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How Union Kitchen’s Ecosystem Helps Build Profitable Food Businesses

How Union Kitchen’s Ecosystem Helps Build Profitable Food Businesses

Union Kitchen is a shared-use kitchen and food business accelerator in in Washington D.C. While having a shared-use kitchen eliminates the need for capital for kitchen equipment, there are many other things food businesses need to raise capital for, which why they have distribution and retail outlets as part of their model. Their vertically integrated business and infrastructure – the kitchen, distribution and retail outlets – pairs with its accelerator program, which includes technical assistance, mentorship, classes and other means to help its members be successful. They have worked with over 400 businesses that have hired over 1,000 people and of those 400, 80 have opened their own storefronts. The financial community is more willing to provide capital to their member businesses because their ecosystem has allowed their members to prove that their products have traction in the marketplace and their operations are solid.

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Grants, Loans, Investments…Welcome To The Food Funding Ecosystem!

Grants, Loans, Investments…Welcome To The Food Funding Ecosystem!

While food businesses are developing their big, brilliant idea (and hopefully executing on it), it can be easy to forget that they are one actor in a larger entrepreneurial ecosystem. This ecosystem includes other entrepreneurs, suppliers, farmers, co-packers, funders, accelerators, incubators, consultants, retailers and consumers. To come up with a realistic strategy for action and growth, food entrepreneurs should make efforts to understand this entrepreneurial ecosystem and whether grants, loans, investments or a combination of capital sources makes sense to fund their growth. Only then can food entrepreneurs plant the seeds for a profitable and sustainable food business.

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Value-Added Producer Grants With Jim Gage

Value-Added Producer Grants With Jim Gage

James D. Gage Consulting is a firm that helps value-added farms and other agriculture clients problem solve in critical business areas so that they can be financially viable. Jim’s firm works as a value-added business strategist and creates a client-consultant relationship with entrepreneurs before writing a Value-Added Producer Grant (VAPG) for their business so that he can both write a better grant and provide more meaningful follow-up technical assistance to help them implement the grant. VAPGs include both Planning Grants (maximum: $75,000) and Working Capital Grants (maximum: $250,000). While the VAPG grant can be complicated (for example, a 75 page application plus Business Plan and third-party Feasibility Study), it requires applicants to critically consider expansion of the customer base and the marketplace for products as well as demonstrate how they will have sufficient business structures, profit and cash flow to operate in the long-term. Adding value-added as part of a farm’s business strategy is one of the key financial means to help farms transition to the next generation.

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Reality Keeps Your Food Business Grounded

Reality Keeps Your Food Business Grounded

Being a food entrepreneur is in some ways about balancing empirical reality and a belief in something you cannot see clearly, like where your business will be in 3-5 years. You need to believe, and yet you need to be able to empirically and defensibly say that you have a clear path forward to justify that belief. That’s where clearly stating your assumptions come in. It can be hard to know what is realistic and what isn’t without mentorship and help. We encourage all food entrepreneurs to clearly state their assumptions about the future and test their assumptions constantly, asking the advice of people who they can trust to ground-truth their ideas and actions. Only then can their business be grounded in reality so they can be free to dream big.

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Rightsizing The Ship: A Farmer’s Tale of Scaling Down

Rightsizing The Ship: A Farmer’s Tale of Scaling Down

Rufus Haucke is the owner of Keewaydin Farms, a 200-acre diversified organic vegetable farm that also works aggregating local farmer’s produce in a distribution business. The business’ sales peaked in 2012 at over $800,000 with Rufus coordinating production from over 100 different producers (including his own farm) throughout the season. However, he discovered that the bigger the business got, the more money it lost and that his moving aggregation functions off of his farm caused his operation to be less efficient at that level of sales. Now he had a decision to make: expand rapidly, likely to $2 million – $3 million in sales, or contract. He chose to contract. This has meant he still owes many of those suppliers money, one of the most difficult things about his decision. But, he has remained in open and honest communication with those producers and has focused on rebuilding relationships with them while right sizing the business to achieve profitability.

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When Your Food Business Should Go Online

When Your Food Business Should Go Online

Technological disruption is present in all industries, and the food industry is no exception. The amount of consumers purchasing food online is increasing, with some predicting that 70% of all consumers will purchase at least some of their food online by 2024. Food businesses should know the role that online sales will play in their revenue stream and in their business model. Consumers are starting to become omnichannel in their food shopping expectations, and many food businesses will need to follow suit. Like most things in food entrepreneurship, it is best to let your customers lead the way, and if they expect to find you online, go online and conquer.

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Scaling Innovative Food Products At The Right Time

Scaling Innovative Food Products At The Right Time

Shari Leidich, founder of Know Brainer, started down the path of being a serial entrepreneur when she found out she had Multiple Sclerosis (MS). She turned her love for healthy, sprouted raw whole foods that helped mitigate her MS into products under the brand Two Moms in the Raw (now Soul Sprout). Shortly after she left Two Moms in 2016, she began to experiment with incorporating grass-fed ghee and medium-chain triglycerides (MCT) oil into consumer products like individual creamers. The ideal market for their individual creamer products has been online with Amazon and their own online store while their multi-serve product is more of a conventional grocery item. Shari reflected that she knows more about how to grow the business the 2nd time around. Now that the company is growth mode, they are seeking investment. But, they are ensuring their product has traction and their processes are tight before partnering with investors, and that has meant saying no to some potential opportunities, at least for the time being.

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Why and How To Think About Social Impact Investing In Food

Why and How To Think About Social Impact Investing In Food

From a business perspective, social impact isn’t as important as having a viable business model. Food entrepreneurs, when speaking to investors, should to clearly communicate the business model of their company, which means talking about how their business will make money and on what time horizon. This doesn’t mean that food entrepreneurs should hide their social mission or desired impact from investors or anyone else, but rather that they should contextualize their social goals as part of the larger business strategy. Because food businesses need to be financially sustainable to achieve their goals, including impact goals, understanding their business model and aligning their efforts behind the model is the best way for these businesses to achieve their impact goals. No money, no impact.

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Impact Investing In Regenerative Agriculture

Impact Investing In Regenerative Agriculture

Eric White is a Principal at Cogent Consulting, a firm which helps social entrepreneurs and revenue-generating nonprofits raise social impact investments. Cogent also works with social impact investors to source investment opportunities and helps them build their portfolio strategy, including the incorporation of tools like Program Related Investments (PRIs). Eric feels that cash flowing and making money can coexist with goals of social impact as long as entrepreneurs “translate” their message for different audiences, including using the language of business models and finance when seeking investment. Eric thinks there are investable opportunities in companies that provide support for regenerative agriculture systems. And, he has seen smaller, donation-supported loan funds with loan amounts in the $15,000-$50,000 range – combined with technical assistance – fill a market gap for small entrepreneurs as they scale up and seek larger sources of financing later.

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Farmers: Let’s Build A Brand!

Farmers: Let’s Build A Brand!

Over the last five to ten years, food consumers have been seeking more “premium” experiences from the food they purchase, including better connections with their food and understanding where it comes from. One way this has manifested itself is interest in CSAs and farmers’ markets, allowing people to support local businesses and connect directly with the people growing their food. However, most consumers still get most of their food from the grocery store, and it is difficult to scale farmers’ markets and CSAs to reach as many consumers as grocery stores do. Developing brands for agricultural products can help farmers produce products that earn them a premium and are meeting a real consumer demand. We want to encourage more partnerships between farmers and brand-oriented food entrepreneurs where it makes sense so that all consumers have access to tasty, fresh food.

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