The Foundation of the Hive Café

Hive Board President Optimistic Despite Financial Issues

NewsVince Morello — Published November 7, 2016

“When we finished the fiscal year last year we realized that the revenue we made from our sales was not substantial to cover the costs,” said Leigh Hoffman, Finance and Admin coordinator for the Hive, in a previous interview. “In order to be a more sustainable business, that meant that changes needed to be made.”

At the end of the fiscal year, on April 30, 2016, the Hive Café had a net surplus of $5,045.

In its first fiscal year, which ran from September 2014 until April 2015, the café broke even, but costs have been rising. Salaries and benefits increased $88,247, from $152,768 to $241,015. This is because the Hive opened a kitchen and needed to hire a new coordinator and two cooks.

Another issue for the solidarity cooperative has been its Loyola location. The downtown location accounted for roughly 73 per cent in sales in 2016, while Loyola only accounted for a rough 27 per cent.

It’s something that Hoffman is aware of as the purpose of Loyola location is to provide students cheap, healthy food, knowing that sales aren’t going to be that high. “Part of the vision is that downtown will in part compensate and support the Loyola location,” they said.

In order to become sustainable, the Hive Café raised food prices and cut wages. Prices for food items made in house, such as sandwiches, soups and salads, increased by roughly ten per cent. Prices for food brought in from outside such as cupcakes, and croissants, increased by about 20 per cent. Barista wages were cut from $12 to $11 per hour, and cook’s hourly wages dropped from $14 to $12.

“We caught the problem a while ago and then we organized to address the issue,” said Ben Prunty, current board president of the Hive Café. “I would say that’s pretty regular for the first few years of an organization.”

What has helped the café run smoothly so far is a nearly $200,000 start-up fund provided by the CSU, approved on July 23, 2014. A portion of this is included in the Hive Café’s revenue of $67,777. Rather than give it all at once, however, the CSU has been handing out that money in chunks.

“Every organization requires start-up funding. If it was a private company, you would have another source of capital,” said Prunty. “This is a community project, and so the funding came from a community organization, in this case the student union.”

He added that the use of CSU funds was planned because of the challenges with opening up a new business.

The CSU has always had a close relationship with the Hive Café. Prunty is also a founding member of the Concordia Food Coalition, the group that supported the opening of the café. He took office as CSU President for the Community Matters slate during the 2014-2015 academic year.

“In our sustainability policy, there is a point to do business with companies that do give their employees a living wage. There’s a responsibility on our part to holding internal organizations like the Hive to similar standards.” – CSU Councillor Thomas David-Bashore

The students also voted in favour of the Special By-Law I, which will allow the CSU to use the Student Space, Accessible Education and Legal Contingency Fund for “the creation and expansion of predominantly student-run food systems projects on campus.”

“This was a really positive step, as myself and the entire Community Matters team is committed to the development of the Hive Solidarity Co-op Café, and with that the positive transformation of student space as well as food systems on the Loyola campus,” said Gabriel Velasco who was elected VP of Loyola at the time.

Initially, $95,286.11 was given to the Hive Café from that original fund on Aug. 6, 2014. On Jan. 14, 2016, another $19,658.89 was given to purchase equipment. The most recent disbursement of $30,000 was in mid-October.

Now only $49,523.10 remains of the original fund, and the CSU plans on giving out the rest in January and June 2017. With the Hive Café struggling financially, it’s up to the CSU’s finance committee to ensure that it reaches a certain set of conditions for the rest of the money to be disbursed. Parts of the conditions include providing monthly and quarterly financials to be reviewed by the committee.

“This was agreed on by the Hive board and […] the finance committee,” said CSU Finance Coordinator Adrian Longinotti. The remaining money, he said, has yet to be given but they are entitled to it, as per the agreement.

During the finance committee meeting in which the rest of the disbursement was approved, Thomas David-Bashore, a CSU council member, made a comment about the union ethically giving money to the Hive Café, considering the their minimum wage policy, and the fact that Hive Café has cut wages to be sustainable.

Since June 8, the CSU has supported the adoption by the Quebec national assembly of a $15 hourly minimum wage across all provincial sectors of labour.

David-Bashore said it was something to keep in mind for future financial interactions that the CSU has, and that it had nothing to do with the current disbursement.

“In our sustainability policy, there is a point to do business with companies that do give their employees a living wage,” he said. “There’s a responsibility on our part to holding internal organizations like the Hive to similar standards.”

Prunty said it would be “awesome” to get the point of being able to pay their employees $15 an hour. “We’re actually not that far off of that because of tips,” he said.

Since the restructuring, the Hive Café has seen growth. Its gross margins were 62 per cent for the month of September and sales amounted to $59,000 after the café only projected $29,000, according to Prunty.

Prunty said that there is a two-year plan in place for the solidarity cooperative to ensure stability.

“We just have to keep going in this direction and make sure the organization maintains its focus and doesn’t get excited too quickly, start making changes and spending more money,” he added.

For the current fiscal year, Hoffman said that the Hive Café is expecting another small surplus of a few thousand dollars.