In today’s get-rich-quick capitalist world, the concept of a single-pay co-operative – which deals in lentils – becoming a role model on how to run a successful business‚ may go against the grain. But as Deputy Business Editor Sheryl Moore discovered, it pays to go green.
WHEN arriving at the right-on food firm, Suma, visitors could be forgiven for thinking they had stumbled into a New Age commune.
Bearded “members” glide around and, in the summer, cast aside their open-toed sandals to go bare-foot. The cook is busy rustling up a veggie lunch for both the members and the workers. Meat on the premises is banned. Workers chat about empowerment, free trade and group decision-making. And they are keen to stress “there’s very little authority at Suma”.
But this is no eco-warrior or hippie camp – it’s a thriving, 15m enterprise which has taken the wholefoods market by storm.
Tucked away on an industrial estate at Elland, near Halifax, Suma is the UK’s biggest independent wholesaler and distributor of wholefoods. It is also the country’s largest single-pay organisation. The business is wholly owned by its 56 members and 100 per cent employee-managed. It claims to be one of the very few genuinely ethical businesses around.
Each member of the workforce, comprising 56 Suma members and 51 workers, is paid the same rate – 17,000 a year. There are also profit-related bonuses, free meals and member pensions. And while members are effectively shareholders – each gives 1 to join, which they get back when they leave (without interest, of
course) – all profits are pumped backed into the business.
It’s an idea which would send many pinstriped board members reaching for the smelling salts – even more so when it emerges some of Suma’s employees have taken a massive pay cut to become members. But this a a food firm where greed is taboo.
It all appears rather worthy and terribly wholesome – highlighted by the fact that members voted recently not to give themselves a pay rise for the good of the business. And while the idea of common ownership, equality of wages and democratic decision-making for the run-of-the-mill entrepreneur may look like a recipe for disaster, it’s a concept that works.
Suma is a blend of self-confessed hippie ideals and commercial savvy. It’s a debt-free firm and boasts extremely low staff turnover. Cynics might say at 17,000 a year for packing lentils, it would have. Its turnover has grown year-on-year and the firm boasts about 2,200 live customer accounts.
“How many manufacturers can say that?” said long-term member, John Hart. “When I told one managing director of an engineering firm, he exclaimed, ‘I’ve only three accounts and one of them is on the verge of collapse’.”
Suma has undoubtedly benefited from the explosion in the organic market. Supermarket aisles are now packed with organic products, ranging from traditional pulses and lentils to tins of baked beans and spaghetti. And the market of what is termed in the trade as “light greens” – single professionals who have the cash to go organic and jump on the fair-trade bandwagon – is growing at a fairly robust rate.
Suma wholesales and distributes more than 7,000 vegetarian, fairly-traded, organic products. It also has an expanding portfolio of own-label goods, ranging from muesli and pasta sauces, to shampoos and eco-friendly toilet tissue.
The Suma brand is an area the members are looking to expand. The goods, which are largely sold to independent retailers, now grace the shelves of supermarket giant Sainbury’s. The Suma team played a role in helping the chain introduce its Well Being programme – a section of the store dedicated to the natural world.
The business has come a long way from its roots during the Seventies. The brainchild of veggie Reg Taylor, he began selling lentils and brown rice from the back of a van in Leeds.
“It was very strict wholefoods, favoured by the traditional open-toed sandals type,” said Hart. “It grew rapidly, but Taylor, who now lives in North Yorkshire, didn’t want to run a business, so he sold it to seven employees who formed the co-operative.
“At that time, there was a huge growth in worker co-operatives, and the team wanted to do business but didn’t want to run it in the traditional hierarchical way.”
Suma has stuck firmly to its co-operative principles. Hart admits that members and workers do have titles but he is keen to stress the titles reflect the job that they do, not the position they hold. “There is very little authority at Suma.”
There is a management committee – made up of six members – and all decisions are filtered through the committee, which meets once a week. “Our committee is made up of people who drive or pack in the warehouse to those responsible for marketing.
“After a two-year stint, the member can either put him or herself up for re-election or simply go back to the job they were doing before. Also, each person has to devote two hours of their week to packing in the warehouse,” said Hart.
Certainly, it is a labour of love for many of the members who have taken significant pay cuts to join the Suma gang.
“We have to make sure that our members are committed and if they are not, we want to know why. In some cases, the wages we pay are well over the odds but that’s how we maintain a committed workforce.”
Hart believes Suma’s flexible working practices and democratic decision-making are the keys to its success.
“Democratic management skills don’t exist in the UK. We are inventing them,” said Hart. “A lot of businesses talk about empowering workers but don’t really put it into action. Multi-skilling is the new management buzzword but we’ve been doing it for 25 years.
“Our ethical approach, the extreme empowerment of employees and the democratic decision-making process, have proven to be a great recipe for us. We have flourished in a fiercely competitive market by remaining true to our founding co-operative principles while being commercially acute.”
Hart readily admits Suma has benefited from the trend towards organic products. “Supermarkets have jumped on the bandwagon and increased awareness of organic produce. But the major multiples are only interested in the health aspect, and free trade doesn’t come into it. This is where we differ.
“For us, it’s not only about health, we are a true ethical business. Fair trade is a concept which is growing, and often we have to turn potential customers away because they do not fit in with our ethical policies.
“For a lot of our customers, it’s not only about health food, there’s an ethical concern. These products are more expensive and are not an option for some people, but for others they would rather pay a few pence more for fairly-traded goods, such as coffee.”
Worker-owned co-operatives are rare in today’s commercial Britain. But Hart claims the country is on the verge of a renaissance in co-ops.
“The Prime Minister has pledged his support to worker-owned co-operatives as an alternative to business. After all, Britain invented the concept but now lags behind the rest of Europe. In Italy, the whole construction industry is made up of co-ops, and at one of them, it’s alleged, a forklift truck driver was voted in as chief executive officer.”
Hart is a true advocate of co-operatives. “We’ve proved it works. One of the problems with British business is that decisions are often taken by one chairman or managing director and what they say goes, regardless of what’s best for the company. In a
co-operative, there’s no room for egos – everyone has their say.
“Admittedly, there are downsides; you can’t just act on your own, and decision-making can be quite ponderous, which does get frustrating at times.
“But as we have demonstrated, a co-op is certainly a healthy option.”