new food chain
MANY COOKS MAKE A RESTAURANT SUCCESS
Founded by unemployed workers, Casa Nueva in Athens, Ohio generated over $1 million in sales last year, while featuring locally sourced foods on its menu.

Leslie Schaller

Although Casa Nueva (“new house”) isn’t so new any more, the owners of this worker-owned corporation stay true to creating “what’s new,” both as a business and cooperative. Casa Nueva, the restaurant, began 15 years ago as a way to save jobs and chart new directions in our rural, southeastern Ohio community in Athens. As a worker co-op we’ve grown dramatically over the years, from a staff of 20 worker-owners to an average of 45 owners who receive full health insurance benefits and equitable wages. Sales have quadrupled, generating over $1 million last year. And we’ve diversified our original operations to include a food manufacturing division that produces a signature line of bottled products and bakery items.

HISTORY

Back in spring of 1985, I was one of a group of eight recently unemployed restaurant workers who decided to form a worker-owned restaurant cooperative. We had never run a business before, but among us had over 100 years of restaurant experience and the determination to create our own livelihoods. The Appalachian Center for Economic Networks (ACENet) (then Worker Owned Network) had recently formed to promote community-based economic development in the region. Through its staff’s tutelage, we developed a business plan, secured financing and created the foundation of our cooperative structure.

Our lack of financial assets was one of the largest barriers we faced as entrepreneurs. Through ACEnet’s assistance, we approached community members supportive of the cooperative concept to become lenders. Many small, unsecured loans and food barter arrangements provided the start-up capital for the business. Worker ownership was a very new idea, rather inconceivable in our community, so it took a little convincing, but we secured a bank loan as well. That combined with a lot of co-op members’ sweat equity and a “risk taking” landlord launched Casa Nueva as a Mexican-American restaurant on October 8, 1985.

In October, 1992 we opened the Casa Cantina in an adjacent storefront, enabling the business to offer additional beverage and entertainment options. The Cantina is a full service nightclub that features fine microbrews, “hard to find” beers from across the globe, and a rotating line of eight Ohio drafts, as well as a full liquor selection and array of fine wines.

Casa Nueva is now viewed as one of the most innovative and successful small businesses in Athens. In January, for the fifth year in a row, Casa Nueva has won The Athens News Best of Athens Readers Choice Award in the category of Best Local Business with a Conscience. Running a small business as a co-op, staying committed to community change and taking care of our individual financial needs continues to be our main challenge. As a worker-owned business, we work hard to accommodate both business expansion through profitability and membership investment in the corporation through member fees.

HOW OWNERSHIP WORKS

Throughout our history, we have consistently maintained a commitment to ownership opportunities for all employees. Every employee of the corporation has the opportunity to also become a shareholder. After the passage of a six-month trial period, new worker-owners are asked to make a minimum two-year commitment to the business and begin payments on their member fee, currently $1,200. Most new members choose to pay the fee through a payroll deduction plan. Upon entering the cooperative, all trial members receive an employee handbook describing the governing, financial and personnel policies of the business. Before employees are accepted into the cooperative, they are required to attend a number of workshops focused on principles of cooperatives and business finances to ensure their functioning as educated business owners who are fully aware of their rights and responsibilities.

The governance and financial structures of Casa Nueva are based on established models, including those developed by the Industrial Cooperative Association in Boston, and in the larger sense, by the Mondragon system of cooperatives in the Basque region of Spain. However, our success as a cooperative rests firmly on our ability to adapt these models to the goals and needs of the business and the individual co-op members. To a large extent, membership’s initiative to provide input on policies and procedures has paved the way for our overall development as an innovative, well-managed business.

The question asked most frequently is, “So who really is the boss?” Many wonder how it is possible for 40-plus individuals to own a business and operate it in an efficient and timely manner. An explicit system of decision making parameters and relatively conventional management structure determines who decides “what, when, how and how much.” The corporation is governed and owned solely by the shareholders (worker/owners) as a cooperative business. The Board of Directors oversees all aspects of the operations of the business and cooperatives. Similar to any corporation, Casa Nueva’s Board of Directors is the legal entity, that oversees the governance and finances of the business. The management team (comprised of ten managers) oversees the day-to-day operations of the business and reports to the directors and membership. All decisions are made by consensus, with each worker-owner casting one vote. Member meetings occur on a monthly basis and the Board of Directors and Management Team usually meet every week. This intense involvement with the governing of the business increases shareholder commitment and vision.

BUILDING A SUSTAINABLE FOOD EXPERIENCE

Casa Nueva started out as a Mexican restaurant. Although our core menu still features “southwest and Mexican standards,” our culinary range continues to evolve, offering our customers menu choices firmly rooted in natural and seasonal selections. Casa’s menu is as eclectic as its ambiance, blending quality ingredients that support our local economy with a passion for creating healthy meals with culinary flair. Serving a host of more traditional Mexican selections, the menu innovates those traditions with an emphasis on organic, vegetarian and vegan options.
Working with area market gardeners and farmers led us to develop a seasonal, more innovative menu plan. Our kitchen staff has routinely made farm visits to strengthen the connection between agriculture and the food service market. Understanding the challenges that our produce and livestock farmers face has made us more flexible about choosing different ingredients and more dedicated to educating our customers about sustainable food issues.
Although we offer numerous organic options, purchasing food that is locally or sustainably produced is mission one. Over time, we’ve developed relationships with our producers that encourage continual dialogue. We often work out arrangements with growers during the winter season for new varieties of produce or fruit that we hope to use on our menu or in the manufactured product lines. We also provide information on the quantities we will need, so that producers can increase volume.

“We put the same emphasis on buying locally in the salsa as we do in promoting ourselves,” says Mike McKniff, food manufacturing coordinator. Our menu and marketing materials always communicate the “buy local” message. Every menu has a page highlighting all of our vendors, so customers read about the bakery that produces our desserts or the farmers who provide eggs and poultry.

Recently, Casa became involved in Chefs Collaborative 2000, which promotes sustainable cuisine by teaching children, supporting local farmers, educating one another, and inspiring the public to choose good, healthy food. Founded in 1993 by Oldways Preservation & Exchange Trust with a group of leading chefs, Chefs Collaborative is now a national nonprofit membership organization of 1,500 chefs across America who are dedicated to the ethic of sustainable cuisine. Two chefs from Casa initiated the Adopt-a- School program at East Elementary School in Athens last spring. Shareholders have also attended sustainable cuisine conferences presented by the Culinary Institute of America. Networking with other restaurant businesses who share our values supports and inspires our work.

BOTTLED PRODUCTS

Casa’s dedication to local agriculture and our increased customer demand for natural food products led to the creation of the manufactured food division. In 1998, Casa Nueva began bottling salsa for retail sales from the restaurant and at local supermarkets. A year later, we had retail accounts in Ohio, West Virginia, Pennsylvania and Indiana.

The salsa product line — which includes hot, mild, chipotle, verde and habenero salsa — is produced at ACEnet’s Community Kitchen (see “Networking For Small Business Creation,” July/August, 1997). Utilizing the Community Kitchen made this new direction affordable and less risky for our business. The manufacturing team produces runs one to two shifts a week, depending on sales. Casa’s lease with the incubator includes office space, storage and hourly production time. Working in a shared-use facility also encourages new relationships with other food tenants to grow. Casa regularly purchases jars and commodities with other tenants and collaborates on marketing and delivery services.

The manufacturing division has also begun to experiment with a number of new bottled products, including pickled asparagus, jams, applesauce and peppers, to take advantage of our region’s bountiful seasonal produce. Many of these items are available under Casa’s “limited harvest” label. Wild Oats Markets, The Mustard Seed and numerous other independently owned, natural food retailers have spurred the demand for the Casa name brand. “Our goal is to expand our line to include seasonal salsas and special salsas,” says Roman Warmke, marketing director. “Eventually, our dream is to market baked goods and salad dressing along with the salsa to more regional accounts.”

Although the organization of our business may differ from conventional restaurant ownership, Casa Nueva’s continued growth demonstrates that establishing worker co-ops can be an effective economic development strategy that enhances the economic conditions of its owners and the community in which it operates. At Casa, we believe that our efforts are part of a larger movement in which owners can provide direction and vision to create a workplace in which all individuals are treated with equality, respect and compassion. And as citizens of our community, our business can enhance the social, environmental and economic well being of our customers, suppliers and business collaborators.

Leslie Schaller is a founding member and the business manager of Casa Nueva.