Created with venture capital funds from the NYC Economic Development Corporation’s (EDC) Thrive Competition, the United Business Cooperative (UBC) is a group of immigrant/minority operated restaurants in The Bronx. The organization, created and led by Henry Obispo, has become New York City’s first group purchasing organization for local restaurants and multi-unit food service operators that provides the benefits of collective purchasing with hands-on technical assistance and hospitality best practices. The UBC seeks to revolutionize the concept of small restaurants by leveraging purchasing power on behalf of members in order to negotiate supplier contracts that yield the greatest savings without sacrificing quality or standards.
In February 2013, a large group of restaurant owners organized in reaction to new city-wide regulations pertaining to the hospitality industry. Restaurant owners would no longer be allowed to utilize Styrofoam or plastic containers. Businesses would be regulated to use only bio-degradable materials effective 2016. Although significantly beneficial for the environment, this regulation would raise the cost of paper goods for small business owners by 20% to 30% – adversely effecting businesses, and inciting an exit from the market. In addition, significant penalties would be applied for non-compliance. SoBRO evaluated this situation as an opportunity to protect, enhance, and build the business acumen and economic development of what would soon become a target area of UBC membership.
Upon organizing this group of business owners, and using pilot funding from the Thrive Competition, UBC was able to develop a plan to empower small restaurant owners. The plan provided assistance in navigating the City, State, and Federal regulatory labyrinth, implementing modern inventory systems, collectively organizing similar businesses to maximize marketing potential, developing mature internal systems and processes to reduce costs, and integrating technology. The scaleable approach highlighted that with increased technical assistance, formal organization and incorporation, and implementation of best practices, not only would the UBC prevent businesses from closing, but that the UBC would spur economic development, job creation, and cost savings among members.
The United Business Cooperative (UBC) creates a level playing field. For years, chains have had superior purchasing power. Through the UBC, the buying power is back in the hands of the local restaurant owner. With its current scale and if provided round two Thrive Competition funding from NYCEDC, estimates that with this combined purchasing power current UBC members will add over $3 million annually to the economic vitality of the Bronx.