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Detroit Soul

Detroit entrepreneurs redefine soul food

Financing

$50,000 Collateral Initiative investment enabling financing from Detroit Development Fund

Detroit, Michigan

In 2010, Detroit residents Jerome Brown and Samuel Van Buren started a catering business that served homestyle cooking, but with healthful substitutes. “My childhood memories are family gatherings where we all got together around food. But we wanted to make it better for you. The same soulful flavors, just made with lighter options,” says Brown.

So, collard greens are cooked with smoked turkey, not ham hock. Lard is swapped out for vegetable oils. But the meals still pack a flavorful punch. Turns out, others agreed too. While working full-time jobs for nearly ten years, and with the support of their wives, Brown and Van Buren built a robust customer base for their catering and to-go meals through Detroit Soul. In 2015, they went from operating remotely to a brick-and-mortar location where customers could call in and pick up orders. By 2020, they conquered the traditional 50 percent failure rate for small businesses and saw sales soar.

“We wanted to be that neighborhood place, where people could turn to for a good nutritious meal, and not have to go to fast-food establishments, which are everywhere,” says Brown.

To make it more affordable, particularly during the pandemic, they started offering half portions that were priced well under $10, ideal for one person. “We really didn’t want someone to feel like it was out of their reach,” he adds.

But there was one thing that Brown and Van Buren had not been able to do: Provide a place for folks to sit, gather, and have a meal together. They wanted a sit-down restaurant, in addition to their carry-out spot.

“Many people have been asking us, ‘why not have a proper place where I can come and bring my family,’” Brown says. “So we started looking at how to finance it, knowing that restaurants are not an easy business.”

Their first venture had been self-funded for years. But to build out a second location, Detroit Soul needed additional financing. Brown and Van Buren were introduced to a local lender, Detroit Development Fund (DDF), as they looked for a loan.

As a nonprofit organization and CDFI, DDF was intrigued, but cautious of making another restaurant investment given the number of other restaurants in its portfolio and the challenges facing the food service industry with the pandemic. In addition, because DDF makes loans of up to $250,000, this one was erring on the larger size.

To help de-risk the investment, DDF worked with Fair Food Network as a like-minded partner in the Michigan Good Food Fund. Fair Food Network contributed $50,000 to Detroit Soul’s deal from its Fair Food Fund Collateral Initiative. In fact, it was during the pandemic when many small businesses, especially those led by Black and Brown entrepreneurs, were at risk of being washed away, that Fair Food Network launched the Collateral Initiative as a credit enhancement tool to help de-risk investments for other business lenders like DDF.

With this additional collateral in place, DDF was able to fund the entire expansion loan, which closed in July 2021. “Had it not been for the Michigan Good Food Fund partners and the Collateral Initiative this deal may have been much harder for us to pull together,” says Angelia Sharp, a senior loan officer at DDF, and a patron at Detroit Soul.

But the support was more than just funds to live out their dream of a dine-in restaurant, Brown says. “It’s been nothing but hands-on support. If I have a question pertaining to the business, I have someone to turn to for advice.”

Follow-on business assistance is part of the Collateral Initiative, too. After the loan, Fair Food Network helped the duo with other business needs, such as marketing and building out a robust website, to further support the business’ success.

As part of Fair Food Network’s business assistance, a new website and culturally relevant content were developed to speak to the rich history of Detroit and the food Detroit Soul serves up daily. With the right marketing support, Brown and VanBuren could focus on other aspects of opening a new location.

Even with the experience of a corporate career, Brown and Van Buren joke that navigating all the regulations in the food industry have been mind-boggling. They got their first taste of forms, paperwork, and compliance regs when the two scoped out a kitchen for Detroit Soul. Brown says, “I remember spending a full 8-hour day going from city office to city office, asking why I had been charged certain fees and what were all the inspections I needed to be in business. There needs to be a roadmap for these kinds of things. I persevered, but many would have given up.”

Working alongside Fair Food Network and other local partners, Detroit Soul now has funding secured and business support at their disposal. Brown and Van Buren expect to open their second location and launch their new website in summer 2022. They hope to repeat the success of Detroit Soul once again.

Highlight

North Flint Food Market

A blueprint for food sovereignty

Financing

$100,000 bridge loan

Business Assistance

1:1 multi-year embedded support over five years

Flint, Michigan

After the Flint water crisis in 2014, the last two major grocery stores left the city’s north side, leaving residents without access to healthy food at the moment it was needed most.

Pastor Reginald Flynn, a Flint native who returned to the city 13 years ago to minister at the Foss Avenue Baptist Church, was not surprised. Nor was he going to beg them to come back.

Instead, spurred by residents, the North Flint Reinvestment Corporation, a place-based nonprofit led by Pastor Flynn, decided to open a new grocery store — one that was by and for the community.

Says Pastor Flynn, “This is a place where corporations come and go at their will. We don’t want to be subjected to that. We want to be the solution."

The journey has not been without financial and bureaucratic hurdles. Yet after six years, North Flint Reinvestment Corporation raised over $7 million and the North Flint Food Market broke ground, revitalizing a long-vacant and obsolete building.

Fair Food Fund was part of the capital stack, providing a critical bridge loan that helped cover transaction costs — a common hurdle, especially for community-based developers that lack deep balance sheets to prepay such hefty expenses.

Beyond financing, we’ve been honored to know and partner with Pastor Flynn over the past five years through our work with the Michigan Good Food Fund.

Given Fair Food Network’s deep work in Flint with our Double Up Food Bucks SNAP incentive program, we recognized early on the importance of this grocery project. In addition to bringing healthy food to North Flint, the coop was the first step toward a broader vision of community-first development and cooperative economics.

This was a project that needed to come to fruition, and we wanted to help. We engaged a member of our Fair Food Fund investment committee, Daniel Tellalian, founder and CEO of Angel City Advisors. With expertise in healthy-food retail and community-development finance, Tellalian served as an embedded thought partner and collaborator with Pastor Flynn, tackling the financial plan, brokering connections, and coordinating a complex capital stack.

It has been a long-haul adventure — more than five years, 12+ sources of funds recruited, tax credit financing, hundreds of hours, and a few thousand emails. Yet it is this type of integrated, long-term support that demonstrates the reimagined healthy-food financing that’s often needed to support good food enterprises.

It also models how investments follow community-driven priorities. Alongside public and private investments, the co-op market was funded by 900+ member-owners and more than $200,000 that was raised by the community itself.

While this project was powered by the vision and tenacity of Pastor Flynn, there were so many others that stepped up and provided financial support along the way, including the State of Michigan, the City of Flint, Charles Stewart Mott Foundation, Community Foundation of Greater Flint, Ruth Mott Foundation, ELGA Credit Union, USDA Community Food Projects, Healthy Food Financing Initiative, LISC, and the Food Co-op Initiative, as well as other community funders and New Markets Tax Credit partners.

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Supermercado Mexico

Local grocery chain triples its footprint to meet local demand

Financing

$100,000 participation in a $346,800 loan with Northern Initiatives, a fellow Michigan Good Food Fund lender

A white map of Michigan with a purple dot on Grand Rapids

Grand Rapids, Michigan

Supermercado Mexico is a local grocery chain with three stores in Western Michigan’s Grand Rapids metro area. The Division Street location opened in 2011 in a corridor of businesses serving a largely Mexican and Mexican-American clientele. It has since become the company’s anchor grocery location featuring a full-service butcher, produce, baked goods, and other culturally relevant products and services.

The stores are owned by Olvera Enterprises, which is led by brothers Javier and Pablo Olvera, who have years of food-retail service experience. In addition to the three grocery stores, they also own a taqueria and bakery in town.

Yet the Olveras’ commitment to supporting Hispanic-owned businesses in the Grand Rapids community runs deeper: In the works is also Placita Olvera, an ambitious multi-use project that aims to transform an old factory building into a multi-use space featuring a brewery, multiple Mexican restaurants, as well as office space for Hispanic-led businesses and nonprofits in the area. The Olveras also envision hosting an outdoor farmers market to bring fresh food into a neighborhood that lacks many other options

As Supermercado Mexico's store outgrew its Division Street location, the Olveras purchased a building next door to expand. This move tripled the size of their flagship store and bumped up staffing needs to 20 more employees.

This all required an upfront infusion of capital.

In response the Olveras turned to one of their trusted lending partners, Northern Initiatives. Through its role as a lending partner with the Michigan Good Food Fund, Northern Initiatives had also provided a 2018 loan supporting the Placita Olvera project.

While Northern Initiatives was unable to commit to the full amount needed, they saw the potential in the project and brought it to other Michigan Good Food Fund lending partners for consideration and collaboration.

Given the strong mission fit for Fair Food Fund, we were excited to work together to make this investment possible.

In July 2021, Fair Food Fund provided a $100,000 participation in a $346,800 loan with Northern Initiatives. December 2021 saw follow-on financing also in partnership with Northern Initiative. Together, these investments are supporting building improvements, equipment, and working capital for the expanded store.

"Supermercado Mexico is a longtime Northern Initiatives customer. We were pleased that the Fair Food Fund joined us in supporting their latest expansion since we share the same goal – healthy, thriving communities," says Elissa Sangalli, President of Northern Initiatives.

Today, Supermercado’s doors are open, welcoming the community to a beautiful new store. From the outside’s street appeal to the inside’s vibrant colors and hand-painted murals celebrating different states in Mexico, the new store has created a buzz. Store manager Benjamin Cochran notes that they’re seeing many new faces with a considerable number of people stopping in to see the murals and find their home state.

"The Supermercado Mexico and Olvera Enterprises teams poured their hearts into making this store everything it could be and more,” says Cochran. “This is all for the betterment of the community; without the community, none of this would be possible. They deserved better, so we wanted to give them better. More space, new installations, a larger product selection, but with the same great service and experience they've known for years. We are so proud of all our teams for all their hard work and look forward to providing the community with all their needs in one stop!"

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Daily Table

Grocery chain on a mission brings together Double Up and financing

Financing

$125,000 Line of Credit

Business Assistance

Double Up Food Bucks partner since 2018

Dorchester and Roxbury,
Massachusetts

“America’s food system is a paradox: We have hunger alongside sky-high rates of obesity and diet-related illnesses, often in the same places. Healthy foods, especially fruits and vegetables, are economically out of reach for a lot of families. It’s not just a shortage of calories; it’s a shortage of affordable nutrients.”

Michael Malmberg

Chief Operating Officer, Daily Table, a nonprofit grocery store chain in Massachusetts

Daily Table is on a mission to change that equation. It provides fresh produce, grocery staples, and made-from-scratch prepared foods at prices low enough to fit within every budget, including families who rely on SNAP (Supplemental Nutrition Assistance Program, formerly known as food stamps).

It also roots in communities most in need, starting in the diverse Boston neighborhoods of Dorchester and Roxbury. “We had a customer tell us that she was able to buy berries for the first time because otherwise they’re beyond her budget. The barriers to healthy eating are truly economic,” Malmberg reiterates.

Daily Table’s unique model is the brainchild of Doug Rauch, former president of Trader Joe’s. There are some similarities: Daily Table stores have a small footprint at 3,000 to 4,000 square feet, a fraction of some of the grocery superstores, which can top out at 25,000 square feet. This keeps costs low and builds on the Trader Joe’s-like experience: Far fewer products (at about 500) and a more personalized shopping experience.

Daily Table also makes a concerted effort to be a bright, upbeat, and welcoming place for everyone. “We don’t have security guards following you around, which I see in a lot of urban markets,” Malmberg says. “It goes back to treating people with dignity. We want to earn your patronage just like any other store.”

But what makes Daily Table stand out is its produce-first focus and its methodical commitment to low prices, offering customers 30 percent in savings compared to other grocery stores.

“As a nonprofit, we can take advantage of favorable pricing from suppliers who value our mission, volunteers to help with tasks in our kitchens, and discounted or donated foods, which a for-profit entity could not do as easily,” says Malmberg. In addition, its nonprofit status opens opportunities, including accessing grants and donations from the local community and philanthropic donors.

While most of Daily Table’s food is purchased from traditional vendors, a unique aspect of its supply chain is sourcing products that are closer to their “sell by” date than could be sold to a traditional retailer. While still high quality and safe, these products are often available at steep discounts or even donated. This allows Daily Table to pass along savings to its customers, while balancing out the razor thin margins on many of its other products.

For families that rely on SNAP, their food dollars have gone even further at Daily Table since it launched the healthy food incentive program Double Up Food Bucks in 2018. With Double Up, shoppers get 50 percent off fruit and vegetables bought with their SNAP dollars, up to $5 a day.

Oran Hesterman, our founder CEO, was thrilled with Double Up’s success at Daily Table. “It was the fastest start we’ve ever seen with Double Up. Daily Table was doing more business in three months than other stores were able to do in one year.”

As COVID pushed one in eight Americans into hunger, Daily Table’s grocery stores became even more essential.

Massachusetts saw a nearly 60 percent increase in the state’s food- insecurity rate, one of the largest increases in the country. Daily Table’s SNAP and Double Up purchases soared: In 2020, Daily Table had nearly $200,000 in Double Up Food Bucks redemptions, a 54 percent increase over 2019.

To expand its reach, Daily Table opened a third location in Central Square, Cambridge in 2021 and is in the process of launching two additional stores in 2022 — all of which is growing its need for working capital.

To help fill the gap, Daily Table turned to Fair Food Network’s Fair Food Fund for a $125,000 line of credit. This investment will free Daily Table from having to tap its grant dollars for inventory purchases or overhead costs, instead prioritizing those dollars to support Double Up redemptions.

Such flexible financing will provide Daily Table with a crucial bridge through low-cash periods during this expansion phase, particularly in between grant cycles or when philanthropic funding is low.

For our Fair Food Fund, it was a natural fit.

“With its focus on affordable, fresh food and its commitment to paying livable wages and hiring directly from the neighborhoods it serves, Daily Table is a natural mission fit,” says Hesterman. “Overlaying financing with our Double Up partnership was a win-win.”

As Daily Table expands to new locations, Hesterman is excited not just for communities in Massachusetts but beyond. “If this model can work economically, it has massive implications for communities across the country that lack healthy food options.”

Malmberg agrees. “We are working hard to further develop and refine the Daily Table model in Boston in the coming year with the goal to expand to new geographies. We believe that Daily Table can be the first truly scalable solution to nutrition insecurity in America.”

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Orchestrating an Ecosystem

with the emerging Camden Community Food Fund

While 2020 saw the seeding of new work in Camden, 2021 saw it coalesce and root locally.

Camden is a city with strong civic ties and an entrepreneurial spirit. It is home to esteemed universities, hospitals, and corporations and in recent years has seen an influx of new investments and community development.

Despite such assets and the success of the broader Northeast region, Camden’s majority Black and Brown residents have often been left out of the opportunity, wealth, and power surrounding them.

Local groups recognized that more equitable growth required aligning future investments in the vision, priorities, and entrepreneurialism of its residents.

In 2020, a new collective began to emerge that aimed to do just that. They focused on the food sector, where local businesses are both the backbone of every neighborhood and the key to job creation and healthy food access.

Support for this work was seeded by Campbell Soup Company and the Campbell Soup Foundation, rooted in Camden for over 150 years. We were honored to be invited to support the design phase and initial partnership development leveraging our experience with place-based investment collectives.

2021 saw the coming together of more than a dozen partners including local community development corporations, community engagement groups, Rutgers University-Camden, and The Food Trust among others. It also saw the emergence of the Community Foundation of South Jersey as the local leader to take this effort into implementation.

2022 will see the establishment of a majority resident Community Board developed through neighborhood-based community engagement. The Board will be responsible for setting the fund’s vision and investment priorities in support of local food businesses. It will also hold community accountability to the work through implementation.

This work is at the intersection of equity and power, modeling how we can better meet local entrepreneurs where they are while also ensuring the flow of capital and investments supports food access alongside racial equity and community self-determination.

What makes this effort stand out is not just its commitment to community voice, but its work to orchestrate an entire ecosystem of partners around community-identified priorities, including for lenders using their own balance sheets.

We look forward to continuing to partner in this innovative collective and support future investments for a more equitable and resilient Camden.

Detroit Soul

North Flint Food Market

Supermercado Mexico

Daily Table

Orchestrating an Ecosystem

Local Impact

Community-Driven Financing

Orchestrating an Ecosystem