International and Beyond
Prior to SBA assistance, Farm Fresh Produce Inc. brokered produce from various vendors and resold prepackaged products to customers. Purchasing produce from vendors made it difficult to manage and ensure the quality of the product sold to customers. In addition, prepackaged produce was sold with the vendor branding which restricted Farm Fresh Produce Inc.’s ability to advance their own brand. If Farm Fresh Produce Inc. was to gain market share, they would need to enhance the company’s name recognition and develop a reputation of quality with their brand. Purchasing from vendors also disrupted distribution. If vendors did not fulfill orders on-time, Farm Fresh Produce Inc. would not be able to meet contractual deadlines to customers. Vendor packaging is standardized; therefore, Farm Fresh Produce Inc. did not have the flexibility to meet specific customer quantity needs. Furthermore, the types of produce and curing variations available through vendors were limited. These limitations hindered expansion into the “process market,” where produce is used in non-traditional ways. Moreover, Farm Fresh Produce Inc. identified tremendous opportunity in international markets. However, exporting presented challenges, including: identifying viable markets, developing logistical routes, understanding exporting economics, and financing international expansion.
Farm Fresh Produce Inc. began working with Self-Help Ventures Fund to obtain a SBA Guaranty for a 504 Loan in 2016. Through this relationship and SBA’s Loan Guaranty Program, Farm Fresh Produce Inc. received a SBA 504 Expansion Loan of $1.7 million to acquire land and a facility. In 2016, the company renovated and converted a 20,000 square-foot building into packing facilities and constructed a curing barn on its 44-acre site. The renovated facility provided temperature-controlled space for the curing process and storage space to house the cured produce prior to shipping. (Cured and properly stored, sweet potatoes’ shelf-life increases from one month to one year.) To increase sales volume, Farm Fresh Produce Inc. also pursued and received an Export Express Loan to execute their plan to enter and capture international market share. In July of 2016, Farm Fresh Produce Inc. received a $500,000 SBA Guaranteed Export Express Loan.
Farm Fresh Produce officially opened that 62,400-square-foot facility at the end of 2016. The new facilities allowed Farm Fresh Produce Inc. to broaden its business model by adding the ability to cure, pack, and warehouse product, giving management greater control over quality, strengthen customer relationships, and enhance revenue. With the ability to control packing and product quality, Farm Fresh Produce Inc. now packages their product under their own brand. The packing facility gives Farm Fresh Produce Inc. control over produce sorting (discretion over which produce is included in the product package), which allows the company to ensure their packaged product is of the highest quality produce. The company now has 80 employees and operates two sweet potato curing, packing and storage facilities. The packing and curing facility provided a market opportunity for the company to profitably utilize potatoes larger or smaller than the required size range for retail sale (10-22 oz.). As a result, Farm Fresh Produce Inc. has established a relationship with primary French fry suppliers with significant European outlet density. Entry into foreign markets, bolstered by the Express Loan, Farm Fresh Produce Inc. has seen significant increase in international demand for their products. Farm Fresh Produce had $23 million in sales last year, with approximately 95 percent of those sales being in sweet potatoes.