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Podcasts

Joel Solomon On How Food Businesses Can Be Part Of The Clean Money Revolution

Joel Solomon On How Food Businesses Can Be Part Of The Clean Money Revolution

There is a disconnect between early stage entrepreneurs’ perceptions of available money for their venture and the sheer volume of individuals and funds looking to invest in the space at various stages, if you know where to look. Most entrepreneurs start out with “friends and family” funding (essentially people they know who will take a risk with them), later moving on to “angel” funding, usually by people who have run successful food businesses themselves and understand the space in that specific way. After entrepreneurs have grown their business with that type of funding, typically to at least $1 million in sales, they have then demonstrated enough traction to appeal to venture capital firms. However, natural food investors are starting to look at even earlier stage companies now that there is so much competition at the product, retail and investment levels of the food business ecosystem.

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Peter Robertson of RP’s Pasta On Managing Growth And Changing With The Consumer

Peter Robertson of RP’s Pasta On Managing Growth And Changing With The Consumer

RP’s Pasta is now part of the portfolio of brands of Tribe 9 Foods. One of founder Peter Robertson’s first challenges was category placement as a fresh, refrigerated pasta. RP’s started moving with the consumer to come up with flavors that were non-traditional in Northern Italy, including unique flavors and ingredients. A trip to Expo West in 2010 validated the demand and uniqueness of their gluten-free SKUs, generating demand that spawned rapid growth of RP’s on a more national level. Managing growth and matching it with the right equipment setup/space has also proven a challenge. Peter had mostly funded RP’s with free cash flow and bank financing until accepting the help of an outside investor during their rapid growth phase. In 2017, RP’s merged with Yumbutter and Ona Treats to form Tribe 9 foods, forming a portfolio of brands with a co-packing line of business in a new facility big enough to house the in-house manufacturing for all three companies. Peter expects Tribe 9 to experience tremendous growth over next 5 years, especially in the growth of their private label and contract manufacturing lines of business.

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Ownership Differentiates Willy Street Co-op In A Changing Grocery Market

Ownership Differentiates Willy Street Co-op In A Changing Grocery Market

Willy Street Co-op is a set of cooperatively owned retail grocery stores in Madison, WI. Founded in 1974, they now have 35,000 member-owners and about 400 employees across three stores. This last fiscal year, the co-op generated about $52 million in sales, making them one of the largest grocery co-ops in the country. The grocery market has changed with changing consumer tastes and habits over the past several years, with everything from store size to product mix needing to adapt. Retail grocery co-ops have struggled at times to find their niche in a marketplace where local and organic/natural products are more widely available at traditional grocery stores and online. They have found that operating transparently and openly, emphasizing cooperative ownership and owner literacy, has provided a point of differentiation for Willy Street Co-op in the current marketplace.

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This Food Hub Leverages A Diverse Food Shed For A Resilient Future

This Food Hub Leverages A Diverse Food Shed For A Resilient Future

Dorchester’s Farm Food Hub, a for-profit cooperative located in Prince County, Maryland serving the Chesapeake Bay food shed. The Hub aggregates and tries to ensure consistent supply of seafood and farm products (fruit, produce, livestock) and then redistributes to areas that are historically under-served via direct delivery of fresh and healthy food options. The Hub gives its customers lots of choice and flexibility, allowing people to chose what they purchase based on availability and their preferences. They started with 20 members in 2014 and are now up to nearly 500 consistent members in 2018. The average order size for their products is about $57 and 2 products. The Hub keeps consistent data on their customers’ preferences and has developed new products, like chicken plates and coleslaw, to both eliminate unnecessary waste in their operations and improve their bottom line through producing of value-added products and adding customers to existing delivery routes. The Hub has sought to further leverage their strategic advantages of seafood and aggregation services as their biggest points of differentiation in the marketplace.

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Food Entrepreneurship and Resilience: A Funky Fresh Take With Trueman McGee

Food Entrepreneurship and Resilience: A Funky Fresh Take With Trueman McGee

Funky Fresh Spring Rolls is a company that produces uniquely flavored, hand rolled spring rolls that are baked or grilled (not fried) with fresh and local ingredients. Originally, the founder had wanted Funky Fresh to go directly to grocery store retail in part to avoid the all-consuming nature of owning a restaurant. But, grocery stores have competitive margins and shelf space where it is difficult to get trial, potentially limiting his cash flow at the early stage of the business. The Funky Fresh team began selling at Farmers Markets, which in addition to providing early cash flow have functioned as market research, allowing them to talk directly to consumers about the price point and what flavors are most popular. Funky Fresh has also been selling at sporting events, festivals and through catering, but recently opened up a temporary retail location. The company has plans to distribute frozen versions of their product to grocery stores in 2019/2020 after opening a few more retail locations and a “Funky Fresh Fun Factory” to mass-produce rolls.

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ReGrained, A Business Model For The Long Term And The Planet

ReGrained, A Business Model For The Long Term And The Planet

ReGrained is a national brand of bars and ready-to-eat snacks made from the high-protein and high-fiber flour of “spent” grains used in the beer brewing process. Their core bar product went through many iterations before being ready to scale, and since the bar category is crowded and competitive, it was a learning process to get trial and educate the consumer. ReGrained launched their product at scale in January 2018 and now are working with other businesses to help them produce/co-brand new products using their production facility and the expertise embedded in their proprietary process. They are building out a commercial scale facility that they call a “ReGrainery” in Berkeley, CA currently to process the flour for their bars and demonstrate the re-grained concept to the public. ReGrained was self-funded early on through a small start up investment and cash from product sales, though they have since raised funds via rewards-based crowdfunding, friends and family, angel investment, and equity-based crowdfunding, in addition to a new strategic partnership. The team at ReGrained is excited about their business model being defensibly unique in today’s marketplace and their business model’s long-term impact on the planet.

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Grow Your Food Brand On Amazon, If You Constantly Optimize

Grow Your Food Brand On Amazon, If You Constantly Optimize

The Amazon platform provides a means for small and emerging brands to find an audience and generate sales if they dedicate time and resources to ensure discoverability on the platform by constantly optimizing product pages with the right keywords and features once the user is on the page, in addition to paying for keyword-based advertising. Many food and beverage brands have found that they need to sell variety packs or other bundles to get their products to the $10 – $20 price point that is optimal for both what consumers are looking to pay while balancing achieving profitability on each unit that is not possible with selling individual products for less than $10. While there are some perishable products available through Amazon Fresh or Amazon Prime Now, the brands that have the most traction today in selling through Amazon tend to have shelf-stable products.

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How A Bank Can Strengthen Farming Communities Through Innovative Lending

How A Bank Can Strengthen Farming Communities Through Innovative Lending

Ephrata National Bank in Lancaster County, Pennsylvania is a $1 billion community bank with 25% of their portfolio funding agricultural entrepreneurs. The bank’s staff have found that changing the price the farmers receive via new business models or premium offerings through things like organic production or value-added processing helps farmers deal with high land prices and avoid commodity agriculture’s low return on assets. Lending is a “high-contact sport” and relationships with lenders can help food businesses solve key business problems. Partnerships with government programs from the FSA, SBA and USDA that encourage food and farm lending are essential to make many of these lending relationships work. But, there is a lack of technical assistance nationally to help more lenders understand (and underwrite) cross-disciplinary business models (ex. a farming operation with a cheese plant that resembles food manufacturing). There is also a lack of training on how entrepreneurs and lenders can leverage all of the different sources of capital and programs available to entrepreneurs to make more deals happen.

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How This Hard Cider Business Is Learning From “The Struggle”

How This Hard Cider Business Is Learning From “The Struggle”

Brix Cider is a hard cider company in southern Wisconsin with about 1,000 trees, many of which were hand-grafted from local cultivated and wild apple varieties. After initially home brewing for many years, the hard cider company eventually connected with a local winery that had extra production capacity and began producing in small batches and self-distributing throughout southern Wisconsin. Their ultimate goal is to open a cider tasting room (increasing margins and cash flow); however, there have been many elements preventing them from getting their own facility. Through this struggle to find the right space, they have learned business problem solving skills and financial literacy. The combination of pragmatism and passion they have demonstrated has allowed them to work through and overcome “The Struggle” as they look to growing their business in the future.

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Growing A Successful Retail Food Co-op By Meeting Your Member’s Needs

Growing A Successful Retail Food Co-op By Meeting Your Member’s Needs

The Great Basin Community Food Co-op serves the Reno, Nevada area. The co-op started as a private buying club and was initially located in the back of a punk record store, but continued to grow their sales and members. In 2008, they opened to the public in downtown Reno with 500 feet of retail space, eventually hitting $1 million in sales in one year. In 2012 they moved to another 3-story location of about 3,000 square feet (on the main floor) even closer to downtown. In 2017, the store had about $4.5 million in sales after rapid growth in previous years. The best way for aspiring co-ops to be successful is by reaching out to their community and meeting their members’ needs. In addition, co-ops should focus on their honing their core priorities so that so they don’t get off track, building capacity and buy-in with a core group of people.

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