This year we assumed administrative management of the Michigan Good Food Fund, a statewide food financing collaborative designed to support food entrepreneurs sparking positive change in their communities.

This shift came at a significant moment. Partners had collectively infused $17 million in loans and grants and served 300 Michigan-based food businesses since the collaborative’s inception in 2015. Despite this initial success, Michigan Good Food Fund partners recognized the need to anchor its next phase of food investments in community voice and pivot to meet the most pressing needs facing local businesses.

As founding members, we asked ourselves: Are we meeting the needs of those we intend to serve? Are there gaps in our capital product offerings? What is the role of technical assistance? And ultimately, what does success look like for those on the ground leading the charge in their communities?

This reflection set off a year-long journey of listening sessions, working groups, and collaborative co-creation to re-ground this place-based initiative in the vision and priorities of the Michigan entrepreneurs it seeks to support.

As we closed 2021, a new Stakeholder Board was established to define the investment priorities for the Michigan Good Food Fund moving forward. The group sparked thinking about what the future can hold – including ways the collaborative can create greater impact for the state’s mission-led good food businesses with a focus on people who are most often overlooked by traditional investors, particularly people who have been marginalized due to their race, ethnicity and/or gender.

Read on for highlights from a conversation with Jean Chorazyczewski, one of Fair Food Network’s leads on behalf of the Michigan Good Food Fund, who shepherded this work on what we’ve learned, where we’re still learning, and the work ahead.

Why a Stakeholder Board?

JC: The purpose of our Stakeholder Board is to integrate community input and participation in our work. This group ensures our work going forward addresses—and is held accountable to—community-identified needs. The Stakeholder Board’s role is to co-create Michigan Good Food Fund’s vision of success, set investment policies and priorities, inform strategies, and maintain accountability of the collaborative’s partners to impacted beneficiaries. Stakeholder Board members also help connect the collaborative’s partners to community and entrepreneurial networks across Michigan, ensuring investments respond to community-identified needs.

What did you learn in your listening sessions?

JC: After stepping into administrative management of this initiative in early 2021, Fair Food Network started by deep-dive listening sessions with the collaborative’s existing partners. At the same time, our team organized working groups with a broader network of partners, including entrepreneurs. We wanted to learn their perspectives on three specific topics: Mission and metrics, community voice, and capital and technical assistance providers and offerings.

Our extended conversations raised successes and strengths as well as missteps, gaps, and challenges. It also led to some “ah-ha” moments and planted the seed for broader paradigm shifts. Across discussions, common themes included:

Addressing global issues, such as climate change and growing inequity, through food
Defining who Michigan Good Food Fund aims to serve and do better in identifying needs in different communities
Better connecting business assistance to real capital, especially for businesses owned and operated by people of color
Understanding the role of healthy food and how it’s defined in the collaborative moving forward
Expanding our reach to food entrepreneurs in every corner of the state

Fair Food Network compiled themes, insights, and recommendations for consideration by an independent Steering Committee. The Steering Committee then nominated candidates for the new Stakeholder Board to take these ideas and chart the course forward for the collaborative.

Who is included in the Stakeholder Board?

JC: Our collective intention was to re-ground this work in community voice by bringing together knowledgeable, representative voices from across Michigan and the food value chain. This meant farmers, local food entrepreneurs, grocers, and community leaders working alongside business assistance and capital providers to chart the work forward and have a shared voice in its work.

What strategic shifts is the Stakeholder Board making?

JC: The Stakeholder Board developed a new mission, investment policies, impact objectives, and portfolio performance targets that ushered in significant shifts.

This included a commitment to more diverse capital products and a shift from independent
business assistance and capital deployment to integrated and sustained investments. In addition, instead of prioritizing loan readiness and healthy food as primary filters, the collaborative recognized that some projects take years to come to fruition. Michigan Good Food Fund wants to partner with entrepreneurs to co-create outcomes and help them reach their future goals rather than invest solely in what’s happening today.

Finally, the Stakeholder Board elevated an “act local, think global” ethos that reframes local food financing as a tool to address some of the most pressing issues we face globally, including climate change and growing inequalities. We’ve continued to discuss its relevance in the collaborative’s work in 2022.

Fair Food Network serves as both an administrator of the initiative as well as a lender with its Fund. What role can a nonprofit Fund play in this network?

JC: As a social impact organization, Fair Food Network can focus on mission-aligned investments. This allows us to be more impact-oriented and less beholden to traditional financing structures.

In practice, this means much more creative and catalytic investments. Fair Food Network’s investment can take early action, providing a signaling investment so others can come behind us. We can take bets on “riskier” entrepreneurs when we feel the potential impact is high. We understand the food financing landscape and when there’s a sticking point, and we can work to unlock others’ capital – financing food businesses that may otherwise be declined. As a private impact fund, we’re also not locked into any single capital product. Our Fund aims to start with the entrepreneur’s needs and craft an integrated financial solution that fits their needs.

While our Fund is still growing, we hope this flexibility allows us to break new ground and be an additive partner to the broader community of food lenders and impact investors.

What’s a lesson learned that you’d like to share with others?

JC: Our team learned about the importance of patience in the process. It takes time to engage stakeholders and bring them up to speed on progress and, ultimately, let them decide where success lies. For a can-do organization like Fair Food Network, it was challenging to pause and spend the time it takes to truly listen and learn.

That said, it was well worth it. There is not only empowerment and enthusiasm in engaging the community, but also incredible ideas offered by those proximate to the problem. Our collaborative remains grateful to our partners, work groups, Steering Committee, and Stakeholder Board who invested their time and shared their knowledge to chart a new path forward for the Michigan Good Food Fund.

What would you elevate for a potential funder or investor?

JC: The Stakeholder Board has defined what success looks like and set our vision. A diverse network of partners, including representatives from across the state and various sectors, are now at the table. In addition, more than a dozen groups providing capital to food entrepreneurs in Michigan have signed onto this community-driven collaborative.

The Michigan Good Food Fund is a unique opportunity for funders and investors looking to deploy values-aligned capital, aligned with community-defined priorities and oversight, at scale.

Daily Table

By josh_loop | June 24, 2021

Highlight

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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