Maine’s local food industry growing with investments from Slow Money Maine

Posted June 01, 2013, at 6:03 a.m.
Last modified June 01, 2013, at 11:37 a.m.

In Aroostook County, a vegetable processing facility expands to help farmers sell their produce directly to consumers.

A gristmill in Skowhegan is reigniting central Maine’s grain industry.

In Wales, a butcher works with two dozen pasture-based farms to sell fresh chops to locavores.

Though located in disparate areas of the state, these enterprises all have one thing in common: Slow Money Maine.

At its most basic level, Slow Money Maine is a network of farmers, entrepreneurs, investors and philanthropists joined to strengthen local and sustainable food systems through cash and support. This national movement has wide implications for how people will invest their money and where they get their food from in years to come. And Maine, with its “buy local” pedigree, is fertile ground.

It’s not a nonprofit or a venture capital fund. It’s not incorporated; it doesn’t have its own budget or headquarters. Founder Bonnie Rukin calls it a “facilitator of connections.”

“We convene meetings,” said Rukin, who coordinates bi-monthly gatherings in Augusta and an annual event in November. “We connect people to each other and we help to catalyze the flow of funds to help support people in their endeavors.”

At the most recent meeting in early May, 80 people traveled from all corners of the state to network and hear presentations from farmers-cum-entrepreneurs.

Since 2010, Slow Money Maine has secured more than $7 million in equity investments, low-interest loans, grants and loan guarantees to food-, agriculture- and fishery-based businesses in the state, according to Rukin. A large chunk went to MOOMilk recently.

The assistance by Slow Money Maine has helped companies such as Somerset Grist Mill in Skowhegan, which in 2011 began producing flour from Maine-grown grains; MOOMilk, the organic milk producer that was created with the help of Slow Money investors after H.P. Hood canceled its contracts with a handful of Maine organic dairy farmers; and entrepreneurs such as Ben Slayton, owner of Farmers’ Gate Market, a butcher shop in Wales.

A butcher shop grows

On a recent morning, Slayton was in his shop carving a pig raised on Old Crow Ranch in Durham. His processing facility, along with a pig’s carcass, is visible through a large window. A case is full of skirt steaks, smoked hocks, chuck roasts and chicken wings.

Each package of meat is stamped with the name of the Maine farm where the animal originated: Steaks from Little Alaska Farm, chicken breasts from Snafu Acres in Monmouth, pork chops from Old Crow Ranch, lamb steaks from North Star Farm in Windham.

“Our whole point is to be as transparent as possible,” Slayton said. “We try to operate as if everything we do is going to be printed in tomorrow’s paper.”

After purchasing the small butchering facility, where he started as an apprentice, in 2010, Slayton built his own chicken processing facility. He offers freshly harvested birds to customers as boneless chicken breasts days after they roamed free.

Slayton first presented at a Slow Money Maine meeting in late 2011 and accessed $10,000 in grants and low-interest loans through network connections.

The boon came at a time when Slayton’s business wasn’t “bankable,” he said. He needed funds to buy equipment and get his operation off the ground.

“Slow Money recognizes that a little invisible hand, a little light touch, is needed to usher these businesses along,” Slayton said.

Last month, Slayton was back at Slow Money Maine with expansion plans. He wants to open a retail location in South Portland in collaboration with Jordan’s Farm in Cape Elizabeth. He’ll need $55,000 to get the space outfitted and is exploring ways to raise the funds.

The informal nature of Slow Money Maine’s meetings — part networking, part potluck and part business pitches — enabled Slayton to tap sources he wouldn’t otherwise have access to.

The process is “a little bit foreign to farmers and people like me who aren’t in the traditional capital-raising professions,” Slayton said.

A local pursuit

The Maine group is a chapter of the national Slow Money organization, which was founded in 2008 by Woody Tasch, an investor and author of “ Inquiries Into the Nature of Slow Money –- Investing as if Food, Farms and Fertility Mattered.”

Since the group’s founding, 16 state and regional chapters have formed.

Measured in the amount of funds it distributes, Slow Money Maine is the most active in the country, according to Tasch.

The national group estimates $30 million has flowed through the organization and state chapters. Slow Money Maine is responsible for facilitating approximately 23 percent of the nationwide total.

“You don’t love one child more than the other child,” Tasch said, “But pretty much from the beginning, the state of Maine has been the leading, or one of the leading, chapters.”

To Tasch, the movement is simple.

“It’s a network of entrepreneurs and investors and philanthropists and farmers, aka people, from around the country who are collaborating together to put more money into small food enterprises and local food systems,” he said.

Tasch was inspired by the Slow Food movement — an alternative to fast food that favors buying and eating local — but there’s no official connection between the two.

Think of Slow Money as the opposite of fast money, which defines the current global financial system, said Sam May, a former Wall Street analyst and global banking professional who lives in Portland and is an active Slow Money Maine member.

“Fast money is day trading. Fast money is looking at financial assets on a screen: Green is up, red is down and white is neutral. And I want green,” May said. “Slow Money is about patient capital, about the preservation of capital and looking at how to rebuild an appropriately scaled finance system that works for more people.”

Slow Money Maine is meant to be an egalitarian movement. The idea is to create an environment where it’s just as common for someone to invest in a local gristmill as it is to buy stock in Apple Inc., May said.

Anyone who belongs to a community-supported agriculture program or shops at farmers’ markets already support the notion. Slow Money members are pushing it to the next level.

“We’re trying to build a deliberate movement to relocalize investment opportunities,” said May, who has pulled roughly $75,000 out of traditional investments to fund local food startups including Scarborough-based VitaminSea, which recently vied for a $50,000 grand prize at a national Slow Money gathering in Colorado.

VitaminSea, which makes food products from Maine-harvested seaweed, didn’t win but did gain national exposure.

May realizes not everyone has excess cash to invest in local businesses, but he sees Slow Money Maine as fostering an environment where people feel comfortable investing 5 to 10 percent locally.

“This is about creating a healthier environment for people to begin moving some of their investable assets into local businesses and have their risk profile be no greater than putting them into the global stock market,” he said.

For Eleanor Kinney, a Bremen resident and investor in Maine, participating in Slow Money Maine allows her to align her investments with her values.

“It’s no longer about buying local and eating local — it’s about investing local, as well,” Kinney said. “So I wanted to not have just traditional investments on Wall Street. I want more and more to be investing in people and places I know.”

A way for more people to participate in investing local is through investment clubs such as No Small Potatoes, which grew out of Slow Money Maine. The Portland-based group includes 17 members who each contribute $5,000 to provide low-interest loans to companies such as Farmers’ Gate Market, said Kinney, one of the organizers of the investment club.

“By pooling our money, we’re able to spread the risk,” Kinney said. “So if you lose a loan it’s not like one person lost the whole thing.”

The No Small Potatoes model has since been replicated by a half dozen investment clubs across the country. No Small Potatoes has had to turn down members, so there’s a new investment club starting in York, Kinney said.

Room to grow

There was a time, as recently as the 1980s, when farmers in Aroostook County harvested millions of pounds of peas, which were processed and frozen before being sold across the country, according to Chris Hallweaver, a food entrepreneur who lives in Aroostook County.

That era ended when the Birds Eye processing facility in Caribou shuttered in the 1970s. Without an outlet for their crops, Aroostook County farmers stopped planting large amounts of peas, moving The County closer to a monoculture focused on potatoes.

“So much of that infrastructure has been lost because of consolidation and industrialization of agriculture,” Kinney said. “There’s a big emphasis to rebuild that infrastructure so it leverages the ability for farms to grow and expand.”

Today, farmers in Aroostook County are planting peas again, along with carrots, turnips, beets and broccoli, destined for Hallweaver’s new vegetable processing facility in Van Buren, made possible through Slow Money Maine.

Hallweaver launched Northern Girl in collaboration with Leah and Marada Cook, who operate the Crown O’ Maine Organic Cooperative. The company receives fresh vegetables from 12 farms and processes them for fresh and frozen markets. It distributes in Maine and Massachusetts.

Northern Girl received a $300,000 equipment grant from the state but needed working capital. For that, Hallweaver reached out to Slow Money Maine. The company was able to generate two years’ worth of working capital from five individual investors and one institutional investor, he said.

Now Northern Girl is moving into a larger space in Van Buren and Hallweaver is looking to the network for help.

“As we prepare for this move we’ll need additional working capital as we build out this capacity,” Hallweaver said. “We’ll be making that ask coming up.”