’d really like to see Alfalfa survive in some form, to buy bulk goods and organic fruit and veg but I agree that many products are just too expensive for me to buy. I do buy there as often as possible to support it.

Sarah Mares

If it is necessary to close the shop I really like the idea of a members only online bulk shopping option, a cooperative version of the dry goods and bulk oils, tamari, honey etc. A membership fee would be appropriate. Lower fee in return for time. Higher fee if no volunteering. I would regularly order bread flours, nuts, grains tahini, etc. Orders could be made online and then picked up from a warehouse/ garage, hopefully still in the Inner West. Volunteers could then do the packing and maintaining stock, etc. There might still need to be someone employed to manage the ordering, restocking, quality contol, etc.

Mel & Bill

1. Our wish is for Alfalfa to continue in some form as we would have considerable difficulty sourcing items we regularly buy at Alfalfa (gluten free, non-dairy, no plastic).

2. We do not have an interest in veggie boxes and shop in person. Shopping online is not of value to us as we shop on the day Mel volunteers.

3. Bulk ordering is again something that has little value to us. It would be good if there were items we could bulk order but the quatities would need to be considerably smaller (eg potatoes < 5Kg as they do not keep well at our place).

4. We do not have a car. Therefore the shop (or whatever) needs to be readily accessible by public transport - pereferably in Enmore or Newtown (we use the train)

5. We spend about $120 a week with volunteer discount.

I think we should bite the bullet and find a way to use more volunteers, have policies and procedures (and legal advice if needed) so we can use volunteers as much as possible, and put some real effort into finding new volunteers - or else give a real explanation as to why this isn't feasible.

Medium term concerns

I am not opposed to closing the shop. I think an online presence is important. I think walk-in is important.

There are many things we could do.

I do not see how the New York model could work well for us. Their shop is enormous, it is open very long hours, they are not in a safe neighbourhood.

It is impractical for everyone to volunteer 8 hours a month, when we have 2 tills, a small space for storage, etc. If the shop open is 10 hours a day, and 400 members working 8 hours a month we would have more than 10 members volunteering at any one time. And then we have customers?

I think this is important

With a member only shop and many (or all) people volunteering there should be no need for volunteer discount.

Offering a discount is either a reward to the member or an incentive to shop. If every member volunteers the reward is being a member and shopping.

Accumulating hours is not to Alfalfa's benefit (and therefore not to OUR benefit). People may want to keep their hours but if you work you get your member-only price. If you worked 2 months ago you had your opportunity to shop then. If you work extra hours then you would seem to be taking hours from another member.

FURTHER DISCUSSION ...