Why REI isn’t really a co-op.

Why REI isn’t really a co-op.

This video is sponsored by Dashlane In 1935, it was pretty hard to find good ice
axes. At least that’s how Mary and Lloyd Anderson felt when they decided to cut out
the middlemen and purchase a pair of quality axes directly from Austrian manufacturers
for the low price of $3.50. With axes in hand, the couple took to the mountains. But Their
friends soon yearned for the same inexpensive gear that the Andersons had, and so in 1938,
the couple created Recreation Equipment, Inc. to help their friends acquire cost-effective
and durable outdoor gear. But there was something special about the makeup of what would come
to be known as REI. With the popularity of communism and collectivist ideologies on the
rise, Mary and Lloyd Anderson created a membership-based co-op. Their friends paid a lifetime fee of
$1 to build the coffers of the growing company so that the Andersons could buy more and better
gear. In return for that $1, members, which at the time were primarily people the Andersons
knew, would get a yearly dividend from the company and reap the benefits of the discounted
prices. With this structure in place, a young co-op was born. But the scrappy outdoor gear
shop didn’t stick to selling to friends for long. Jump to the end of 2018, and it
now boasts 160 plus stores bringing in $2.78 billion in sales. Memberships have followed
suit, climbing to 18 million members at the end of 2018. REI is now a far cry away from
its humble roots, but it many ways it seems to be holding on to that image of the friendly,
neighborhood co-op that does right by its members and its community. But is that really
the case? Is REI the “ethical” and “eco-conscious” co-op that it seems to be painting itself
as or has its massive growth in recent decades defanged the purpose and benefits of the membership-based
co-op that the Andersons set out to create. Co-op can mean several things when it comes
to business or housing. Some co-ops refer to companies that are worker-owned and operated,
while others are housing systems collectively run and organized by the community within
the dwelling. The REI membership model is just one type of cooperative structure, meant
to involve customers in a collective decision-making process to counteract the hierarchical tendencies
of a typical business. The way REI functions, and indeed what may be the reason for its
success over the last 82 years is that when customers pay for the now $20 lifetime membership,
they receive yearly dividends from the company, which this year amounted to $204 million,
as well as voting power in the board of directors election process. On paper, these seem like
excellent benefits for the average customer: money back in your wallet at the end of the
year, and, if you want, a say in who runs the company. Honestly, compared to most big
box retail stores of similar size, this is a significant and positive difference. But
upon closer inspection, the “collectively run” aspect of REI seems to be a piece of
the co-op model that was left behind when the Andersons formally left the company in
1971. With 18 million members, it would seem like these shoppers could have a lot of sway
in how the company is run. But since 2005, the REI board of directors have consolidated
their influence and disempowered customer votes by only allowing board-approved candidates
to run for board seats. On top of that, the board now sets its own compensation. Previously,
board members were paid $4000 a year and typically were outdoor enthusiasts who owned a local
bike shops, like 14-year board member Angel Rodriguez. But, as the company sprawled across
the United States and management of the company became all-consuming, these board members
were replaced with career CEOs and financial consultants like current Board Chair Steve
Hooper. In 2018, each board member made $100,000. Former President and CEO, Jerry Stritzke made
3.24 million dollars. In contrast, the average hourly pay for an in-store employee was $10-$12.
As the board continues to distance themselves from the desires of members, it’s hard not
to question the authenticity of the “co-operative” part of REI co-op. Because, after all, if
the community have very little say in the company that they supposedly own a part of,
what’s the point in claiming the “co-op” title other than to market to outdoorsy, primarily
white shoppers like me who romanticize the idea of a co-op. In this way, the REI membership
program functions much more like a loyalty program at Costco than a viable way to run
the company collectively. How then, does this affect the environmental
actions and ethics of REI? Are their claims and aesthetically pleasing commercials about
sustainability like their use of the term co-op? All talk and a little bit of walk?
Much like its competing companies, REI seeks to position itself as a leader in the field
of “corporate sustainability.” It’s doing this through several avenues, some of
which are successful, and some of which are not-so-much. One of the company’s most promising
areas of environmental action has been re-commerce. Or selling used gear. REI is famous for its
members-only Garage sale, where they sell tons of used gear for low prices. And as the
company begins to focus on a circular economy model, they’re establishing an online store
for thousands of pieces of used gear as well as items for rent. This move towards used
and rental outdoor gear is promising because they’re not only diverting these materials
from the landfill but also avoiding the creation of new clothes, which ultimately means the
environment impact of production, manufacturing, shipping, and inevitable waste are done away
with. This emphasis on resale and rentals ties in with a company-wide goal of meeting
Zero Waste, or diverting 90% of its waste from landfills by the beginning of 2020. Unfortunately,
it’s now 2020 and they still haven’t achieved their goal. REI has since revised this plan,
and set a deadline for the end of 2020. Alongside waste and materials, they also donated
$8.4 million to non-profits in 2018 and took on advocacy work at the state and national
level seeking to “shift the American mindset around outdoor recreation, from a societal
nice-to-have to a must-have” But even as REI buys up renewable energy from local utilities
and slaps solar panels on their store roofs, they continue to run headlong into the problem
of growth. REI’s annual CO2e emissions have increased slightly since 2014, and when added
together with customer travel for their REI Adventures trip, the upward trend in emissions
is undeniable. So, REI is doing effective work in terms of minimizing their impact and
advocating for the protection of public lands, but their primary need for sales and growth
is counteracting these goals. “The reality is, many, many companies are
trying to fight on both sides of a war. In their main operation, in their lobbying activities,
they are pushing for an America that is merciless. And then, understanding the need to brand
themselves, understanding the need to soothe a little bit of the public anger in this age
of rage, they give a little back. They throw some scraps at us. And what is so sad is that
all too often it works.” That’s Anand Giridharadas, author of Winners Take All,
which investigates the way in which elites have transformed what it means to create social
change. What he says here is important to keep in mind when we’re analyzing these
“sustainable” companies. We have to discern whether we’re being fed scraps or being
served a whole meal. I’m harsh on REI because I think it’s important to hold companies
of this size to the highest standard. If you call yourself a co-op, you have to act like
one. REI does well by the environment and its consumers compared to others, but the
bar we set for companies nowadays is extremely low. REI seems like it’s a true advocate
in part because everyone else is doing so little. Their advocacy work is admirable but
it almost solely focuses on protecting wilderness areas, which is a convenient solution for
REI because it’s what their primarily white middle class customers want to see, and because
it ensures that there will continue to be natural areas around for customers to use
their gear. REI is certainly on the better end of the “Corporate Responsibility”
spectrum, but it still exists in a realm of companies using morally-coded actions to attract
more customers and ultimately more sales. In short, we’ve created an economy in which
buying a sweater is seen as a comparable replacement for calling up your elected official or protesting
on the streets. The idea being that when you buy that sweater, the company you’re buying
from will ideally do all the hard structural work for you. But the harsh truth is that
we can’t shop our way out of climate change. Yes, the choices we make when we do need to
buy something are important, some companies are better than others, but that is just a
small element of the climate action-puzzle, because, at the end of the day, more REIs
won’t equate to no climate change. I’m terrible when it comes to remembering
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offer code OCC to get 10% off premium. Hey everyone, thanks for watching the video.
I recently set up an email list for people interested in getting the occasional email
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below. As always, thanks for watching and I’ll see you in two weeks.

24 thoughts on “Why REI isn’t really a co-op.”

  1. Are you an REI member? How do you feel about the company?
    Also, I just created an email list! You can sign up here if you want: https://www.subscribepage.com/ourchangingclimate

  2. 4:01 career CEOs/big money. (:-( Decades-long member. Have been increasingly disenchanted with REI seeming more corporate. (:-( Hipster/yuppie greenwashing? I liked Black Friday #OptOutside campaign. Who remembers lifetime product guarantee? Boulder store community room no longer has talks, slide shows; now bike rental.

  3. Love all of your videos, I orginally thought the audio voice overs were monotone and uninspiring but your recent videos have been vocal and motivating, keep up the good work OCC!

  4. Great video.
    Is there any company/industry that grows without causing environmental damage?
    I would love to see good examples we can learn from.

  5. "we can't shop our way out of climate change." This is honestly the quote that hit home for me today. Very nice video as always 🙂

  6. Fantastic video! I agree wholeheartedly with the fact that we cannot shop our way out of climate change. Buying a t-shirt is not the answer.

  7. You should do a video on MUJI! They're a japanese company that takes pride in sustainability with their products but I'm not sure they're 100 percent sustainable.

  8. Their emphasis on recreation on public lands is also problematic from a decolonization perspective. "Public land" is stolen Indigenous land. Historically, National Forest Rangers were the cops that murdered and forced Indigenous people off their land, in some cases justified by "conservation," but ultimately benefiting white people with cattle grazing and lumbar. The current forest fire epidemic is a direct result of banning of Indigenous forest management practices because of REI-like early conservationalism. In many cases recreation occurs on public land that is a desecration to a nation's sacred and ceremonial sites, most famously the "Mt Rushmore" sculpture that occupies Lakota Sioux land.

  9. REI is an awesome store, but their stuff is so damn expensive I rarely buy anything there.
    It's basically for the ritzy people driving hybrids who wanna look outdoorsy

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