EXCLUSIVE: The Nation’s Oldest Private Food Co-Op Looks Back and Ahead
As it marks its eighth decade in business in 2024, Topco Associates operates in a market that is vastly different yet driven by some of the same basic needs and mindsets. The company has grown from its humble roots in 1944 to a global $18.3 billion corporation that is the sixth largest privately-held company in its home state of Illinois.
Considered the oldest-running food cooperatives in the country, Topco – which recently located to a new headquarters in Itasca, Ill., – currently manages 20 brands on behalf of its member-owners, including Basket & Bushel, Crav’n Flavor, Food Club, Full Circle Market and Simply Done. Beyond connecting grocers with packaged and fresh foods, the company drives value through aggregation in areas like pharmaceutical drugs and indirect spend.
[RELATED: Topco Introduces Latest Members of Board of Directors, Ops Team]
Progressive Grocer recently talked with Randy Skoda, Topco president and CEO, and Danell O’Neill, EVP of brand, marketing, human resources and corporate communications, about how the organization is building on its legacy that started at the Drake Hotel in Chicago in the waning days of World War II.
Progressive Grocer: How has the past shaped the present at Topco as you celebrate this 80th anniversary?
Randy Skoda: It started with a group of retailers in Chicago. In a lot of ways, it is similar now to back then – independents had to find a way to compete against a huge behemoth, which was A&P at the time. They had to figure out how to partner and maintain their independence and also be able to access products and services.
Accessing products was not that different than what happened during COVID. In a lot of ways, while the players are almost completely different, the foundation is really the same. It’s the independent retailers partnering where it makes sense to get scale.
Danell O’Neill: Many of these stores are the fabric of the local community, particularly in smaller towns. In a lot of cases, they may be the nearest "medical" facility, with their pharmacy and dietitians. Being able to keep them as independents, then, is really important to communities across the country, and we can help by providing food, and other staples.
PG: The pandemic, close to five years ago now, has lingering effects, doesn't it?
DO: Out of necessity, people made different purchases and choices. It put a resurgence on own brands and the importance of members’ own brands, without compromising quality or value. Shoppers realize that they have an alternative, and given the challenges today, that they don’t have to make sacrifices to their families.
RS: This is a generalization, but if you look at the teams at independent stores, they tend to be there for a long time and they have personal relationships with customers. There is a big trust factor there. Because they are smaller, the decisions that are made are a lot closer to their stores.
PG: As you get ready for your anniversary celebration, how is longevity a part of Topco’s own business?
RS: Our longest-term employee has been here 52 years. Of the 500 associates, we have that 52-year associate, we have 12 who have been here more than 30 years and almost 10% of our group has been here for more than 20 years. People have historically spent a long time at Topco from a career perspective.
The mission of Topco and the impact it has on helping independents and communities and consumers is really impactful for our associates, too, who are working on a good cause.
PG: How far has your influence spread in the eight decades that you’ve served grocers and their customers?
DO: We are nearing 70 million consumers who shop at our members’ stores.
RS: We have 46 member-owners, and they don’t do the same thing the same way. That’s what makes them successful, and our job is to support member-owners and where they are at.
Some things have changed from an innovation perspective. There was a time when the membership was looking to Topco to source things and get them a better value. They still do that, but now they are very much looking to us for innovation and category management, too. I would say Topco has transformed, particularly in the last five or six years, to being much more of a full-service operation. For example, we have a robust category insights team that looks at consumer trends.
DO: Our members use Topco brands to supplement their brands, and we have shifted how we work in the brand space. How we bring brands to market is by using shopper data and insights. As the decisions have moved in the shopper space, it’s not just about quality and value, but more around values, and our insights team has become even more relevant, because those values are guiding far more decisions.
PG: What are some of your notable brands and how do they tie back into your history and your forward-looking innovation?
RS: A majority of what we source today is done under members-only brands, like a Hy-Vee brand, Stater Bros. brand or a Brookshire's brand, and then there are other brands available to all members. Our Food Club brand is now over a billion-dollar brand and is carried by most of the stores that don’t have the scale to have their own brand, and that brand will have its 80th birthday next year.
Using the same shopper insights, we determined that it was time to refresh the Food Club brand and, from a customer perspective, connect to a mission. Not only do people want good food, they want brands that do good. This brand is going through a complete redesign and we have partnered with Feeding America as part of it.
DO: That’s a good segue to another piece of what we do. Topco works when our member-owners embrace each other and recognize the value of partnerships. We are all working together so they can remain fiercely independent. As we provide more value with insights, it wouldn’t happen if they didn’t make that commitment to each other.
PG: What other kinds of support do you provide to your members?
DO: We have a different aspect of our company that supports members with their infrastructure, from their HR benefits to waste management strategies to bags and wraps at the front of the store. In addition, we have provided a way for an aggregated pharmacy program for members to leverage to support their shoppers' pharmaceutical drug needs.
RS: It’s the same principle – we continue to find ways to make the independent grocers in the U.S. success, and scale is critical in that.
