Essential food businesses: Supporting entrepreneurs during the pandemic
MSU Center for Regional Food Systems and the MSU Product Center are helping food business entrepreneurs acquire skills and financing to succeed during the pandemic.
Although the coronavirus pandemic has dramatically changed how business is done, the work of food entrepreneurs remains as important, and as challenging, as ever.
More people cooking at home and high demand at grocery stores has sparked an increased interest in purchasing from local farms and food businesses. Restaurants, caterers, food product makers and meal plan services have been hustling to keep customers and communities fed during this challenging time.
MSU Center for Regional Food Systems and the MSU Product Center are helping food entrepreneurs acquire the skills and financing they need.
One of those clients is MenuBubble, a Michigan-based healthy meal-prep company serving Ann Arbor, Detroit, Flint, Grand Rapids and Greater Lansing. CEO Malik Jackson said the company focuses on healthy eating and making good food more accessible.
Jackson took the CEO position in August 2019. He fell in love with entrepreneurship when he took a business development class as part of his chemical engineering coursework at MSU.
“What really interested me was that I always enjoyed working on social ventures,” he said. “It’s all about leaving an impact on the world that’s not just capital gain.”
MenuBubble is making sure that the meals it sells are affordable and made with ingredients from local farmers and other food product makers whenever possible. They are planning to launch subsidizing programs that will decrease cost to some customers.
“We just want to make sure that wherever we’re sourcing from, we can leave an impact on the local community,” said Jackson.
Pivoting food businesses during the pandemic
The pandemic has forced many food businesses to get creative to continue selling their products and services.
Jamie Rahrig, an academic specialist at MSU Center for Regional Food Systems, said food entrepreneurs have adapted to the pandemic in various ways.
“A caterer may have shifted to selling individual meals that are ready to take home and eat,” she said. “Or there are entrepreneurs who have started providing food demos during lunch time so people can log on and see how to use the product and get some great recipe ideas.”
Rahrig works with healthy food and farm businesses across Michigan, providing technical assistance and network connections to help entrepreneurs find financing that supports their goals and vision. She is able to do this work successfully through the connections she has within MSU.
“I manage the Michigan Good Food Fund at the MSU Center for Regional Food Systems, and I’m part of the MSU Product Center Innovation Counselor team,” she said. “I’m also part of MSU Extension within the Community Food System work team.”
The Michigan Good Food Fund is a $30 million public-private partnership loan fund that provides financing to food enterprises working to increase access to affordable, healthy food in low-income and underserved communities in Michigan.
The MSU Product Center works with Michigan entrepreneurs and businesses to develop and launch new food, agriculture and natural resource products and services into the market. MSU’s technical expertise, as well as research and outreach services are accessible to entrepreneurs who receive business assistance through the Product Center.
As a Michigan Good Food Fund founding partner, the MSU Center for Regional Food Systems provides business assistance and pipeline development for agricultural production and food aggregation, distribution and processing.
In 2018, MSU Center for Regional Food Systems led a partnership with the Michigan Good Food Fund, Michigan State University Extension and the MSU Product Center to create Rahrig’s position, which connects the work of these four organizations.
“In order for the Michigan Good Food Fund to fully engage the MSU Product Center as a partner, the person working on the Michigan Good Food Fund needed to functionally be part of the MSU Product Center team also,” said Rich Pirog, director of the MSU Center for Regional Food Systems.
“We devised a solution for this new position to be an academic specialist with the Center for Regional Food Systems, as well as attend all the MSU Product Center innovation counselor meetings and be recognized as a member of their team. This provided a strong link across [these teams] through Jamie’s position.”
Rahrig, through her role as a Product Center innovation counselor (much like a business coach), has recently been working with MenuBubble.
“[Jamie] has been very resourceful and very helpful with the different things we’re looking for,” said Jackson. “She connected us with a professor who helped us get [the] cost [of shipping logistics] way down.”
Entrepreneur creativity overcomes challenges
During the pandemic, Rahrig noticed several similar needs that food businesses have been seeking solutions for.
Multiple rounds of state, federal and local business assistance have been offered, but many small business owners have been left out. Some grants launched and closed within a week, providing a brief window for communication to reach those who needed it most. Several relief programs operated on a first-come, first-serve basis.
Many young farmers and farmers of color have been excluded from federal assistance programs due to the crop eligibility requirements, reporting requirements and requirements for citizenship status. Rahrig noted that the large amount of paperwork these applications require often discourages small food businesses from applying.
These challenges for business owners have also been opportunities for creativity and community building. Over the past six months, Rahrig said she has helped many of her Michigan Good Food Fund and Product Center clients write applications for coronavirus assistance grants and loans. Strategizing about ways to pivot businesses to maintain cash flow has also been a priority.
“I think creativity has been the number one thing to try to help a business pivot,” she said.
To spark creativity, the Michigan Good Food Fund and MSU Product Center have hosted virtual networking and idea sharing opportunities throughout the pandemic. One webinar series focused on different sales channels that food and farm businesses might sell through. Another series explained strategies for analyzing cash flow and understanding financing options.
“Small businesses make the threads and fibers of the community. By supporting an entrepreneur or business to stay afloat, we believe that has ripple effects across a neighborhood.” Imran Mumtaz, program manager and loan fund manager at Michigan Women Forward
The Michigan Good Food Fund also offered peer-to-peer sessions, where entrepreneurs could connect with others who run similar businesses to share ideas and best practices for keeping their businesses afloat.
On top of making ends meet and ensuring cash flow during a time when in-person services are reduced or restricted, food business owners must consider new ways to engage with customers.
“This fall we will host a virtual program for brand new entrepreneurs focused on the many services we offer at the MSU Product Center. We have rescheduled Making it in Michigan for April, 2021 and hope to offer some new and innovative education and outreach for attendees and Product Center clients, as well as some really exciting partnerships in the state,” said Mollie Woods, MSU Product Center director.
Investing in a good food future
Even before the pandemic, there was great need for investment in healthy food businesses in Michigan. Rahrig and the Michigan Good Food Fund work with community development financial institutions across the state and country to meet this need.
“Small businesses make the threads and fibers of the community,” says Imran Mumtaz, program manager and loan fund manager at Michigan Women Forward. “By supporting an entrepreneur or business to stay afloat, we believe that has ripple effects across a neighborhood.”
Michigan Women Forward is a philanthropic institution that provides financing for Michigan Good Food Fund clients. The two organizations work together to support food business entrepreneurs at the intersection of their mission-driven work.
“We share similar views of how we can improve entrepreneurship engagement and how we can do that from a financial support aspect,” says Mumtaz.
“Our relationship [with the Michigan Good Food Fund] has been super helpful. I think one of the biggest areas for improvement in terms of entrepreneurship support is more directed assistance outside the lines of direct financial engagement, like genuinely trying to improve [entrepreneurs'] business acumen. Jamie has been incredible at that.”
Michigan Women Forward’s Michigan Entrepreneur Resilience Fund provides recovery microloans and partial loan forgiveness to entrepreneurs and small businesses from underrepresented groups.
Mumtaz said that the core idea behind the Resilience Fund was to help entrepreneurs sustain their work outside of the typical lending process.
“When people start to reopen, they’re going to need a quick capital infusion,” he said.
The Resilience Fund recently awarded a microloan to one of Rahrig’s Michigan Good Food Fund clients in Detroit. The entrepreneur runs their successful business using a smart phone, so Jamie’s assistance with the loan application was critical.
Rahrig also supports food business owners through a tool she updates regularly called Funding Sources for Food-Related Businesses, now in its fifth edition. The resource details dozens of funding opportunities, including crowd funding, accelerator, federal and miscellaneous resources.
The MSU Center for Regional Food Systems, Michigan Good Food Fund, and MSU Product Center support food entrepreneurs because they are essential to keeping Michigan’s economy going and keeping Michiganders healthy.
“Our teams are really looking to increase economic development within the state,” said Rahrig. “We want to see our state have healthy and viable food and farm businesses.”
In other words, Michigan’s food entrepreneurs are foundational to a vibrant Michigan.
You can download Funding Sources for Food-Related Businesses from the MSU Center for Regional Food Systems website.
Visit the Michigan Good Food Fund website to read about other entrepreneurs receiving financing or technical assistance from the fund.
This article was published in In the Field, a yearly magazine produced by the College of Agriculture and Natural Resources at Michigan State University. To view past issues of In the Field, visit www.canr.msu.edu/inthefield. For more information, email Holly Whetstone, editor, at email@example.com or call 517-355-0123.