AUGUSTA, Maine — MOOMilk, a producer of organic milk, received the single largest investment in its existence this week, an amount large enough to stabilize the startup for the foreseeable future, according to its chief executive officer.
An anonymous benefactor from New Hampshire has invested $3 million in MOOMilk, which stands for Maine’s Own Organic Milk. The company launched in 2009 after H.P. Hood Inc. dropped 10 Maine organic dairy farmers.
It is organized as an L3C company — a low-profit, limited liability corporation that can receive grants and endowments as if it were a nonprofit or co-op.
MOOMilk produces 11,000 gallons of organic milk a week from 12 farms throughout the state. Last week, MOOMilk was able to sell 83 percent of that milk at organic prices, according to Bill Eldridge, MOOMilk’s CEO.
However, the company has been “pretty hardscrabbled since the beginning,” said Eldridge. This investment will help stabilize the Augusta dairy company.
“It puts us on firm financial footing for the first time in our existence and completely changes how we look at the company going forward,” Eldridge told the Bangor Daily News on Wednesday. “This will provide us the opportunity to support our brand and the company as we go forward with marketplace initiatives.”
The deal closed Monday, he said.
The $3 million is an equity investment, meaning the unnamed investor is now part owner. Eldridge wouldn’t say what percentage of the company $3 million buys, but that it is less than 50 percent.
The deal was facilitated through members of a growing network known as Slow Money Maine, a group of farmers, entrepreneurs and businesspeople interested in supporting local and sustainable food systems.
Eleanor Kinney, who lives in Bremen, is a member of Slow Money Maine and has been an investor in MOOMilk since the beginning. She said the $3 million investment “is huge” and will allow the company to pump up its marketing budget.
“We’ve been an undercapitalized startup and therefore have not been able to do the kind of marketing we want to do,” she said. “We need to redesign our carton, re-do our ads, all those things that help build a brand and grow our markets.”
The new investment also will allow new products to come online, Eldridge said.
We “hope to introduce chocolate milk by this fall and we’ll be looking at a whole number of other products as well,” he said.
Eldridge did offer the following hint as to the investor’s identity: “He is an individual who has been associated with and dealt with the organic and natural food business for the last 40 years, so he brings a lot to the game — not just money, but an incredible knowledge of the industry and how things operate.”
However, the investor did attach an usual precondition, Eldridge said.
A few years ago, when MOOMilk was undergoing financial restructuring, its farmers were forced to convert a portion of the money they were owed for milk into equity. That meant less cash for the farmers, an occupation that traditionally struggles with cash flow problems.
“This investor said the company had to repurchase those equity units,” Eldridge said, “and we implemented it today.”
That means five of MOOMilk’s original farmers, as well as three others that have since left, split a little less than $100,000 today, Eldridge said. That has made the farmers very happy, he said.
Kinney said the investment is the latest chapter in the company’s journey and indicates MOOMilk’s success.
“MOOMilk exists because of the dedicated farmers who hung in there, a CEO who hung in there and because of some very loyal investors who stuck with the company,” Kinney said. “It’s taken a lot of people believing in it even when it had no cash to keep it going.”