All Organizations – Food Pantries Included – Can Innovate On Their Business Model

At the Food Finance Institute, we often first work with food entrepreneurs on clarifying and understanding their business model. We do this because the business model is the sum of all the things that ensures the organization sustainably makes money and delivers on its core products, services and mission. What many food entrepreneurs don’t often realize is that innovation comes not just in the form of new products or services, but also in their business model.

Many food pantries have a model that seeks to buy as much cheap food as possible – usually poor quality food, unfortunately – to then distribute to the people who access their services. This is likely meant to maximize limited charitable dollars and serve more people. But this food acquisition and distribution model doesn’t address the root causes of poverty and other factors that drive people to use pantries in the first place. To serve the whole person for the long term, enterprising food pantries would need to innovate on that model or form close partnerships with other organizations that help address those peoples’ and their communities’ underlying issues.
 
On our podcast this week, Michael McCormick, the Executive Director of the Livingston Food Resource Center, talks about how he began his tenure with a study of that food pantry’s customers and how it led him to start transforming that organization’s model. This data helped him and other staff and volunteers understand that many of the people there were struggling with unemployment or underemployment, often due to a lack of marketable job skills, as well as serious health issues like diabetes.

Based on this data, Michael decided that the pantry would include both healthier food (much of it procured from local farmers) and access to job training focused on needed culinary skills. Adding value-added processing capacity and culinary job training were essential to making the local sourcing model work and required acquiring new assets to add an adequate commercial kitchen space at the new facility. This then necessitated a successful capital campaign with designated funds for specific programs. And, the new space allows for kitchen rental, value-added processing, community room rental and catering to provide ongoing earned income for their operations moving forward.

The Livingston Food Resource Center re-imagined itself as a provider of multiple opportunities and services, rather than simply a food pantry. This re-imagining changed their business model to better serve their customers, driving local economic development through purchasing local food and growing earned revenue that supports a multitude of programs to meet their customers’ needs. We encourage all food entrepreneurs and social innovators to look deeply at their business model to see opportunities to innovate and grow their impact.


And now, our roundup of the best food and beverage finance news, events and resources from around the web…

Consultant With Tablet

Business Model Insights

Raising CapitalRaising Capital

National Wholesale Brands

CPG/National Brands

Grocery Store Produce Section

Market Trends

Regenerative AgricultureFarming and AgTech

Mergers And AcquisitionsDeals/M&A

  • 2018 U.S. Food & Beverage Startup Investment Report (Food Tech Connect) – “The year saw $1.45 billion invested across 200 disclosed deals, according to our research. In total, there were 247 reported financings in 2018. The largest check size of the year was for $114 million to Impossible Foods, with a median check size of $2.4 million (up from $3.9 million in 2017) and average check size of $7.3 million (up from $8.9 million in 2017). Despite a slight decline from 65 deals in 2017, M&A remained strong with 59 branded food and beverage deals closed in 2018.”
  • June 2019 NCN News (Nutrition Capital Network)
  • Personalized profits: Big money moves into personalized nutrition (New Hope Media)

EventsIndustry Events

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