An NGFN W An NGFN Webina binar BUILD, PREPARE, INVEST: ASSESSING FOOD HUB BUSINESSES FOR INVESTMENT READINESS February 20, 2014
Presentation Outline Technical Orientation Welcome / Introduction Jeff Farbman Wallace Center at Winrock International The Food Hub Business Assessment Toolkit Questions and Answers Upcoming Opportunities, etc.
W ALLACE C ENTER AT W INROCK I NTERNATIONAL • Market based solutions to a 21 st Century food system • Work with multiple sectors – business, philanthropy, government • Healthy, Green, Affordable, Fair Food • Scaling up Good Food
NATIONAL GOOD FOOD NETWORK: VISION
NATIONAL GOOD FOOD NETWORK: GOALS Supply Meets Demand • There is abundant good food (healthy, green, fair and affordable) to meet demands at the regional level. Information Hub • The National Good Food Network (NGFN) is the go to place for regional food systems stories, methods and outcomes. Policy Change • Policy makers are informed by the results and outcomes of the NGFN and have enacted laws or regulation which further the Network goals. http://ngfn.org | contact@ngfn.org
Networking Conferences Webinars Peer to Peer Research Study Hubs Community New Info Regional New of Practice Networks Audiences Technical Assistance Strengthen Food Hubs 6
Presentation Outline Technical Orientation Welcome / Introduction The Food Hub Business Assessment Toolkit Darrow Vanderburgh-Wertz Wholesome Wave Jesse Rye Farm Fresh Rhode Island Questions and Answers Upcoming Opportunities, etc.
Introduction to Wholesome Wave’s Food Hub Business Assessment Toolkit A framework for evaluating business fundamentals National Good Food Network - Webinar February 2014 8
Wholesome Wave works to equip urban and rural communities to make healthier food choices by increasing access to and affordability of fresh regionally-grown fruits and vegetables. Double Value Coupon Fruit & Veggie Prescription Healthy Food Commerce Program (DVCP) (FVRx) Investments Our innovative programs address issues of food insecurity, farm viability, economic vitality and diet-related diseases. Our reach spans the nation with partners in 30 states operating over 300 program sites engaging nearly 2,500 farmers. 9
WW Investments helps food hub ventures get “ investment ready ” and brings deal flow to investors Business development Institutional Marketing & buyer operations relations insight Regional food Mission infrastructure Investors ventures Policy Grower & expertise producer and relations influence Mission driven capital No access to No deal capital! flow! 10
Our team has coordinated over $4 million of investment into food enterprises so far! August 2013 June 2013 Sept. 2013 Sept. 2013 June 2012 (Public, Private) (Public, Private) (Private) (Public, Private) (Public, Philan.) Intermediary Intermediaries Intermediary Intermediary Intermediary Investors Investors Investors Investors Investors OCS ( Grant triggered by HFFI funds) Fresh Source Capital + 1 Private investor *Tranche of a large $9 million redevelopment 11
Farm Fresh Rhode Island ’s programs grow a local food system that values the environment, health, and quality of life of farmers and eaters • Nutrition incentive programs for low-income families • Culinary education • Value-added production • Farmers markets • Nutrition education • Multi-farm CSA program • Farm-to-school • Aggregation and distribution of local farm products 12
WW looks at food hubs in terms of types of activities /operations Each activity has First mile different Aggregation requirements for Retail or Last mile • Risk Management diversified Distribution • Financing markets • Operations • HR/Talent • Technology • Marketing and Sales Processing Processing (Convenience) (Preservation) 13
FFRI sold close to $2 million in local food in 2013 Market Mobile : Aggregation and Distribution Veggie Box : Aggregation and Retail (aggregated CSA) 14
How does Wholesome Wave work with food hubs? Execute Screen Assess Engage Monitor Deal Determine if and how Lay groundwork Get to know the we will work with the Purpose to secure organization organization: TA or investment help another way? Is this a social What is the enterprise that Which investors Key enterprises’ potential fits our basic would be Question for growth, impact on criteria for interested in this s the food system, and investment and opportunity? financial viability? mission impact? 15
Screening food hub: Farm Fresh Rhode Island 16
WW assesses 9 major dimensions of a food hub enterprise 17
A full assessment might look like this 18
How to use this assessment framework • Investors : Structured way of looking at food hubs; Who should use this does not teach you how to be an investor assessment? • Food hubs : Framework to assess your own food hub and prepare for investment • Policymakers : Overview of key components of food hub businesses for areas developing food hubs • Covers assessment in 9 major areas; not legal due What is covered and diligence; does not teach how to structure a loan or equity what’s not? investment • Tool for discussion and decision making, does not spit out an answer • It’s a framework, we expect and encourage adaptation • Express : Gather info from existing sources and quick interview with food hub How to use it? • In-depth : Interviews with food hub, suppliers, customers; site visit; validate info provided • Outsourced : Hire WW or other consultant 19
Since we can’t cover the whole framework on a webinar, today we’ll talk about Business Model and Strategy 20
For each element of the 9 dimensions, we collect data, analyze it, and compare it to benchmarks/examples 21
Business Model and Strategy: Business Justification 22
Business Model and Strategy: Revenue generation mechanism 23
Business Model and Strategy: Value proposition 24
Business Model and Strategy: Competitive advantage 25
Sneak Peek: Market Overview 26
Market Overview: Some example tools/resources Segmenting the Market Product | what you sell Customer | to whom Commodity types Consumer Fresh vs. value-added Chef Local Local Local Regional Local Local Regional National Wholesaler Wholesaler Wholesaler C Wholesaler D! Food Hub! Wholesaler H Wholesaler F! Wholesaler G! Wholesaler I! Distributor A! B! (Organic)! (Organic)! Store manager Service Area! NYC! NYC! NYC! NY! NY! National! National! National! National! 8 Corporate 501C3! Private! 501C3! 501C3! Private! Private! Public! Private! Public! Channel | how reached Geography | where Structure! Size (Lbs Retail – direct Primary markets delivered 5,000! 20,000! 15,000! 50,000! 75,000! 250,000! 750,000! 1,000,000! 3,500,000! daily)! Wholesale – through Entire trading area Pricing! Fixed Price/lb! Fixed Price! Fixed Price! Price/lb! % of sales! % of sales! Price/lb! Price/lb! intermediaries strategy ! Price! # of suppliers 2! 6! 4! 10! 9! 47! 168! 217! 347! (farms)! ! 10 Institutional! ! Direct to consumer! Processing services! Co-Branding ! 27
Thank you! Raphael Leonard Darrow VW Malini Ram Moraghan Analyst Portfolio Manager Managing Director Investments Investments Investments SIGN UP FOR TOOLKIT: wholesomewave.org/hfci CONTACT US: darrow@wholesomewave.org | 203.226.1112 Gus Schumacher Daniel Ross Michel Nischan EVP of Policy and COO CEO and Founder Founder 28
Questions and Answers Darrow Vanderburgh-Wertz Wholesome Wave darrow@wholesomewave.org Jesse Rye Farm Fresh Rhode Island jesse@farmfreshri.org Jeff Farbman Wallace Center at Winrock International contact@ngfn.org
Presentation Outline Technical Orientation Welcome / Introduction The Food Hub Business Assessment Toolkit Questions and Answers Upcoming Opportunities, etc.
Webinars are Archived TOPICS! http://ngfn.org/webinars
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Natonal Food Hub Conference! 2.5 days 6 tours (mostly sold out already!) 8 3-hour trainings More: http://ngfn.org/hubs2014 28 workshops 300+ people for networking Countless learning opportunities…
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Two Notable Resources for Food Hub Info www.FoodHub.info Food Hub “hub” Research, case studies, list and map of hubs across the country, much more. bit.ly/foodhubtalk Google Group / listserv for food hub practitioners and supporters Questions answered! Moderated group – let us know you want to be a part of this in the post- webinar survey and we’ll give you instructions.
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