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Business Trends: Creative financing

Slow Money can put seafood enterprises on the fast track

By Joanne Friedrick
January 05, 2012

With the goal of “bringing money back down to earth,” the Slow Money movement started in 2008 as a way to promote investments in local, sustainable food and farming enterprises.

Through a national organization and local chapters, investors are sought to support various projects, all of which are considered small food enterprises. Founder Woody Tasch, who has a background in philanthropic asset management, proposes that by slowing just a little money down, it creates a nurture capital industry that can sustain these small businesses.

Bonnie Rukin, coordinator for Slow Money Maine (SMM), says her group’s mission is focused on investing in Maine farms and fisheries. SMM has a network of 300 people, many of whom meet every other month in Augusta as well as annually in Belfast. The group includes those looking for financial backing for a project, as well as those who may want to finance a venture or support it in other ways, such as through food distribution or retail sales.

At each meeting, as well as at the national gathering for Slow Money, which occurred Oct. 12 to 14 in San Francisco, individuals or groups make presentations about their potential or ongoing project with the hope that they can attract investors or do some beneficial networking.

Nationally, there are 20 state or regional Slow Money groups, all seeking ways to support food and farming-related projects. Overall, Rukin notes, SMM has been growing, with a waiting list of presenters and a sold-out annual conference.

“We bring together the unusual suspects,” says Rukin, to give entrepreneurs as much opportunity as possible. Typically, she says, each presenter has eight minutes to talk about an enterprise, followed by several minutes of question-and-answer time.

While money is key to the success for most of these fledgling businesspeople, Rukin says they aren’t allowed to solicit funds. Rather, they make a presentation on their goals and hope it sparks an interest with someone in the audience.

Will Hopkins, executive director of the nonprofit Cobscook Bay Resource Center (CBRC) in Eastport, Maine, made his presentation to the SMM gathering in July, outlining plans for a shared-use commercial kitchen and marketing co-op where fishermen and farmers would create value-added products and sell scallops and produce.

“SMM isn’t a grant maker or a loan maker,” says Hopkins, “and we can’t ask them for money.” But shortly after Hopkins made his pitch, he received an email from RSF Social Finance, a San Francisco-based foundation, notifying him that an anonymous donor wanted to give the CBRC $15,000. A week after he signed a faxed form, Hopkins had the check in hand.

The money is being used toward the $465,000 total cost of a multi-phase project. So far, the exterior of the kitchen/co-op building has been completed and a contractor is working on the interior plumbing, electrical and heating systems.

By the end of 2012, Hopkins says his group plans to begin buying and selling scallops from Cobscook Bay fishermen. The bay, he notes, “is one of the last good scallop grounds here in Maine.” Maine fishermen have put catch limits on themselves, he says, to ensure the scallop fishery survives. And both Hopkins and the fishermen feel they have a unique product that warrants special attention.

“Until now, these scallops have been sold the same as those harvested by the big boats,” explains Hopkins. “But we feel we have been giving away our value, and we want to sell more directly to the consumer or high-end restaurants.”

Both fishermen and farmers will own the marketing co-op, says Hopkins. Initial plans call for working with six scallopers and six farmers. Although the scallop season is a short one — just December to March — it doesn’t make economic sense to have a facility that can’t be used year-round. So when the co-op isn’t focusing on scallops, the space will be used to process and market local produce, chicken and meat.

Part of the plan is to include a blast freezer and walk-in cooler than can accommodate both shellfish and other products, he says.

While the CBRC organizers did a lot of research and pilot projects before approaching SMM, Hopkins says the experience gained at SMM meetings has been beneficial.

“It’s a great networking opportunity,” he says. “People have introduced us to wholesalers and retailers who are interested in our day-boat scallops.” Additionally, he says, SMM has provided legal, financial and marketing expertise through its speakers and presenters.

Rukin says although fisherman are a small part of the SMM group, they are seeing more interest from that sector. At a breakout session at the annual meeting, she says, there was a table with four or five seafood people. “There is a lot of education and awareness building in that sector here in Maine,” she says, “and we are actively working to grow that.”

“With all the turmoil in the financial world, it makes sense to develop markets and investors closer to home,” says Hopkins.

Contributing Editor Joanne Friedrick lives in Portland, Maine
 
January 2012 - SeaFood Business

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