May 2013 • ENTERPRISE 19

Many are the great dreams and schemes concocted by Canadians holed up in storm-battered tents. Very few of these “big ideas” survive the night, let alone the available sup-ply of recreational consumables. Fewer still

materialize into enterprises remotely comparable to Mountain Equipment Co-op, the Canadian cooperative empire that now boasts some three and a half million members and over $300 million in annual retail sales. But then again, MEC was never an ordinary dream. . To members of Canada’s climbing scene, the story of MEC’s humble beginnings is the stuff of legend, a tale of starry-eyed idealism and youthful pluck that began in a small tent at the base of Mount Baker, the glacier-capped, Washington State volcano visible on the inland hori-zon from Vancouver to Victoria, and as far away as Seattle.

The spirit of cooperation powers MEC’s success

b y N aTa l i E b r u C k N E r- M E N C h E l l i Photogr aPh by rich Wheater

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still be competitive in the greater Vancouver market. “Kudos to REi for helping MEC in our early years by wholesaling some goods to us,” says golling, with a nod to the sixth prin-ciple of cooperatives, Co-operation among Cooperatives.

another MEC founder, Rob Brusse, adds that from its earliest days MEC was closely aligned with the cooperative movement. He says MEC offered rebates to members based on their annual purchases, minimizing not only operating costs, but also non-essential surpluses and related taxes. “MEC was also strongly supported by the B.C. Central Credit Union [now Central 1] — our lender of the early years.”

Today, there are very few households in Canada (and much of the States, for that matter) that can’t produce a MEC backpack or all-weather jacket from the hallway closet, and the organization itself does a bustling trade in product lines as varied as cycling, yoga,

it was the summer of 1970, and four young climbers from the University of B.C. were waiting out an unseasonal storm. The discussion turned to kit, and why it was climbers in British Colum-bia had to travel all the way down to Recreational Equipment inc. (REi) in Seattle (see sidebar) to purchase their mountaineering gear. it was decided during that long weekend that some-thing like REi was desperately needed in B.C.

“Some mountaineering gear was avail-able but expensive in Vancouver at that time,” explains Sara golling, one of MEC’s founding members. “The original idea was simply to start something to fix that problem — reduce the cost of going climbing so that cash-strapped students could get out in the mountains with good equipment.”

COOPERATIVE OR JOINT STOCK COMPANY?While the story of MEC’s origins often over-shadows its business workings, the influence

that the cooperative model played on what would become Canada’s largest member-owned and controlled consumer cooperative is just as noteworthy.

“Founding member Jim Byers was a well-informed fan of the cooperative model,” says golling. “at least one of the other founding members wanted the effort to be a joint stock company, but since Jim was the only one with the passion and the willingness to devote the necessary time and energy to getting the enterprise started, MEC became a co-op.”

and so it was agreed that the venture would be a co-op that operated with low markups alongside open, democratic, com-munity-minded principles. The co-op was for-mally incorporated in 1971 with six members and $65 operating capital. in the early years, Byers and his team worked closely with REi in Seattle to get MEC up and running. With a markup of 20 percent, the fledgling co-op could buy wholesale, cover import duties and

Courtesy MEC20 ENTERPRISE • May 2013

MEC has expanded to 16 stores across Canada, including this 25,000-square-foot, C2000 Green Building Certified outlet in Ottawa.

bers have access to information and education that helps them participate safely in outdoor activities while initiatives like The Big Wild (founded by MEC and the Canadian Parks and Wilderness Society) bring political will to bear on the plight of Canada’s backcountry, parks and public lands as resource and development pressures continue to find traction.

A CELEBRATED ASCENTThe future for the co-op, according to all those involved, is bright. last year MEC saw a 12.3 percent increase in product sales, from $270 million in 2011 to $301.7 million (unaudited) in 2012. Despite its many successes, MEC contin-ues to face its share of challenges. While increas-ing market competition remains a constant concern, golling says MEC is also facing a flag-ging interest in the great outdoors by its largest (and founding) demographic — Baby Boomers, who tend to gear down as they grow old.

irvine, however, envisions a bright (if

different) future for the enduring co-op born on Baker. He sees MEC stores becoming hubs of outdoor activity, offering outings, clinics, events, education and expertise alongside top-quality gear. For his part, Scott sees a future-MEC continuing to build on member inter-ests somewhat closer to home. “MEC remains dedicated to offering quality products for backcountry activity but has also expanded to support members in all their ‘front country’ outdoor activities such as running, cycling, yoga and travel,” he says. “This is a big step in helping Canadians lead happy, healthy life-styles and MEC is proud to show leadership in making this possible.”

From humble, hippie beginnings to a continent-spanning organization that has risen to challenges, adapted to change and built a firm foundation for the future, Moun-tain Equipment Co-op remains a Canadian cooperative superpower whose full legacy is yet to be written.

May 2013 • ENTERPRISE 23

products,” says Scott.in addition, MEC believes in testing its gear

in the field and giving fabrics and materials what MEC describes as “a real-world thrash-ing.” This includes setting up the tents in severe storms and throwing wetsuits into the pounding surf to test the durability of the component materials.

“The collective learnings from our testing program over the many years have given us the ability to not only search out and assess the best in technologies, but better understand where quality in the details is of equal impor-tance,” says Scott, adding MEC also encour-ages members to share product feedback via the review-and-rating system now available on mec.ca.

SURVIVAL IN A COMPETITIVE MARKETWhile competition in the sports and recreation retail sector remains stiff, MEC has managed to weather the storm. golling says new and increasing competition has pushed MEC to become stronger and has inspired the co-op to further improve in all aspects of its business.

John irvine, director of sports market-ing, believes MEC is successful because it listens and responds to its members. “This (ensures) that our product assortment and services offering reflects the needs of Canadians who are leading active lives in the outdoors,” he says.

irvine says that while MEC is anchored in traditional outdoor retail, and will remain anchored there, the organization continues to display a knack for timely adaptation, as it demonstrated with its early adoption of yoga, cycling and running product lines. irvine describes today’s store-based strategy as one that “includes races, clinics and workshops to inspire, educate, and to provide staff expertise in these activities, while helping members see MEC as a one-stop-shop for all their outdoor activity needs.”

MEC has always considered strategic partnerships a crucial part of its commitment to supporting the outdoor sports community. golling says that partners like the Canadian avalanche Centre help MEC ensure its mem-

running and fitness, hiking and camping, snow sports and watersports. But golling says back in the early days, “even mere survival was in question for a while.”

CORE VALUESFor its first three years, volunteers ran the co-op. There were no paid employees until the business was large enough to support a store with regular hours and to keep gear on the shelves. But fast-forward four decades and MEC has expanded to 16 destination stores in six provinces, some 1,500 employees and a product offering that continues to grow and evolve alongside changing lifestyles across Canada. and all of this was achieved not through glitzy advertising campaigns, but through word of mouth and a twice-yearly catalogue.

While competitive prices, high-quality goods and fair labour practices remain cornerstones of the organization’s business ethos, the paper catalogue has since been usurped by a website. “We opted to put more of our resources into the website and not to do a paper catalogue anymore, and to compensate somewhat for the lack of paper catalogue by increasing our advertising,” explains golling.

The move from paper to pixels dovetailed perfectly with MEC’s longstanding sustain-ability focus. “initially, the focus was on getting goods for members and keeping prices low,” says golling. “Sustainability, and by that term i’m referring to concern for environmen-tal protection, did not become a focus until the mid-1980s. Then corporate social respon-sibility — concern for fair trade practices, fair labour practices and less harmful materials and manufacturing processes — became a focus as well.”

Since the mid 1980s, the co-op has con-tributed more than $19 million in community grants toward outdoor recreation and envi-ronmental conservation projects. in 1987 it created The Environment Fund and donated money to the Federation of Mountain Clubs of BC to help preserve a popular climbing area called Smoke Bluffs in Squamish, B.C. in 1993, MEC established the Endowment Fund for the Environment. income from this fund helps finance MEC’s land acquisi-

tion grant program, which in turn supports organizations dedicated to conserving areas of ecological and recreational significance. The outdoor sporting goods retailer has even stepped in to help mop up oil spills, mobi-lizing its staff for the clean-up of the 1989 nestucca barge oil spill off gray’s Harbour, Wash., when an 87,400-litre slick was pushed up along the west coast of Vancouver island by the prevailing winter winds.

TESTING, TESTING, 1-2-3While ecological responsibility remains at the core of MEC’s philosophy, the co-op attributes much of its success to an unwavering focus on the integrity of the MEC brand. and under-pinning that integrity is the rugged, lasting durability of MEC merchandise.

greg Scott, MEC’s director of product integ-rity, says MEC has a comprehensive materials and product testing program run by materi-als analysis engineer John Shen at its head office on West 4th avenue in the False Creek Flats area of Vancouver, as well as field testers across Canada managed by product field test-ing coordinator gord Betenia.

“The materials and product testing pro-gram has been, and continues to be, an essen-tial cornerstone of MEC’s success in support of our commitment to our membership to consistently deliver first-quality performance

22 ENTERPRISE • May 2013

Facts about MEC membership . Anyone can join MEC by buying a $5 mem-bership share (called a subscription share). It allows you to purchase goods and vote on how the co-op is governed. The cost has remained the same since 1971.. Members must be at least 16 years old and own at least one share (shares are unlimited). . At the end of the year, any surplus profit is returned to members in the form of patronage shares. — Courtesy of MEC

MEC Governance. MEC is classified as a first-tier cooperative, meaning that the cooperative provides services directly to members, and to members only.. There are nine directors on the board, with an annual election. In each election, three directors must be elected. The term of a director is three years. . At least one director must be a resident of B.C.

Recreational Equipment Inc.. REI was founded as a cooperative in Seattle, in 1938 by Pacific Northwest mountaineer Lloyd Anderson and his wife, Mary.. REI has more than 3.5 million active members and is governed by a board of 13 directors, one member being the CEO. Directors serve terms of one or three years.. REI members pay $20 for a lifetime membership to join and receive a portion of the cooperative’s profits each year based on a percentage of their eligible purchases.. Every March, active REI members receive their member refund in the form of an annual dividend notice. — Courtesy of REI