Nicole Reed, Communications Manager at Down to Earth Markets, shared a report on their Annual Vendor Meeting. SMNYC Board members Jon Zeltsman, President of Down to Earth Markets, and Claude Arpels were on hand to offer history and perspective on the demand for local food as it relates to impact investing.
How Does Your Farm or Food Business Grow? Down to Earth Markets Talks Answers at Annual Vendor Meeting
Down to Earth Markets, a leading manager of local food markets in the New York City area, works to fulfill its vision: “to provide everyone with an alternative to industrial food.” On March 7th, 2016, the company hosted its 12th Annual Vendor Meeting, an event that brought together the local farmers and food makers in their market program. This year, the event also hosted like-minded advocates for alternatives to conventional financing in food.
Jon Zeltsman, President of Down to Earth Markets and Slow Money NYC Board Member, opened things up with a history of the local food landscape. He described the evolution from the 1950s-1990s, when food production and sale became industrialized and concentrated. Then, starting in the 1990s, interest in local food began to emerge. At that time, local food was only available through direct marketing, i.e. farmers markets. By 2010, there was a surge in demand for local food, and selling it became mainstream. The conventional food industry noted this demand. As a result, Zeltsman said, “Today the banner of local is something everyone wants to own.”
Now a parallel evolution regarding our money gathers momentum. People who long for connection and transparency in food also seek connection and transparency in money. With this in mind, Zeltsman introduced the speakers. “The future is ours to create,” he concluded.
The presenters then explored ways to connect local money to strengthen food in our region. Gordon Bennett of Grown in Brooklyn, a.k.a. Barry’s Tempeh, shared his company’s experience with the Kiva Zip loan program. In 2015, through Kiva Zip, Grown in Brooklyn raised $10,000 at 0% interest with 69 lenders. The Kiva Zip platform is based largely on social factors. For example, every borrower must be endorsed by a friend, colleague, or another organization in his/her community. Someone vouches for your values and integrity. Bennett described the process as “painless” in contrast to a typical bank loan. “If you’re looking for a way to Occupy Wall Street, this is the way to go,” he said.
Claude Arpels, a Board Director of Slow Money NYC, shared his perspective as an impact investor. Through Foodshed Investors NY, an angel network of investors, he’s been a part of 14 deals in four years. He said it’s common for entrepreneurs to push to grow sales, but too often the increased sales do not result in a better business. Think about being vertically integrated, he urged. Meaning: Think about how much of the process you can own within your business. “When growing,” Arpels said, “keep your margin strong at every stage.”
Jacob Israelow of Dirt Capital Partners, approaches alternative financing in a different way. He partners with skilled farmers who are managing “cash flow positive businesses” and helps them to buy land. In the past few years, he’s completed seven deals in the Northeast. One recent project was a land purchase for Jersey Farm Produce, owned by Hector Perez, a vendor with Down to Earth Markets. Perez had a healthy farming business in New Jersey when he hit an intractable disagreement with this landlord. In order to maintain his business and years of hard work, he needed a new property. Dirt Capital Partners arranged a lease-to-purchase agreement for Perez to acquire new land. Now, as a result of this alternative financing, Jersey Farm Produce will go on into the foreseeable future.