Posts Tagged ‘Fresh Food Financing’

Food Financing 101: Part 3

Thursday, December 15th, 2011

The final installment of our Food Finance mini series

Creating Opportunity Along the Entire Food Chain

By Nessa Richman
Brightseed Strategies Founder and President

The goal of the federal Healthy Food Finance Initiative (HFFI) is to increase the availability of healthy food in low income communities. Most visible to the consumer is the matter of increasing the number of supermarkets, grocery stores, and corner stores in underserved communities, and the healthful food choices they provide therein. The role of Community Development Financial Institutions (CDFI) in this scenario is to support the development of new retail food stores and to expand and improve existing stores in their target communities.

But retail is not just about the storefront, it’s about how products get to market. What if the money spent on food at the retail level also helped develop the local economy?

Retail is just one link in the “food marketing chain.” This chain comprises a possible six segments, each of which houses many types of food enterprises.

  1. Retail/Food Access; e.g., grocery stores, corner stores, farmers’ markets, Internet-based ordering platforms.
  2. Distribution; e.g., Food Hubs: centrally-located facilities designed to aggregate, store, process, distribute, and/or market locally produced food.
  3. Processing; e.g., commercial kitchens, value-added producer cooperatives, fresh-cut produce operations, meat processing facilities.
  4. Agricultural Production; e.g., farms and ranches.
  5. Technology and Infrastructure; e.g., fertilizer/pest management companies, farm equipment companies, seed and feed businesses.
  6. Waste Management; composting facilities and recycling operations.

Brightseed Strategies is working with the CDFI Fund, the co-writers of this Food Finance mini series, Opportunity Finance Network (OFN) and The Reinvestment Fund (TRF), and other strategic partners, to help CDFIs understand why it is important to think about the whole food system when developing a national financing initiative. Educating CDFIs about the full spectrum of healthy food enterprises within healthy food systems increases their lending opportunities, and maximizes the positive impacts of these businesses on their communities.

Healthy food systems are critically important to increasing healthy food access and affordability. This is true in communities of all income levels. Vibrant food production, processing, and distribution enterprises support healthy retail options and a healthy local economy. If these enterprises are locally owned, they provide more benefit to the community in at least three measurable ways:

  1. Better jobs. Local ownership of small businesses matters for economic growth. On the community level, more locally owned small (10-99 employees) businesses mean higher individual per capita income growth. Conversely, a high density of large (more than 500 employees) firms that are not owned locally leads to lower individual per capita income growth. This is true for both rural and urban areas.
  2. Bigger economic return. Local businesses are better for the local economy. When compared to leading chain competitors, local stores generate twice the annual sales, recirculate revenue within the local economy at twice the rate, and, on a per square foot basis, have four times the economic impact.
  3. More community pride. Markets exist within social and cultural contexts, and these contexts affect how resources are allocated. A greater density of locally owned businesses increases the likelihood of community members voting and participating in community civic, political, religious organizations, and even sports clubs, a noteworthy point for those interested in improved health outcomes

HFFI will increase food access in targeted communities, and do much more. If the national initiative’s vision includes goals to encourage or develop economically vibrant, socially equitable, and environmentally sustainable food systems, investments made by CDFIs will benefit agricultural producers, healthy food enterprises of all sorts, and consumers of all socioeconomic levels.

In order to do this, a CDFI can develop a go-to-market strategy in collaboration with potential borrowers, intermediaries, investors, and partners. This may be the best way to develop a customized plan responsive to community needs. In the government and non-profit sectors, we may phrase this work differently: the national HFFI is really an opportunity to develop a HFSFI, a healthy food system financing initiative. And some regions, cities, and communities are creating innovative programs – from TRF’s growing interest in investing in the local food system to Boston-based The Carrot Project, with its focus on supporting small and midsized farms and farm-related businesses.

images courtesy Brightseed Strategies

For the complete series, please visit these links:

Food Financing 101: Introduction
Food Financing 101: Part 1
Food Financing 101: Part 2

Special thanks to Alison Hastings of the Delaware Valley Regional Planning Commission (DVRPC), who coordinated the Food Finance series, and to Patricia Smith of The Reinvestment Fund, Pam Porter of the Opportunity Finance Network, and Nessa Richman of Brightseed Strategies for contributing.

DVRPC and their partners are regular contributors to the Dodge blog on issues of food policy and regional food systems.

Food Financing 101: Part 2

Tuesday, December 13th, 2011

Continuing our Food Finance mini series from last week:

Making it Happen Across the Country

By Pam Porter
Executive Vice President, Strategic Consulting
Opportunity Finance Network

We all agree that too many communities across the country have very limited access to healthy foods. Sometimes called “food deserts” or “limited supermarket access areas,” the dearth of healthy foods undermines the health of residents, and drags on a community’s economic prospects.

Opportunity Finance Network, headquartered in Philadelphia, PA, is leading a national effort to work with community lenders across the country to help them successfully finance healthy food options in underserved communities.

Financing for healthy food businesses is a critical factor for successfully increasing access to healthy food. It gets great ideas off the ground, and keeps them running and growing:

  • by financing supermarkets, corner stores, and food cooperatives, we increase the availability of healthy food options in neighborhoods, employ local residents, and serve as a catalyst for other types of business in the immediate community.
  • by financing the supply chain businesses that aggregate food, process it and distribute it, we provide economic opportunities for the growers and processors of food, and increase the availability of locally grown food to our communities.
  • by financing food producers, such as farmers, ranchers and fisheries, we ensure that the supply of locally grown food continues to increase, producers can invest in new equipment, and farmers can transition their crops to meet new market demand.

Recognizing the importance of financing, especially in low-income and low-wealth communities where access to traditional sources of capital is often limited, the US Department of Treasury’s Community Development Financial Institutions Fund (CDFI Fund) launched a two-year Capacity Building Initiative to train community-based lenders, or CDFIs, to learn the unique characteristics of Healthy Food Financing. The CDFI Fund contracted with OFN to design and implement this program, based upon its 25-year track record of working with CDFIs across the country.

To design and implement this program, OFN pulled together a roster of experts including the co-writers of this mini series: The Reinvestment Fund and Brightseed Strategies. Other experts include: The Food Trust, Coastal Enterprises, Inc., The Carrot Project, and Mission+Money Matters.

OFN developed and has delivered workshops to help CDFIs learn best practices to support healthy food businesses across the entire healthy food continuum. The first workshop was held in June 2011 in Philadelphia and hosted by the Delaware Valley Regional Planning Commission. Twenty-five participants from around the country came together for in-depth training, practitioner panels and networking with others interested in this sector. Subsequent workshops have been held in Madison, Wisconsin and Denver, Colorado.

Just last week, the Capacity Building team released a Resource Bank on Financing Healty Food Options. This online resource makes the training and resource materials used at the workshops available to the general public and members of the community development industry.

In 2012, OFN has already scheduled workshops in New Orleans, Los Angeles, and Durham. In addition to workshop training, we also ensure that CDFIs have access to one-on-one technical assistance from our roster of experts to help them implement the programs they have learned about in the workshops.

In case you missed them:

Food Financing 101: Introduction
Food Financing 101: Part 1 (Pennsylvania’s Initiative Becomes the Model for the Nation)

image courtesy Opportunity Finance Network

Food Financing 101: Part 1

Thursday, December 8th, 2011

Pennsylvania’s Initiative Becomes the Model for the Nation

By Patricia Smith
Senior Policy Advisor
The Reinvestment Fund

The Reinvestment Fund (TRF), a Community Development Financial Institution (CDFI), creates opportunity in low-wealth communities through socially and environmentally responsible development. In 2004, TRF partnered with the Commonwealth of Pennsylvania, The Food Trust, and the Urban Affairs Coalition to create the Pennsylvania Fresh Food Financing Initiative (PFFI).

Leveraging an initial State allocation of $30 million, TRF made $85 million in grants and loans to support grocery stores in communities where infrastructure and credit needs are unmet by conventional financial institutions. By the time the State program closed in June 2010, Pennsylvania’s Fresh Food Financing Initiative had assisted 83 supermarkets and fresh food outlets in underserved rural and urban areas throughout the state, creating or retaining 5,000 jobs.

Kennies Marketplace, Gettysburg, PA

In 2009, TRF partnered with The Food Trust again, and PolicyLink, a national research and policy action institute, to raise awareness on the issue of limited food access in communities across America and the need for a national program to finance the development of supermarkets, grocery stores and other fresh food retail. Together, the organizations developed and disseminated research on areas with inadequate access to healthy food, built a broad coalition of national support and created the policy framework for the national Healthy Food Financing Initiative (HFFI), modeled after Pennsylvania’s FFFI.

The current national campaign has generated extensive media coverage and widespread support for HFFI. More than 90 organizations representing a diverse set of stakeholders (the grocery industry, labor unions, public health and food security advocates, state and local governments, civil rights groups and community development organizations) have voiced their support for a national solution to increase access to healthy food in low-income communities. HFFI is also one of the four pillars of Let’s Move!, First Lady Michelle Obama’s campaign to reduce childhood obesity.

This advocacy, together with Pennsylvania’s success story, helped fuel President Obama’s launch of an interagency Healthy Food Financing Working Group in February 2010. Instead of attacking inequitable access through separate agency and program silos, the federal departments of Health and Human Services, Treasury, and Agriculture coordinate their review and award processes, as well as mechanisms to track annual investment performance. To date, these agencies have awarded nearly $45 million to support a wide range of interventions that will expand the availability of nutritious foods, including increasing the distribution of agricultural products, developing and equipping grocery stores and strengthening the producer-to-consumer relationship.

Just last week, a bipartisan coalition in the House and Senate introduced legislation that will expand the HFFI to increase access to healthy foods in underserved communities. This comprehensive HFFI legislation responds to issues of limited food access and will invest $125 million to target the number of low-income Americans living without adequate access to healthy food. The legislation calls for critical seed capital to establish new and expand existing healthy food financing partnerships in communities across the United States.

TRF continues to improve access to healthy food in the mid-Atlantic region by providing loans to finance a variety of healthy food retail formats. In addition to financing efforts, TRF has completed a nationwide analysis on low access food areas (available on PolicyMap.com) and researched the benefits of supermarkets on economically distressed neighborhoods. TRF is also developing strategies to broaden a successful food retailing investment program into a diversified sustainable agriculture and local food system funding initiative. As part of this effort, TRF is scanning the landscape of food production, processing and distribution in southeastern Pennsylvania and southern and central New Jersey.

The need for a comprehensive federal policy is critical, particularly in low-income communities and communities of color. With constricting credit markets, grocery store operators face higher obstacles to developing stores and other food-related businesses in underserved communities. Obesity and health-related problems are expected to worsen during these hard economic times. Leveraging combined public dollars and coordinating national policy through HFFI could create new opportunities for improving health and well-being and creating wealth in America’s communities.

In case you missed it, here is the introduction to our Food Financing 101 Series.

Stay tuned next week for Part 2: Making It Happen Across the Country

Image: courtesy The Reinvestment Fund

Crafting a New Food & People Economy

Wednesday, June 23rd, 2010

Michelle Knapik, Environment Program Director

DSC_0091

Last week I was part of the Sustainable Agriculture and Food System Funders Conference (note, I didn’t say I that I attended – there is an urgency to this issue that calls for much more than attendance).  What struck me most was the convergence of thought leaders, practitioners and organizers from traditionally separate sectors. These presenters were not simply at the same conference, they were co-leading sessions, learning from each other, and identifying the knowledge gaps. Funders were invited to taste a fusion of community food, finance and design (as in planners, builders, and engineers), and to cultivate the models and policies to support this mashing of flavors at a larger scale. There was also a sense about this being the moment in time for the philanthropic sector to step-up and build local and regional food economies and communities (remember, we just fused these). The question is whether the sector will choose to do so (here’s a great article on how local and national philanthropy is gearing up to “effect big change” in this arena).

DSC_0019

The conference learning went from head to field to stomach. While in the field, we met neighborhood food producers, local food pioneers, sustainable ag farmers, community development leaders, emergency food providers, policy leaders, and healthy food entrepreneurs.  We also saw that food production is happening on private walls and roofs, institutional lands, faith based lands, municipal lands, and if land is not granted, then by way of guerrilla gardening. Food is being sold, shared and gleaned, and there are linkages to food cupboards, neighbors and markets (sometimes a hybrid of all three).

2010-forum_SAFSF_front-thumb

Since the title of the conference was “Shaking it Up, Making it Last,” I’m about to honor the shaking it up portion by combining notes from the tour I led with my colleague Andy Johnson from the William Penn Foundation with reflections from the conference sessions. But let me start with what was for me the most critical take-away. It came from Jeremy Nowak, President and CEO of The Reinvestment Fund . He said that in this space of regional foods, we must start somewhere, we cannot wait for the perfect comprehensive plan. He underscored that development is iterative; that we need to pursue ideas and thinking and learn from them as they get embedded in practice. This is, in Jeremy’s words, about “craft” – and we must use craft and practice to go to scale, all the while creating a living narrative around the work. This, he says, is where hope lives.

DSC_0078

Hope was certainly thriving in Camden, NJ on the day of our tour which was entitled, “A Union of Urban Food, Faith & Empowerment.”

DSC_0038

Josh Chisholm of Camden Churches Organized for People (CCOP) told the story of how this was once a trash strewn lot where abandoned police trailers stood covered with graffiti and where a drug economy thrived. With the help of the Camden City Garden Club , which is the primary life support system for community gardens and farms in Camden, this ¾ acre lot now has 35 family plots and star quality community leaders. The Checos, whose son was sparked by CCGC’s “Grow Lab” program at neighboring St. Anthony’s school, and who in turn sparked the lot transformation, now organize potluck dinners wherein gardeners exchange techniques and best practices.  Mr. Checo also serves on the City’s new food security advisory council.

DSC_0022 DSC_0030 DSC_0067

DSC_0072 DSC_0075DSC_0085

Speakers throughout the conference talked about the benefits of transforming vacant lots to productive lands. Here are a few benefits to consider: lower public land maintenance costs, reduced household food expenditures (this can be in excess of $1,000 year), increased property values, added jobs, increased opportunities for skills training, improved health, and improved environmental stewardship, biodiversity, and access to and use of open space. As food system analyst, Ken Meter noted, our current food and economic systems fail us on all of the following fronts – health, wealth, connection and capacity; but local food economies embrace and integrate all four. Mr. Meter, who is the President of the Crossroads Resource Center in Minneapolis sees local foods as a prime economic recovery strategy. If the $1 trillion dollar food economy were shifted to a regional food system, he asserts that true recovery could happen because the economic changes would build wealth in low income settings. How might this get kick started? Well, he noted that local and state governments spend $ 550 billion on economic development strategies that are not delivering on their promises. What if some of these funds were repurposed to support regional food system development?

At the local level, there is a community development corporation (CDC) in Camden that is combining community revitalization with community gardening. The response to Cramer Hill CDC‘s support for community gardens is off the chart. When Andy and I sketched out the tour route a few weeks ago, the “lot” below was an overgrown triangle of neglect, but now it joins the ranks of some 80 community gardens in Camden that are connected to CCGC.

DSC_0098

Our tour trolley then headed to south Camden, probably the hardest hit area of all the Camden neighborhoods, yet one in which community gardening has helped keep some blocks together for many years.

DSC_0120

Pedro Rodriguez - Neighborhood Food Producer and Educator

DSC_0147

DSC_0142

Again, when Andy I did our pre-tour run, the lot in this south Camden block was devoid of any real life, now hope sprouts throughout the lot and those working on it.

DSC_0151

DSC_0149

There are innovative policies popping up all over the country to help accelerate the conversion of vacant and underutilized city lots. Many “fixes” focus on longer land tenure, including the concept of urban garden zones. There are also new city farm animal and bee ordinances, and there is an urban agriculture overlay district in Cleveland. Vancouver also has new urban ag design standard. I even heard a conference participant suggest “ 1% for urban ag” ( a new take on 1% for art). I learned about a number of these approaches last November at a Funders Network Conference in Cleveland, but the rate of change from then to now is staggering (see my blog post from last November).

DSC_0136 DSC_0130 DSC_0162

The policy push feels necessary to effect change. Jason McLennan of the Living Building Challenge (who is also the CEO of Cascadia Region Green Building Council ) reminded us that rapid change is not only possible, but that many social revolutions occurred in short bursts. He noted that we went from cities built for walking and riding horses to auto cities in a span of 20-30 years – and that happened without a sense of urgency for change. Remember, too, that during WWII, Victory Gardens quickly ramped up, yielding 40% of all produce in the country. So with the ingredients we have for a food system revolution, imagine what our cities might look like in 2030 in terms of food production, transportation, architecture, and culture.

And I didn’t mean to gloss over the significance of having a green building expert at this conference. The Living Building Challenge is about regenerative design wherein our built infrastructure can help heal our degraded landscapes. McLennan said that we must have a blending of food & architecture – of community design – and that this is more about a re-imagining of our food system. He noted that food used to be an integrated part of community design – think pre WWII visions, or when Frank Lloyd Wright designed the broad acre city.

DSC_0159

Do we have all the answers on regional/local food systems? No. There are lots of knowledge gaps regarding sustainable ag and urban ag. And we definitely need a deep learning session with Ann Carroll of the EPA Brownfields program. There is no doubt that we need to know HOW to operate in urban environments. Ann waves the banner of “methyl ethyl death,” but lucky for us, she is also a local food champion and advocate of the highest caliber – she just wants to make sure it happens in a way that protects our health and well being.  Working on or near contaminated lands is no walk in the park.

One of the last stops on our tour took us to the beginning of an urban farm in south Camden – just down the block from the two “lot” sized gardens.

DSC_0168

There’s been more research on the impact of food production in Philly, so I’ll pass on these stats from Domenic Vitiello, founding president of the Philadelphia Orchard Project and a professor of city planning at the University of Pennsylvania who has done research to quantify local community garden food production (he also teaches a course on community development and food system planning). Philadelphia’s 200 food related community gardens, tended to by more than 500 people, produces more than $5 million in summer veggies. This without formal supports!  Imagine if there were maintenance and endowment programs, supportive experiential education to build consumer demand, and entrepreneurial and job skill training opportunities.

Going back to Ken Meter’s discussion – the Camden Farm could be part of Camden’s economic recovery, and it could operate as a hybrid model (part neighborhood food production and part farmers market, with perhaps a few spin-off food enterprises).  As professor Vitiello noted, this is about planting seeds and growing lives.

DSC_0174

It also is about growing networks.  Ken Meter talked about the shift from working old supply chains to “building value networks” – clusters of small businesses that trade with each other. This would include a farmer, a local food processing operation, the distributor, a compost operation, etc.  Each serving as a multiplier in a local or regional economy. At the local level this might look like the Growers Alliance in Philly, which is about creating a green resource center to coordinate bulk purchases of seedlings, hay, and mulch for its member, as well as providing education and training. There are 17 growers in the alliance today; the forecast is for 300 in the next 3 years. At a higher level, the Business Alliance for Local Living Economies provides support for sustainable business networks across the country and the globe.

TRF logo

So where does the patient capital to fuel this shift come from? Let’s go back to Jeremy Nowak and the work of The Reinvestment Fund. Jeremy jumped into the food arena through housing and community development and attempts to address the issue of urban food deserts. TRF’s Fresh Food Financing Initiative has now reached national acclaim, including White House interest. Jeremy notes that data collection and relationship building is how TRF built “Wholefoods in the hood.” Now he sees the power and potential of the local and regional food movement and is considering models like mushroom farms and other food production enterprises as a complement to the supermarket financing initiative. He will collect data and build relationships with growers and then develop the finance models. He thinks funders can identify the “burning bushes” of activity in their regions by creating an activity map. From there, funders can identify where success might happen, as well as the range of risks and the different kinds of funding mechanisms that are needed (blended grants, loans, etc.). This calls for more foundations to jump into the impact investment arena – or to work with intermediaries like RSF Social Finance , whose team is creating a series of small food related Program Related Investment (PRI) funds (they do the underwriting, due diligence etc.) The Community Food Enterprise Report is a good starting point for this work. Sandy Wiggins, chair of E3 Bank , put it this way, “We need to change our mindset from one of exclusively “managing risk” to one of “creating prosperity.”

DSC_0185

Mike Devlin of CCGC talks with NJ Ag Secretary Doug Fisher

Under a tent at CCGC, the final stop on our tour, we were joined by Mark Smith, Chef / Owner of Tortilla Press who is dedicated to sourcing local foods. I’d say more, but my mouth still waters when I think about the veggie quesadillas he served us. We were also joined by Tracy Duffield of Duffield’s Farm. Duffields represents the ever important rural to urban connection in our regional food system, evidenced by the blueberry crumb cake that was quickly consumed by our tour participants. But I have to say that even though he didn’t serve up any food, NJ Secretary of Agriculture Doug Fisher stole the show when he announced that he is talking to USDA’s NJ Rural Development Office about “a 21st century version of the produce vendors and fish peddlers who used to traverse the streets of our cities.” He wants to pilot a “fresh mobile” unit (a cross between a book mobile and ice cream vendor truck) that would have “cold storage amenities that offer locally grown produce and other in season ag products.” In addition to raw and prepared foods, there would be value added products – and all Fresh Mobile units would be equipped with EBT machines and non cash ways of handling SNAP, WIC, Senior Farmer Market coupons, and related payments. Secretary Fisher’s background in retail and wholesale food distribution provides him with the working knowledge that just because food is grown and harvested in NJ, it does not necessarily reach the plate of every resident, especially in our urban centers. He is also very sensitive to the availability of cheap, unhealthy foods that are prevalent in food outlets in our cities.

Food Shed matrix (Cornell University)

Secretary Fisher’s comments regarding unhealthy diets served as a nice segue to one of the final plenary sessions, “Refocusing the National Food System.” A collaborative effort among Columbia University , MIT, and the United Health Foundation offered a perspective on the link between the food system and health. Did you know that we will spend $344 billion by 2018 to manage the health consequences of obesity? Dr. Reed Tuckson, Executive Vice President and Chief of Medical Affairs at UnitedHealth Group, thinks that the ubiquitous $1 cheeseburger and our current food system has everything to do with this issue. This study group is calling for a decentralized local healthy food hub system – they want the nation to recalibrate and think in terms of Food Sheds. How does this shift happen? A huge part of it is about food literacy – something Secretary Fisher keyed in on as well. Dr. Tuckson proclaimed that we all need to become good food citizens in order to change a system that produces more than enough food calories, yet leaves 1 billion people hungry. I suppose we could wait until oil prices reach a catastrophic tipping point (futurist John Michael Greer was on hand to talk about his vision of a post oil peak “Ecotechnic Future”), but I have a little more faith in the power of people to organize for this food revolution.

Are you a good food citizen? What are your ideas about improving food literacy, cultivating the concept of food sheds and promoting civic engagement around regional food systems?

During the conference, I met some amazing writer, blogger, foodie colleagues from Seeding Chicago. They blogged about several tours and conference sessions. The “must reads” from their site include a general post on the conference, a tour stop at Cathedral Kitchen , more on Jeremy Nowak , and a tour stop at Greens Grow.