Sunday, August 30, 2009

Community supported development and the Good Food Network

Mark and I got to talk with a wonderful group at a meeting last week in Chicago. It was a gathering of the Good Food Network of the Upper Midwest.

I got to reconnect with friends and meet people I'd only known through email. There was a wide-ranging discussion about our local food processing proposals. People in the room included universities, foundations, research institutions, food sales and distribution firms, and funding collaboratives representing local governments and large public institutional food buyers.

It was flat-out invigorating to participate. The very best parts of the discussion were the ones that pushed us hardest to justify the concept and details of our local foods processing project.

The give and take was really great. Mark and I got to disagree with each other on new stuff right in front of them. It was like doing the most fun parts of a startup in front of a live audience. I love my job.

These good folks are in a national conversation sponsored by the National Good Food Network (NGFN). This arises from the Wallace Center and Winrock International, which are all linked below.

Here is a short introduction to the NGFN: "The National Good Food Network is bringing together people from all parts of the rapidly emerging good food system – producers, buyers, distributors, advocates, investors and funders – to create a community dedicated to scaling up good food sourcing and access."

"The challenge presented by the food system is our opportunity—to revolutionize business models, develop new market relationships, and add value to traditional supply chain infrastructure, so that the growing business of good food is sown in the values of good food – all the way from farm to fork."

This was very interesting to me to be included in this larger national conversation about revolutionizing business models to meet clear market challenges. These are significant players, all well connected into the agriculture and food industries, and they are nurturing and inspiring change, not running from it. My kind of meeting. My kind of people.

As we roll out the Dirftless Foods / Iowa County Initiative, we're down to a few key details as I see it. We have a choice of doing this with largely private money or focusing on government grants. A hybrid model is likely and the implications of that decision will keenly influence the legal structure the project adopts.

Seeing how the Good Food Network is reaching across many traditionally closed boundaries to create new conversations about change and effectiveness, I feel much more confident about helping build a hybrid business model for our local foods processing facilities. They are after results not more discussion. That's what I want for this project: long-lasting, high quality results that benefit all stakeholders.

Our ideas for community sponsored development fit well into this model of a hybrid organization. We are designing a model to attract the investment from local investors and local groups, regional governments, as well as regional and national enterprises both public and private.

As the GFN says of themselves, "The National Good Food Network represents practitioners across the value chain building a new food system that rewards sustainable production, treats growers and workers fairly, improves the health of families and the wealth of communities, and meets the growing demand for healthy, green, fair, affordable food."

Sign me up. Let's get this done.

Many thanks to the Good Food Network of the Upper Midwest for a really illuminating introduction to their work and, best of all, a new way of looking at mine.

National Good Food Network

The Wallace Center

Short biography of Henry Wallace

Saturday, August 22, 2009

Community Supported Development

My mission is to create as many small, sustainable enterprises as possible. Working with Mark on the Driftless Foods / Iowa County initiative I've come to believe that the best way to create large numbers of new enterprises is by building new local economic infrastructure designed to support them.

Mark and I have been talking about community supported development (CSDs) as a new piece of economic infrastructure whose time has come. It is a model we'll pursue for growing Driftless Foods.

Much as community supported agriculture (CSAs) seeks to create long-term vibrant farms in local communities, CSDs would seek to build long-term vibrant enterprises of all kinds into local communities.

The CSA metaphor is intended. In a bad year you'll get a smaller basket of produce. In a good year you're awash in zucchini. What if the returns were dividends not veggies?

Community supported development can be a tool for creating, funding, and growing long-term local economic infrastructure in communities and regions. With a little planning, this infrastructure can be designed to strengthen market-based local entrepreneurship for generations.

The infrastructure supplied by community-supported development can be digital, and/or brick and mortar capacity, and certainly many other manifestations. In our case we are trying to create a platform for moving large quantities of regional foods into a processing and distribution system geared toward mid-tier farms. This will require the creation of a legal entity capable of organizing that kind of effort; the building of a physical structure robust enough to do this efficiently; and the wiring up of social networks that will enable this project to move forward. Some of this is old-fashioned shoe leather, but much of it will involve investing in the tools to needed to launch and grow this community effort.

In our case we are trying to create a community based economic development platform that will not only benefit local enterprise but critically, community investors as well.

Community supported development would employ judicious early use of funds available from public sources such as grants and loans from economic development sources in government and

People from the community and the region should also be able to invest and benefit from this development as well. This is the heart of community supported development. Not only would local entrepreneurship benefit, but community investors would also benefit.

Community also implies those of like mind. If a place for an investment from the wider community is available that should be available to supporters wherever they are.

Sound legal structures can be put in place to allow individuals and local entities to invest in this way.

There is, thankfully, no 'one' right way. Many traditional investing formats will work. There are also new legal forms of organization emerging all over the country, state by state, that are allowing many creative new ways to create and build sustainable entrepreneurship.

So, how do you organize that? Clearly you hard wire self-interest into the equation. You just can't talk about win-win. The system needs to DO win-win. Sustainable = repeatable. Over and over. Mutual self-interest is a repeatable platform.

Our job as economic developers is to build win-win into the equation from the beginning with the entire community in mind.

The local benefits derived from community sponsored development will be greater economic diversification and security. More capital will circulate locally. People and local organizations of all kinds will also reap the benefits of living in an economy that grows entrepreneurs.

The regional benefits of this kind of economic development will grow immediately. As more and more of these new startup enterprises are created and nurtured they will begin to interact in mutually self-interested ways. This will benefit the entrepreneur organizations and create region-level community supported development platforms.

I know that multi-state benefits will accrue as this model builds out. The wider an area that can be knit together by self-interest, the more chances there are for finding and growing profitable partnerships for all involved. Our previous startup used this very model as we grew our fluid recycling business. We knit together partnerships all across the upper Midwest. As projects came and went, unique multi-state coalitions of these partners would come together on demand.

What's needed are more partners. We need to create the infrastructure for entrepreneurship to thrive.

Community supported development is an idea whose time has come.

Friday, August 14, 2009

Slow Money - White Paper 1

When a group of us presented the case for the Driftless Foods Cooperative/Iowa County initiative to the Slow Money Institute in Madison, we came equipped with our proposals in writing.

Here is the text of the first white paper that introduced the design of our solution to our friends in Slow Money and those of us who came to learn that day. Two additional papers describing the details of our Iowa County initiative were also presented.

Driftless Foods Cooperative. Building the Next Steps

White Paper 1. Executive Summary. 7/25/09

The plan is to grow a network of interrelated, mutually supportive local food processing facilities on a county-wide scale under the direction of a leadership cooperative structure. Our goal is to create a highly transparent, well documented model that can be readily reproduced in other regions.

The Driftless Foods Co-Op will be a market-driven organization supplying locally produced and processed foods to the 35 million people in our local region.

Driftless Foods will be organized as a leadership co-op. This leadership level will provide business services for all individual facility teams that emerge from future business opportunities, including training, mentoring, research, sales, marketing, and financial support.

The core principles of the Driftless Foods Co-Op include regional fair trade, local control, promotion of local foods and local processing, and the distribution of profits to the producer level and the communities they live in. These core principles will be guaranteed in all future relationships created by the co-op.

A three-year design for a system of interrelated local food processing facilities is planned. These facilities will work in concert with the hub facility, an individually quick frozen (IQF) plant in the Village of Highland, Iowa County, WI, planned for year one.

In the following year two, the design calls for building a hydroponic / extended growing season facility in the Village of Avoca as well as an artisan dairy plant in the Village of Barneveld. At the Avoca site, plans are in place to utilize new waste digesters for heat generation to run the facility. In the following year the leadership team will add scale-appropriate, technology-driven facilities that process local/regional poultry as well as the growing goat and sheep herds in our region.

In the third year, the design also calls for the creation of a facility to process a Driftless branded line of regional pet foods. Not only will this benefit animal farming in the region, but it will also allow for food resources from the other processing facilities that may have been considered 'waste' products to be included in the pet food line as a high value-added benefit for the brand.

Clearly there is an immediate need to build out the IQF hub facility in Highland as a first step in building a local food network. As a stand-alone facility it is a compelling business case. As a base for creating a region-scale reproducible local food processing network it is vital.

The Driftless Foods team held its initial kickoff meeting in an 1875 school house, now the Town Hall for the Iowa County Town of Wyoming, just down the road from Taliesin.

Less than two weeks before the meeting, there were 15 people on the mailing list. Within that two weeks more that 200 people asked to join the list and over 50 showed up for the kickoff meeting. What was critical was who the attendees represented. Virtually every person there was a leader of a significant network of people involved in entrepreneurship, local foods, farming, and economic development.

What they reported after our meeting was the key value of the project as something that could be readily reproduced in their own areas and in areas with different agricultural and economic assets.

Driftless Foods Co-Op is an opportunity to create a reproducible local foods processing model that celebrates local foods, is profitable, and returns value directly to the producers, the communities they live in, and the regions that support them for generations.

Authors: Rick Terrien and Mark Olson

Slow Money Alliance

Friday, August 07, 2009

Local Food Processing. Small is Beautiful

When Woody Tasch from Slow Money came to town last week I was startled to hear him respectfully and with gratitude reference the book Small is Beautiful.

I'd read Slow Money and was struck by the possibilities but hadn't connected the work to E. F. Schumacher and his great book, "Small is Beautiful: Economics as if People Mattered."

But this is a natural 21st century marriage. Efficient, market-driven financial discipline, with sustainable goals and methods, (Slow Money) meets smart, appropriate-scale technologies, in this case taking the form of local foods and sustainable agriculture.

What a magic time for this combination to occur. Demand is off the chart for local foods. Production and processing techniques are faster, smarter, cheaper. Tools for design, organizing, marketing, sales and distribution have never been better or less expensive. I'm back to the fact that this is indeed the Renaissance age of entrepreneurship, and it's just beginning.

Food is an issue whose time has come. There is a wonderful quote from Wisconsin's own Aldo Leopold in his Sand County Almanac that ties in here. Think about the following Leopold quote in terms of sustainable agriculture, local processing, local foods and healthy, more compelling communities; "By and large our present problem is one of attitudes and implements. We are remodeling the Alhambra with a steam-shovel, and are proud of our yardage. We shall hardly relinquish the shovel, which after all has many good points, but we are in need of gentler and more objective criteria for its successful use."

Free markets have nurtured the greatest freedoms in human history, but we need to apply those tools in less destructive, more successful ways especially in the way we feed and nurture ourselves and the place we live.

As a group of us works to design an efficient, reproducible local foods processing system with our Driftless Foods, Iowa County initiative, none of us are taking anything as gospel. Small is beautiful not because it sounds good as a theory on paper but because technology has evolved small, smart, nimble processing equipment that makes better use of resources and produces higher, more sustainable profits. That's why small is beautiful. Schumacher was [is!] right.

Small is a matter of perspective certainly. The multiple local foods processing plants we are designing to work in a self-supportive coalition, are not garden sheds. They will take a lot of money by anyone's standards. They will be technologically and environmentally brilliant. Small? No, compared to farmyard vegetable stands. Yes, compared to the Wall Street backed food system now falling apart.

One of my favorite Schumacher quotes sums up what a new local foods processing system might look like: "The aim ought to be to obtain the maximum amount of well being with the minimum amount of consumption." That is, an ultra lean, wise production system that creates great multi-generational jobs for a community, passing the bulk of the profits into a pool that all contributors are compensated from equitably.

I'm going to post the first Driftless Foods Cooperative white paper that we produced by separate headline following this. It's a short overview of the project.

Small is beautiful because it is smart, sustainable and profitable. Above all else small is valuable because it is reproducible .

In economic terms, that's a beautiful thing.

The E.F. Schumacher Society

Small is Beautiful. Wikipedia

The Aldo Leopold Foundation

Aldo Leopold. Wikipedia

The Aldo Leopold quote in this post is from the dedications page of the 25th Anniversary edition of Small is Beautiful.

Saturday, August 01, 2009

Local food processing - the missing link

A great week for local food processing.

What a week of positive steps. Entrepreneurship is flowering in the world of local foods in ways that I have never seen. This is the renaissance age of entrepreneurship and it's happening extensively in local foods.

Several great highlights to report.

Wood Tasch was in Madison last Monday for their 5th Slow Money Institute. Woody and Slow Money are linked below.

My friend Bartlett Durand is from Otter Creek Organics in Iowa County, home farm of Gary Zimmer, a new friend I greatly admire and United States 2008 US Organic Farmer of the Year. Bartlett summed up the positive emotion in the room on the day of the Slow Money presentation when he fists-up challenged the room and the world with, "It starts here. It's starts now." That was not rhetoric. It was 'run toward the sounds of the guns' stuff (listen to the interview with Woody linked below to get an idea of the buzz in the room all day). The time for local foods is now. And it is erupting in Wisconsin in many amazing ways. Local food development and local food processing models will emerge from our region that will empower people worldwide.

I was privileged to be able to make a presentation about our Iowa County initiative, the Driftless Foods Co-Op, at the Slow Money Institute (SMI), along with my great partner in this adventure, Mark Olson from Renaissance Farm. Margaret Bau, legendary cooperative developer from USDA Rural Development and a member of our Driftless Foods organizing committee, also presented to the SMI.

The next day a few of us had an amazing two hour meeting with Mr. Rod Nilsestuen, our Secretary of Agriculture Trade and Consumer Protection in Wisconsin.

Mr. Nilsestuen was over-the-top helpful. Mark Olson and Lois Federman, both good friends I've written about, were at this gathering. When I think about all the meetings I've been to in my life, I count this among the few that I would call the most productive. We got to discuss the Iowa County initiative that we outlined at Slow Money the day before. Because we are proposing to organize as a cooperative, Secretary Nilsestuen's background and bias-for-action were transformative. What he was able to bring to our discussion was immeasurably helpful. Mark and I were executing valuable action steps before we hit the parking lot based on what we learned from the previous couple of hours.

Mr. Nilsestuen was the leader of the Wisconsin Federation of Cooperatives for 24 years, which represented about 860 co-ops with 1.8 million members in endeavors ranging from finance and insurance to rural development and agriculture. In 2003, Mr. Nilsestuen was inducted into the National Cooperative Hall of Fame at the National Federation of Cooperatives.

Driftless Foods will be organized as a cooperative because it makes sense for this specific application. I have not been a co-op guy in the past, but there are some inherently beautiful ways to design systems of interdependent, self-supporting enterprises that are perfect for a cooperative structure.

And as for the bigger picture of creating those enterprises and nurturing entrepreneurship...

As a working entrepreneur, the only secret I can reliably pass on about what kind of businesses are best to start is that you should look for what's broken and create opportunities from that. I can't ever remember a moment where entrepreneurship was on such a verge to flourish and succeed.

In the world of local foods, local food processing is the missing link. We have created enormous demand for local foods with consumers, food stores, and restaurants. The production, or supply side, is not being developed in ways that are sufficient to meet this demand.

My immersion into Slow Money early in the week followed by clear, valuable, tactical support for action from key stakeholders in government, academia, and the investor community was invigorating. This is a moment for local foods and for economies of all shapes and sizes to, as Bartlett said above, recognize that the time to change is 'right here, right now'.

I am personally enchanted with the work of Slow Money, and I am empowered by the vision of Mr. Nilsestuen.

I've been a working entrepreneur for more than 35 years. I have never in my life seen this level of commitment to entrepreneurship and creating new enterprises. Watching it happen in the world of local foods is breathtakingly cool.

I can't wait for next week!

Woody Tasch interview with Bill Lubing

Secretary Nilsestuen's CV at the Wisconsin Department of Agriculture Trade and Consumer Protection.

Otter Creek Organics

Lubing Creative

Slow Money new friend Odessa Piper: "Local is the distance the heart can travel." Odessa is the founder of the world renown L'Etoile Restaurant in Madison. She has promised to share her essay behind this quote in a future post.