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Food Bank Becomes Food Processor

June 20, 2024
Good Shepherd Food Bank of Maine established Harvesting Good, a for-profit subsidiary creating jobs and revenue by supplying frozen broccoli.

When customers at Hannaford’s Grocery stores encounter packages of Harvesting Good frozen broccoli, at first glance they probably think it’s just another brand of frozen vegetables. But when they look closely, they can tell there’s something else going on. “This Broccoli Gives Back,” the marketing copy on the package announces.

In fact, Harvesting Good is a for-profit subsidiary of Good Shepherd Food Bank of Maine. The food bank, founded in 1981, has 600 locations across the state and serves 140,000 individuals every year.

In order to continue growing that effort, the food bank launched its own for-profit frozen food company, Harvesting Good, in 2020. The company, which is a public benefit corporation, delivered its first product in 2022 and hopes to eventually be profitable enough to help support the parent organization.

Part of the strategic plan

“The whole notion of Harvesting Good started out back in 2015 when we were putting together a 10-year strategic plan that had a bold goal that, by 2025, which is just around the corner, we would have enough food to feed all of the food-insecure people in Maine,” says Matt Chin, president of the business.

Chin says strategic planning revealed that the food bank would need to procure 15 million more pounds of food to meet the needs of food-insecure people in 2025. They knew they had to be innovative to fill that gap.

While the food bank’s mission is to feed hungry people, it also aims to help its clients become self-sustaining, which translates to helping create jobs. Those dual missions were in sight during their strategy planning process and eventually led to one conclusion: The food bank should create a for-profit subsidiary that can produce enough food to turn a profit while supporting the Maine agricultural industry, which would in turn create jobs.

The organization’s financial models determined that this subsidiary – Harvesting Good – would be profitable once it created 5 million pounds of food each year.

“That is the level in which our operational efficiencies will be at their maximum to pay for all of the fixed and variable costs of the business and put us in a position to provide food for all the food-insecure folks in Maine,” says Chin, who was the vice president of supply chain for the food bank at the time.

Why broccoli?

At the moment, broccoli is Harvesting Good’s only product. The company leadership chose broccoli for several reasons.

First, Maine’s climate and soil conditions are ideal for broccoli. Second, market data revealed that broccoli florets are the most popular frozen vegetable in New England. And finally, broccoli is harvested immediately after blueberries, which means workers and equipment in Maine are available.

Chin says they hope to add more produce once they master broccoli and learn what else their customers want and that Maine farms can efficiently produce. Carrots are one option, he says, because they can be stored at room temperature for a while if processing capacity is not available.

“When we get bigger, we are hoping to have a second processor, and this might be at a facility where they are not currently doing blueberries,” he says. This would relieve the scheduling constraints tied to avoiding blueberry processing season.

Whatever agricultural products Harvesting Good eventually offers, they will have to be frozen in order to reach the scale required.

“By freezing it, we’re essentially extending the shelf life of locally grown produce from a couple of weeks to two full years,” Chin notes. “So now, instead of growing only a small amount of product for the six to eight weeks that they are in harvest, Maine farms can [grow enough] for a full 52 weeks. That’s a wonderful asset for the farm to now be able to reach a much, much bigger market.”

Ideally, the company would have partnered with a co-packer to handle the processing and packaging of the broccoli, Chin says, but none existed in New England that could handle the task. So they partnered with a blueberry processor, W.R. Allen Inc. in Orland, Maine. W.R. Allen already had the individually quick frozen (IQF) cascade freezer and the freezing expertise, but they lacked some of the other equipment needed to process broccoli.

Enter MacKenzie Scott. In 2021, the philanthropist contributed $25 million to Good Shepherd Food Bank, and leaders decided to earmark $5 million of that to help Harvesting Good invest in additional equipment. They bought floret cutters, a washer/shaker and a chiller, and built out the space to house that equipment.

The partnership with W.R. Allen helps that company diversify its revenue sources and better utilize its equipment and staff. Chin estimates that by adding broccoli processing, the seasonal employees of W.R. Allen get to work 2.5 times longer than they would if they were just processing blueberries.

Harvesting Good also partners with Circle B Farms LLC in Caribou, Maine, where the broccoli is grown.

“What we have done for the farm is that we have given them prepayments for the broccoli well ahead of delivery,” Chin says. “A farm has a horrible cash flow model where they have to pay for seed, land, labor, equipment, fertilizer, all of those costs before they can get revenue from the sale of broccoli crowns. So we have helped them with that.”

The relationships with W.R. Allen and Circle B extend beyond a normal business deal. For example, Harvesting Good requires that its partners’ employees be paid a decent living wage – after all, there would be no sense to having a partner whose employees had to get food at the food bank – and they have helped both companies apply for federal, state and private grants to further fund their operations that support Harvesting Good.

Those partnerships ultimately should lead to Harvesting Good’s second goal of creating jobs, Chin says.

“We believe that by the time we get to that 5 million-pound level, we will have created about 175 good-paying jobs so that folks have the financial wherewithal to go to the local retail store and no longer have to rely on the services of a food pantry.”

Dual markets

About 80% of Harvesting Good’s output is sold to institutional foodservice customers such as schools and food banks and the rest to Hannaford’s 187 stores in New England and upstate New York.

Eventually the retail side will expand beyond Hannaford, Chin says, but for the time being they are working solely with that retailer. Hannaford has been a partner of Good Shepherd Food Bank for decades, so the temporary exclusivity makes sense. Hannaford has not only put the Harvesting Good broccoli in its stores, but it also created a marketing team that helped the fledgling company launch its product in the Hannaford locations.

Chin says the retail price of his company’s broccoli is less than the big name brands such as Birds Eye but more than Hannaford’s private brand. His overhead is lower than that of either of those competing brands and his marketing budget is almost non-existent, but he cannot compete with the low-cost wages paid to workers harvesting broccoli in California or Mexico.

“What we are promoting as a value proposition of Harvesting Good’s product is that it’s locally produced and has a lower carbon footprint. We’re also investing in the local economy where people are buying the food. More often than not, our customers say, ‘Yes, that is of value to us, and we will pay a premium for the Harvesting Good product.’”

This equation is especially evident in institutional sales, Chin explains. He estimates that 75% of institutional buyers have internal goals that a certain percentage of their procurement dollars are spent with local vendors.

Melissa Motejunas, director of sales and marketing at Harvesting Good, previously ran procurement and strategic accounts for a produce company in Maine and worked with over 600 schools. She says those types of accounts are key to Harvesting Good’s success.

“We’re really utilizing this huge local push that we’re seeing within the community and within the region right now,” Motejunas says. “They’re getting a lot more funding, both state and federal, to procure local products.”

Chin discovered the truth of that idea when the company pursued a big account in Massachusetts. “When the Boston Public Schools issued their RFP for the academic year that is now closing, they had three requirements: It had to be frozen, it had to be local, and you had to be large enough to meet their demand,” Chin says. “Harvesting Good was the only bidder. Nobody else is doing this.”

Profitability in the future

In 2022 Harvesting Good sold about 200,000 lbs. of broccoli, and that figure jumped to just under 500,000 lbs. last year. Chin estimates they will reach 5 million lbs. – the quantity at which they expect to be profitable -- in about five years.

“We could be profitable lower than that,” he says. “A lot depends on how the retail prices change and how much we’re doing through institutions. There are a lot of variables, but 5 million has been our initial goal for profitability.”

Chin knows that the feel-good aspects of buying from Harvesting Good help sales, especially from institutions with sustainability goals, but he’s also proud of the product his company provides.

“I would put Maine-grown broccoli against broccoli grown anywhere else in the world,” he brags. “And I think most consumers would taste the difference. We believe that our frozen broccoli is tastier and healthier than fresh broccoli that travels to the East Coast from places far, far away and is being shipped in a refrigerated truck for a week or two weeks.”

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