In a strategic move aimed at strengthening the Co-op system, Faithway Alliance, a joint venture equally owned by Tennessee Farmers Cooperative (TFC) and Alabama Farmers Cooperative (AFC), began doing business August 1.
Faithway Alliance will offer products from categories such as lawn and garden, farm hardware and fencing, automotive, horticulture, and home goods. It will focus on sales, marketing, customer service, procurement, inventory management, warehousing, and distribution at TFC, AFC, and Faithway Feeds.
“This venture [Faithway Alliance] will allow TFC and AFC to grow market territory, increase the customer base, and gain operational efficiencies by collaboratively working together to reduce risk,” says Bart Krisle, TFC chief executive officer.
The company was formed by combining TFC’s Farm Hardware, Home, Lawn, and Specialty, and Tires, Batteries, and Accessories departments; and the TFC Metal Fabrication Plant with AFC’s Farm Hardware, Lawn and Garden, and Home Goods business. Also, included is Alliance Farm and Ranch and Faithway Feeds, companies that were already jointly owned by the two cooperatives. The process of consolidating the operations was announced in spring 2019, and efforts have been underway since then to have the company operational by August 1.
Employees of TFC and AFC who worked in these product areas were in most cases automatically transitioned to Faithway Alliance.
“TFC and AFC have worked together over the last several years allowing their cooperatives to operate more efficiently and realize greater profits,” says Tommy Dailey, Faithway Alliance chief executive officer. Dailey previously served as vice president of property and purchasing for AFC. “We are excited about this new beginning, and we’re confident we will provide our customers with enhanced services and product offerings at competitive prices.”
The formation of Faithway Alliance is the latest move in a four-pronged strategy developed by the TFC board of directors and management to strengthen the Co-op system and position it for future growth. The four strategies were to:
1.Support member cooperatives
2.Focus on growth
3.Emphasize staff recruitment and development
4.Maintain financial performance.
“Faithway Alliance allows everyone involved to benefit from greater purchasing volume, increased inventory efficiency, and stronger vendor relationships that will reduce costs and improve product selection,” TFC Board Chairman Mark Thompson explained at the TFC annual meeting in November 2019. “The result is a competitive pricing model and continued income back to the member cooperatives.”
Faithway Alliance will provide stores in the Tennessee and Alabama cooperative system with products from categories such as lawn and garden, farm hardware and fencing, automotive, horticulture, and home goods. They will also provide products and services to some retail businesses outside the cooperative systems.
The member Co-ops remain locally owned, independent businesses and are not included in the joint venture. TFC will continue to operate the Fuel and Ag Equipment departments and offer support services to member Co-ops, such as regional accounting, Co-op Financial Solutions, risk management, human resources, marketing and communications, and others.
As part of its four-pronged strategy, TFC continues to work on developing joint ventures for the feed and agronomy areas of its business, too. Developments will be shared as soon as it is possible to do so, adds Krisle.