Our mission at the Food Finance Institute is to make sophisticated financial technical assistance available to every growing food, beverage and value-added agriculture enterprise. Like 2017, 2018 was a busy year in achieving that mission, and here is what we are proud to have accomplished this year:
Our network of trained consultants keeps getting bigger
In 2018, 51 consultants and financial professionals attended either our Level 1 Training (Business Model Optimization) or our Level 2 Training (Financial Packaging) or both (43 individuals), with an additional 65 people attending at least one custom consultant training with FFI during 2018. These 116 individuals bring our cumulative trained consultant count to 197 individuals since we began training people in late 2005.
The year of financial management Boot Camps
In 2018, 81 food and farm entrepreneurs attended at least one session of our Financial Management Boot Camp, which combines training, one-on-one consulting, and networking, taking entrepreneurs out of their day-to-day environment and giving them the tools they need to build a more resilient food business.
Attendees worked on their business model path, improved their financial systems and started creating their financial package so that they are more ready to approach potential lenders and investors.
Ongoing partnerships to reach more food and farm entrepreneurs
US Department of Agriculture
We would like to thank the USDA for helping to make our trainings and boot camps available to many of the individuals mentioned above via an LFPP grant. Their support is having a huge effect on the viability of many farm businesses. You can view our other partners on our site.
Food and Beverage Wisconsin
FFI is also a proud collaborator with Food and Beverage Wisconsin, supporting their FaBCap Accelerator and participant companies with financial coaching, mentorship and technical assistance including the 10 companies in the 2018-2019 cohort.
Producing and curating quality financial resources
The Edible-Alpha® Podcast
The Edible-Alpha® podcast captures great conversations with consultants, entrepreneurs, bankers and investors about building and funding profitable food and beverage businesses, releases twice-monthly on Apple podcasts or wherever you get your podcasts. In 2018, we surpassed 20,000 cumulative downloads! You can subscribe or listen to some of our favorite episodes from 2018 below.
How Tribe 9 Foods Balances Economies of Scale with a Changing Marketplace
Tribe 9 Foods is the result of merging Yumbutter, RP’s Pasta and Ona Treats. The new company also secured growth capital to bring manufacturing in-house for all three brands, something that has allowed them to have control over batch timing, batch size and product quality. In addition, in-house production allows them the flexibility to try new things and have a co-packing line of business for their core product types (nut butters, pasta, bars). Yumbutter’s team brings experience in branding/marketing and RP’s team brings experience in innovative food manufacturing and food safety protocols, allowing them to combine flexibility with economies of scale while serving multiple types of customers with their co-packing service. Tribe 9 is always looking to be flexible and nimble, diversifying as the market changes and as everyone tries to figure out a more sustainable way to produce and distribute high quality food.
MobCraft Beer’s Creative Sourcing of Recipes and Financing
MobCraft beer is a brewery and taproom with a unique business model of crowdsourcing ideas for beer recipes from their customers. Their brewery/taproom in Milwaukee cost just over $2 million to build. When MobCraft first started to raise money to finance their facility, they looked for institutional capital at first without much success and then pursued equity crowdfunding. Knowing how much equity they needed vs. debt to finance their facility build out and equipment needs helped them pitch specific asks to both banks and investors. They took advantage of the SBA 7a program to raise the debt they needed, talking to multiple banks before securing bank financing. They also worked with the landlord of their facility to help finance the improvements to the space, which worked as equity when approaching the bank. They then strategically sold their distribution rights to help raise cash.
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.
The Edible-Alpha® Insights Newsletter
The Edible-Alpha® Insights Newsletter curates food business insights, rounding up the best food and beverage finance news, events and resources from Edible-Alpha® and across the web, released twice-monthly right to your inbox.
Why Private Label Might Be A Great Business Decision
The average full grocery store has nearly 40,000 SKUs i.e. products that it offers to consumers. Consumers have more choices than ever about what food they buy and where they buy it. But, it is becoming more difficult and expensive for new food brands to build meaningful relationships with them as the marketplace becomes more saturated. To capture more customer value, grocery stores have introduced their own branded products alongside others that they bring in on their shelves, often referred to as “private label” products. While private label products’ market share has held steady at about 18% in recent years, private label brands are now growing faster than traditional manufactured food brands. If food companies have manufacturing capabilities, making private label products can be a valuable part of their business model as they build their customer relationships, maximize production efficiency and diversify revenue streams.
Should I Manufacture Food In-House Or Use A Co-Packer?
It can be a big leap to think about producing larger quantities of food when entrepreneurs are used to home production or commercial kitchens, where the batch size and financial outlay are relatively small, and operational processes are simple. However, if food businesses are considering going into wide-scale distribution in grocery stores and they want to be profitable (hopefully, they do!), they will need the capacity to produce their food at scale. The inevitable question these entrepreneurs face then is “should I manufacture food in-house or use a co-packer?” This question can be difficult to navigate for new food producers, especially because there is not a hard and fast answer. The food entrepreneur’s business model, stage of business, financing capacity (i.e. how well they can raise money) and the availability of co-packing capacity for their specific needs all make a difference in deciding how to answer that question.
Food Businesses Need To Pay For Space And Attention, Even on Amazon
“This product sells itself!” Have you ever heard that expression? It’s one of those clichés that is unfortunately not true. While there are things you can do to gain awareness, interest and trust in the marketplace, no product, food or otherwise, sells itself. People’s time and attention are limited, and often the biggest challenge with acquiring new customers for food businesses is getting those customers to try the product. Because the food space is competitive, online and off, emerging food companies have to spend lots of marketing and sales dollars to get people’s attention by paying to have their product in the right place with the right positioning.
Speaking & Thought Leadership
We believe that thought leadership is a powerful way to positively impact the success of food and agriculture innovators around the country. Here are a few examples of our work this year.
Nutrition Capital Network
FFI director Tera Johnson currently serves on the Nutrition Capital Network Selection Committee that helps to qualify dealflow and mentor presenting companies in the natural products industry. Learn more about the Nutrition Capital Network.
New Hope Media’s Brand Camp
Tera talked about the strategies necessary to finance growing food businesses in the “Must-have resources for scaling your omnichannel strategy” webinar with New Hope Media’s Brand Camp.
Wallace Center Fellowship
Tera is part of the first cohort of the Wallace Center’s Regional Food Economies Fellowship Program to help provide models for successful engagement between regional food systems and community and economic development stakeholders.
Tera Johnson and FFI Profiled in the Capital Times
Tera asks aspiring food entrepreneurs “How are you going to be defensively unique? How are you going to get a consumer to try your stuff?” People underestimate how much money they need and how big they need to be to break even.
Agricultural Utilization Research Institute (AURI)
In an interview with AURI, Tera emphasizes that target marketing is a huge piece of the consumer packaged goods (CPG) process that can be partially difficult for those in the value-added food industry and rural entrepreneurs looking to scale.
Tera tells the TerasWhey story on Milwaukee Public Radio
On the “How Did You Do That?” podcast, Tera talks about how it’s easy to start a company and it’s hard to scale one without a compelling business model that’s rigorously documented financially and legally, the right team and the right financing.