In 1970, a group of Honolulu residents who wanted access to quality, minimally processed, natural foods began exploring the idea of starting a co-op. [ Co-ops are traditionally created to empower a group of people to have greater economic freedom and to improve their quality of life. The users or "owners" of the co-op are responsible for overseeing the governance and operation of the co-op.] By the end of 1970, these people had drafted the articles of incorporation creating a not-for-profit, consumer cooperative - Kokua Country Foods, Inc.
In February of 1971, the new corporation opened a retail natural foods store called Kokua Market. The store nearly closed in 1972 due to a lengthy dockworker strike that made it difficult to obtain shipments of groceries. The original bylaws of the co-op required that an owner must volunteer to a work shift in order to be able to purchase items at the store. Unfortunately, many people took advantage of the fact that there was no system in place to verify that an individual had actually worked in the store and was entitled to shop. This led to the implementation of an ownership identification card that was validated when an owner completed a volunteer work shift.
During the first two years of operation, the revenue of the store was not able to support the amount of rent being charged to the co-op and the board of directors decided to find another location with more affordable rent. Kokua was able to move to a 1,000 square foot site on Isenberg St. at a lower rent, in an area with a larger potential market base. The new Isenberg St. store began to attract new owners and the product lines were expanded. This sales growth continued through 1978, at which time the store took over an adjacent space, removed the dividing wall, and further expanded product lines. Sales continued to grow at a rapid pace.
In 1981, through the efforts of Kokua's General Manager and Board of Directors, the Hawai'i State Legislature passed a bill creating a Consumer Cooperative Association Corporate Charter, that allowed co-ops to sell owner shares without a securities permit. Kokua then reorganized under this new charter and implemented an owner share program. Under the new structure, people wanting to become owners of Kokua must purchase one share of stock. The par value of the share was set at $150 and could be sold back to the corporation at any time. A package of benefits for owners only was created, including: better prices; auto insurance at group rates; discounts at other area businesses; movie tickets at the group discount rate; a vote in the co-op Board of Directors election; and various other benefits. The original volunteer shift requirement was dropped, however, owners who work a volunteer shift receive discounts on store purchases (currently 15%).
The new owner share system began to provide capital that the co-op saved for future asset investment. By 1983 Kokua had outgrown the Isenberg St. location and needed