Cobargo Co-operative Society

An extended version of this case study is presented in Australia’s Leading Co-operative and Mutual Enterprises in 2020 by T. Mazzarol (part of the CEMI Discussion Paper series). 

The Cobargo Co-operative Society is a community-owned enterprise on the south coast of NSW. Originating as a dairy producer co-operative in 1901, it has evolved into a consumer co-operative servicing the needs of the regional community of Cobargo. In 2020, the co-operative had around 1,200 active members and generated an annual turnover of around $4.1 million.

The Cobargo story is one of an intimate connection and resilient bond between the local region and its co-operative. The history presents a 120-year relationship of mutual support that has seen both the co-op and the local community traverse immense changes and hardships.

Cobargo Co-operative Society fast facts (2020)

• Type of cooperative: Consumer co-operative
• Members: 1,200
• Years in operation: 120
• Turnover: $4.1 million

The foundation of the co-operative

In 1901, the Cobargo District Co-operative Creamery Butter Society was established to help provide a sustainable future for local dairy farmers, running a local enterprise including a butter factory. An initial 50 members signed up, motivated by a common need to find an outlet for their produce. By 1904 the co-operative had already begun to display a high level of performance. Membership had risen to 2,110 shareholders and the co-operative began exporting butter to international markets.

The co-operative marketed its butter under the brand names “Emu”, “Cobargo” and “Narira”, transporting its product by horse and cart to the NSW coast where it was further distributed by steam ships to Sydney and the UK. By 1908 the co-operative was producing around 47,880 lbs of butter a month, with an annual turnover of more than £12,000, of which more than 85% was distributed to members.

Early history

During the first half of the 20th Century the world experienced the challenges of the First and Second World Wars interspersed with the Great Depression. The co-operative continued to operate achieving record production outputs, making generous contributions to the War Food Fund, to help the people of Belgium who had suffered severely under occupation.

During the Great Depression, the co-operative continued to operate, although its members had suffered harshly. Prices were at a 20-year low, yet supply remained good with production high and costs satisfactory. Despite the hardship, the co-operative continued to produce high quality butter, which won prizes in the Orient Steam Navigation Company’s export butter competition.

Despite these global crises, the agricultural sector, specifically dairying, continued to progress through the application of new technologies and farming practice. Enhanced storage through the construction of silos, improvements in herd management, introduction of automated milking machines, and the adoption of milk pasteurisation all resulted in growing production throughout the dairy industry.

Change and the initial ventures into retail

In 1951, the co-operative changed its name to the now recognisable Cobargo Co-operative Society but continued to produce high quality butter. The co-op was awarded the NSW Department of Agriculture’s Certificate of Merit for the choicest grade butter in 1955, surpassing Norco Co-operative. Cobargo’s butter was not only superior, but it was also produced in greater volume.

Exports to the UK began to fall, and changes within the dairy industry, including intensive farming practices designed to enhance milk production and boost the overall productivity of the sector, resulted in significant restructuring of the dairy industry around the Bega Valley.

It was perhaps due to these changes, and the developing needs of members, that in this period the co-operative made its first ventures into retail, operating a shopfront store within Cobargo from where they sold dairy products, hardware, and farmer supplies. The retail store was housed in a former Army “Nissen Hut” where it sold axes, shovels and manual tools, and everything from hay, to grass seeds, and pet food.

End of dairy production and shift in purpose

Between 1971 and 1989 the total number of dairy farms in the area declined by 57%, and the survivors were larger and more capital intensive. The impact of declining dairy farming, industry restructuring, loss of export markets and drought placed the viability of the co-operative’s dairy factory under a cloud. Faced with this environment the Cobargo Co-op made the difficult decision to cease its manufacture of butter and close its factory.

The co-operative continued to operate but shifted its purpose from supporting the needs of dairy producers, to serving the needs of the entire community. The retail store that had been established and operated since the 1950s, along with other retail sites within the town, provided an opportunity to reinvent the co-operative, transforming it from a producer owned manufacturer to a consumer owned retail business.

The 1980s was also a time of social change for the Cobargo region. Cobargo was a “sleepy little town” however, within a decade the town had expanded. Cobargo took on a different life with new people arriving from outside the region, escaping the hustle of big cities.

Cobargo transformed into a tourist town and a “sea change” location for people who were seeking the beauty of the NSW south coast. The co-op’s membership also changed along with this demographic shift to which the co-operative’s board responded with a strategic decision to invest more into its retail operations.

The next decades were marked by steady expansion as the co-operative consolidated its retail operations and progressively upgraded its facilities. By the early 2000s the co-operative owned several parcels of land within Cobargo including its retail store and other buildings rented out as a doctor’s surgery, a hairdressing salon, clothing and gift shop, and a museum and tourist information centre. Today the co-operative comprises a large area within the centre of Cobargo housing a hardware, nursery, farm supplies, chemicals, outdoor furniture, pet and stock feeds, homewares, and paints.

Mutuality through disaster

Throughout their history, the co-op and the town of Cobargo have been all too familiar with disaster. The co-op had suffered a major loss with its original butter factory having burned down in the 1920s. Severe bushfires in 1939-1940, 1944, and 1952 plagued the region and erratic periods of rainfall significantly impacted dairy farming. The region saw extended periods of drought from 1978 through to 1983, with severe wildfires in November 1980 that raged through the Bega area. Adding to this, the town suffered severe flooding in 1971, considered to be the worst since 1919.

Throughout these hardships the community of Cobargo has always been able to rely upon its co-op to provide support and a central place to meet to face their challenges. No time typifies this more than the summer of 2019-2020.

The horrendous bushfires of December-January 2019-2020 which swept across large swathes of Australia significantly impacted Cobargo. The fires caused loss of life and severe damage to property throughout the region. Burning embers triggered spot fires keeping firefighters and locals busy in attempts to save their town.

The co-op’s response to this tragedy was decisive, immediately reacting to the needs of the community. The co-operative, understanding that its purpose extended well beyond that of simple transaction, demonstrated the epitome of social-minded values with a view to long-term community sustainability.

Despite the traumatic experiences of the bushfires and the COVID-19 pandemic the board and management of the Cobargo Co-op continues to remain optimistic about the future.

A future together

Out of the adversity has come something strong. For several years things had been difficult for the co-operative, struggling to achieve its financial goals. However, due to the co-operative giving such support and comfort to the community, the community is now reflecting that back. The community now looks toward the co-op as the business in the town, most viable to maintain the town’s services and help rebuild what was there before.

After the fires there were concerns that many businesses would never be able to reopen, however the co-operative has been considering ways to assist the town in its revival. Following the fires, the co-operative agreed under a bushfire recovery program through the Business Council of Australia (BCA), to provide its unoccupied land as a site upon which to build some temporary shops to help the people who had lost their businesses return and commence trading. This action by the co-operative signals to the community how much it is willing to support them by generously providing its resources for a common purpose.

Despite the traumatic experiences of the bushfires and the COVID-19 pandemic the board and management of the Cobargo Co-op continues to remain optimistic about the future. The co-operative’s previous expansions, facilities upgrade, and land purchases had placed the finances of the business under some strain. However, over the first half of 2020 things have improved dramatically. The co-op is now looking at ways to recognise the different needs of the community, and what goods and services the co-operative can supply.

For over twelve decades of challenge and change the Cobargo Co-op has dedicated itself to the wellbeing of its community. After the latest hardships, it has again renewed its commitment. While the board and management have no illusions that the future years will be easy, they have commenced on a pathway, bringing their community along in the aftermath of horrific tragedy.

As the co-op looks to the future to builds on its long history, it is now being guided by a newly developed set of statements of vision, mission, and values. These statements outline the purpose of the co-operative:

Statement of vision

Cobargo Co-operative Society Ltd. has a vision to support the community of Cobargo and surrounding districts to grow and prosper into the future, being open to how this may evolve. We aim higher than just economic growth, looking to support Cobargo’s social capital by being a vibrant and interactive place where community feel safe and supported to connect.

Statement of mission

Cobargo Co-operative Society Ltd. is a community-owned business that exists purely to serve the community of Cobargo and surrounding locale. Cobargo Co-operative Society Ltd. aims to provide for the needs of the Cobargo community with a high standard of customer service, integrity, honesty, and humility. Cobargo Co-operative Society Ltd. strives to provide as much variety as possible at competitive prices whilst focusing on growth into new areas to better support the sustainability of the area.

Cobargo Co-operative Society Ltd. aims to continue being one of the largest employers in the Cobargo district, and provide a safe, enjoyable, and flexible place to work.

Statement of values

Cobargo Co-operative Society Ltd. values the diversity of the area, families that have farmed here for generations, the new commers who see a future here, and the long history of traditional custodianship of this land. They reflect the hardworking, innovative, and caring folk who call Cobargo home, and in every aim to mirror this back to our customers, fellow staff, and business partners. At the heart of our work here is respect and consideration for all, striving for excellence, and above all serving the needs of Cobargo.