Investing in our Food System Through an Equity and Social Justice Lens
At Candide Group, we support families, foundations, athletes and influencers who want their money working for justice. The investments we support in turn seek to promote social justice and equity, and help re-define who wins and who loses in our economy. We do this across sectors and geographies, knowing many issues are deeply intersectional. And no issue is more intersectional than food.
When it comes to investing in companies that are working to fix our food systems, it took us quite a while to find exactly what we were looking for. By and large, much of the innovation and entrepreneurship in the food space was primarily focused on launching a new generation of better-for-us and better-for-the-planet food products. These were often natural, organic, healthy, non-GMO versions of the calorie-, sugar- and corn syrup-filled products that line the shelves of grocery stores across the US.
The blindspot we often found with these products was that by focusing just on better and cleaner ingredients, enterprises were often creating solutions for more affluent communities and failing to create more inclusive ones. We also found that these businesses were generally less likely to focus on re-imagining how food workers and how growers participate in our food systems. In short — they focused very narrowly on consumer health as a privilege, without addressing the collective harm often caused in the process of creating healthy food for just a few.
I’m excited to say that, judging by our recent investment activity, this blindspot is now being challenged in a major way. Over the last year, we have invested on behalf of our clients in companies that are shining examples of how our food industry can be redesigned to create wealth for historically disadvantaged (and often POC) workers/suppliers, as well as to serve healthy and nutritious food to lower income (often POC) communities. We’re excited to tell you about them:
Firebrand Artisans
Firebrand is a mission-based bakery that makes the finest wood fired breads and pastries, which it distributes wholesale through grocery stores, hotels, restaurants, cafes and more. Firebrand increasingly employs community members who are formerly incarcerated and/or homeless, creating a visionary and intentional organization that will include those employees in true governance and shared value creation.
Matt Kreutz started this Bay Area-cherished business back in 2008 (ironically, in the midst of the last economic depression!), and over the years, has attracted a marquee list of customers including Whole Foods, Four Seasons, Google, Blue Bottle Coffee and Ritz Carlton. Firebrand operates out of a small location in Oakland and is bursting at the seams as it tries to serve the long waitlist of customers it has. Later this year, Firebrand is launching its first packaged, sliced bread products, a business line that is expected to very meaningfully increase its sales volumes. Firebrand is now moving into a large new production facility in Alameda, CA in order to scale and meet the growing demand for its products.
Firebrand needed some growth capital to support this growth. In talking to Matt, it became clear that the investment would have to be unconventional in a couple of meaningful ways:
- It would have to enable Firebrand to pursue its mission indefinitely, without the need or expectation that the company would have to be sold.
- It would have to ensure that workers meaningfully participate in the financial and social value created by the business.
At Candide, we believe that the ability to build businesses that don’t need to be ‘sold’ and that meaningfully share value with workers is absolutely core to building a more just and equitable society. And thanks to the flexibility of clients like the Libra Foundation, we are able to work outside of the box of conventional Private Equity or Venture Capital terms, and co-create structures that enable this. We worked with trusted partners from ICA Fund Good Jobs (our co-lead investors) and Purpose (an organization promoting the concept of steward-owned businesses that are ‘not for sale’) and came up with an investment structure where:
- Investors get their payout through a profit-share model, so that there is no expectation for a sale of the business.
- Workers participate alongside investors in these profit distributions (and once investors receive their initial ‘preferred return’, the vast majority of profits will go to workers).
- The largest shareholder will be a Perpetual Purpose Trust, which will protect and ensure the company’s independence and mission focus. The trust will be overseen by a board made up of Matt, employees, and community leaders.
We are thrilled to see Firebrand grow to become a nationally recognized brand, and become a model for shared governance and broad-based economic participation.
Everytable
In recent years there’s been a wave of healthy fast casual chains popping up in major cities across the US. Sweetgreen, Chop’t, Mixt, Freshii, Tender Greens, Urban Remedy are just a small sample of these new chains offering healthier options to health-conscious (and often younger) consumers. Unfortunately, these healthy alternatives are not able to compete directly with unhealthy fast food options in terms of price (~$14 salads) or location (primarily restricted to central business districts).
Enter Everytable: a restaurant chain with healthy food priced depending on the community’s income level. Sam Polk launched Everytable in his native Los Angeles — where he helped his mother run homeless medical clinics in Skid Row and bore witness to food inequalities — with the goal of offering delicious, healthy, grab-and-go meals, priced affordably at $5–7/meal in LMI neighborhoods. Everytable does this by making all of their meals in a central location and then distributing the meals across a diversity of effective channels — brick and mortar, smart fridges, foodservice and home deliveries. With this model, they are able to reach communities in locations that are (way) out of scope for the chains mentioned above — including college campuses, hospitals, ‘healthy-food deserts’ in South LA and more.
A year ago (or what now seems like a lifetime ago!), Candide recommended an investment in Everytable to its clients. In the months leading up to the pandemic, Everytable’s locations in places like Compton and Cal State LA continued to thrive. Then the pandemic hit, and business at Everytable stores (and smart fridges) took a nosedive. Faced with this new reality, Everytable made a rapid and very successful pivot, securing contracts to provide healthy and affordable meals to food insecure students and seniors who were trapped in their homes, and to homeless folk who have been relocated into hotels by the City of LA. The result: Everytable went from serving 30k to 180k meals to the community weekly.
While we are excited about Everytable’s new business serving institutional clients, we are equally excited knowing that Everytable will continue to serve communities that lack healthy food options with its small-format retail locations, in accordance with future public health recommendations. In doing this, Everytable will be launching a franchise program where it will specifically work with lower-income franchisees of color, and will be able to provide training and startup capital to these franchisees so that they will not be required to fund upfront costs out of pocket.
Tanka Bar (Native American Natural Foods)
On-the-go, protein-packed meat bars and jerky have been trending in recent years. But quite a bit before the trend exploded, Native American Natural Foods (NANF) launched Tanka Bar, the first commercial bison meat and fruit bar, based on a traditional Lakota recipe called ‘wasna.’ The company was launched by Mark Tilsen and Karlene Hunter, two social entrepreneurs on Pine Ridge Reservation in South Dakota. Their aim was to create livelihoods for native ranchers (where unemployment on the reservation is around 70%!), and to bring bison herds back to the prairie (with profound climate as well as cultural implications).
To say that a Native-led team based in South Dakota didn’t exactly have an easy path to raising capital would be an understatement. Over the years, NANF’s business was severely undercapitalized, leading to frequent out-of-stocks and virtually no investments in branding and marketing. As new well-capitalized meat snack brands — widely critiqued as copy-cats — came on the market, NANF gradually became sidelined to the point of coming to the brink of extinction.
Fortunately though, giving up was simply not an option for the NANF team. Under the new leadership of Dawn Sherman (a Native woman who has been with the company for nine years), they began to execute a turnaround. They closed on a strategic partnership with Niman Ranch (covering supply chain management as well as sales, PR and marketing), brought on their primary bison supplier as a strategic investor, and surrounded themselves with an impressive group of advisors and board members. They then came to us at Candide to help provide the final missing piece of the puzzle: an equity investment.
Like Firebrand, NANF was decidedly opposed to the idea of building the business to sell it. NANF’s goal is to create wealth for native owners, workers and ranchers, and it believes that goal can only be fulfilled if NANF stays in Native hands over the long term. To achieve that we structured our investment with a redemption right (‘put option’), whereby investors could sell the shares back to the company or to a third-party buyer for a fair market value in the future. Investors and management are all committed to try and find a Native buyer for our shares (either the company, a Tribal entity, or the rancher co-op supplying Tankas’ bison).
We’re honored to be a partner to NANF’s work, and encourage others to follow their journey in using decolonized wisdom for regenerative growth.
Cornbread
Cornbread is a fast-casual “farm to soul” restaurant chain that builds community over healthy soul food, and provides great jobs to formerly incarcerated people. It was co-founded by Adenah Bayoh, who came to the US from Liberia as a refugee and established herself as a successful real estate developer and IHOP franchisee. She quickly found that her inventive soul food dishes were selling — pun intended — like hotcakes, and decided to branch out with her own restaurant. She then partnered with co-founder Elzadie “Zadie” Smith to raise the $5m in startup capital to expand the Cornbread brand to multiple locations since 2017. These include both stand-alone restaurants and locations within Walmart stores to provide healthier, and Black-owned, meal alternatives to shoppers.
From the beginning, Adenah has emphasized community impact in all areas of her operations. The majority of her team members in New Jersey are formerly incarcerated, and in particular, are often living in transitional housing such that Cornbread is their first job and first reentry point to society. She sources from local farms as much as possible, and has hosted numerous community events (when it was safe to do so) such as poetry and music nights.
As a company poised for scale, they pursued a traditional equity model of investment with a Black-led round, with partners Trident and New Voices Fund. Trident, founded by Eric Taylor, is a private equity firm focused on investing and growing US-based small businesses both on a one-off basis and as a fund, and helped us bring our client the Libra Foundation into that investor community. New Voices Fund is a $100 million fund started by entrepreneur and social impact investor Richelieu Dennis and focuses specifically on funding purpose-driven businesses owned by women of color and closing the funding and access gaps in traditional venture capital. Candide is excited to continue witnessing Cornbread’s success in the employment of returning citizens, the expansion of franchise opportunities, and the concrete creation of Black wealth — all while, of course, serving up delicious bites to the people.
Thanks to Jasmine Rashid and Morgan Simon for their contributions to this piece. Full disclosures related to this work can be found below. This post does not constitute investment, tax, or legal advice, and the author is not responsible for any actions taken based on the information provided herein.
Disclosure
The information contained in this document is intended for educational and information purposes only and should not be considered investment tax or legal advice or a recommendation to buy or sell any particular security. Please consult with your tax and legal advisors regarding your particular circumstances.
Certain statements contained herein may constitute projections, forecasts, and other forward-looking statements, which do not reflect actual results and are based primarily upon a hypothetical set of assumptions applied to certain historical financial information. Certain information has been provided by third-party sources, and, although believed to be reliable, it has not been independently verified, and its accuracy or completeness cannot be guaranteed.
Any opinions, projections, forecasts, and forward-looking statements presented herein are valid as of the date of this document and are subject to change.
The investment discussed herein have been included based on the following methodology: we believe the named companies have business models that exemplify food justice — or access to healthy, affordable food for communities who have historically faced structural barriers to such access. For a complete list of all investments, please click here.
The views and opinions are those of the author as of the date of publication and are subject to change at any time. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Candide Group is under no obligation to update this information after the date of this publication.
Past performance is not indicative of future results; no representation is being made that any investment will or is likely to achieve profits or losses like those achieved in the past, or that significant losses will be avoided. An investor should consider the investment objectives, risks, charges and expenses of any financial product carefully before investing. Investing involves various risks, including loss of principal. Charts and graphs provided herein are for illustrative purposes only. For more information about Candide, please see our Form ADV, Part 2A.
