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Final presentation rock creek farm v2


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  • 1. Iroquois Valley FarmsUIC MBAPA 590 Social EntrepreneursLeading ChangeTeam Challenge
  • 2. Local and Sustainable Food Movement• Sustainable foods are raised locally by family farmers who promote the health of their animals, land and local communities. ▫ Minimizes the energy used in the production of the food, its transport and storage ▫ Foods come from farming systems that minimize harm to the environment ▫ Clean, fresh food is a good supplement to a well- balanced diet and encourages a healthy lifestyle• The U.S. Department of Agriculture estimates the local food industrys annual revenue at $4.8 billion•.
  • 3. Organic Food Industry• Organic Foods: ▫ Are grown or raised by a producer who uses practices in balance with the natural environment ▫ Are produced on land that is free of known and perceived toxic and persistent chemical pesticides and fertilizers ▫ Are planted on a rotating basis from field to field, rather than growing the same crop in the same place year after year ▫ In the case of animals, are not given hormones or antibiotics, are fed organic feed, and allowed the space and freedom to behave naturally
  • 4. Organic Food Industry• Consumer demand for organic agricultural products has risen in the U.S. 20% or more annually.• Organic farming operations in corn and soybeans use 30% less energy than conventional farms and conserve more water in the soil, induce less erosion, maintain soil quality and conserve more natural resources.• The grass-fed meat industry accounts for an estimated 3% of total beef consumption in the U.S., expanding at 20% annually.
  • 5. Iroquois Valley Farms as SocialEnterprise• In every deliberation one must consider the impact of the seventh generation – Great Law of the Iroquois ▫ Impacting sustainable agriculture and the family farmer ▫ Creating multi-generational solutions for sustainable farm ownership ventures ▫ Providing alternative investments that are secured by the soils that feed us• Financials (as of 8.31.12) ▫ Assets: $6,500,000 ▫ Equity Capital: $4,200,000
  • 6. Marketing Restrictions - Private FundsPrivate funds seeking to avoid registration of their securitiesunder the 1933 Act in reliance on the Regulation D safeharbor must not sell fund securities by any form of generalsolicitation or general advertising.A communication will be deemed a general solicitation orgeneral advertisement unless it is directed only to personswith whom the issuer or its agents have a pre-existingrelationship. This relationship must be sufficientlysubstantive to provide a reasonable basis for determining thatthe person targeted by the communication is an accreditedinvestor and has the financial experience and sophisticationneeded to evaluate the risks of an investment in the issuer’ssecurities.
  • 7. The Challenge• Redevelop homestead property to promote Iroquois Valley Farms and engage potential investors• Develop market for natural-fed beef and organic pork in Chicago metro area• Build brand equity for Rock Creek Farm and Iroquois Valley Farms
  • 8. Hedgehog Concept• Huge flow of capital to promote certified organic and sustainable farming• Unique opportunity for investors• High level of investor engagement - meat delivered to their homes and access to farm experience• ROI
  • 9. Working Farm Operations• 76 acres of tillable land, leased to local farmer ▫ Corn, soy beans, wheat and edible beans ▫ Rotate ¼ plot each year ▫ First organic crop will be in Summer 2015• Continue current distribution operations, including combining with existing farm: ▫ South Suburban Co-op ▫ Irv and Shelley’s Fresh Picks ▫ Kankakee Farmer’s Market• Rent set at $250/acre = $19,000
  • 10. Natural-Fed Beef and Organic Pork• Renovate barn and outlying structures• Beef cattle will pasture on required 25ft organic land buffer• Diversify livestock by including hogs ▫ Animals have similar needs; can use capital investments wisely
  • 11. Barn will be updated to raise livestock; also offers opportunity for Iroquois Valley Farms brandingFarm Initial InvestmentProperty renovations $ 18,000.00Livestock Beef Cattle (6) $ 4,800.00 Hogs (6) $ 3,000.00Freezer(8x10 walk-in) $ 9,000.00Total Investment $ 34,800.00
  • 12. Community Supported Agriculture• Form a meat-only CSA ▫ Members pay up front for 3 or 6 month memberships ▫ Receive a shipment of meat either monthly or bi-monthly ▫ Pick up at pre-determined locations, usually farmer’s markets• Offer priority membership to IVF investors• Distribution of cuts that are not typically purchased in typical retail settings• Pre-payment of goods allows for better management of financials• Creates brand equity in Chicago and local community
  • 13. CSA Financial EstimationsCSA (based on Mint Creek pricing)Pounds of meat per cattle 450Pounds per member per month 10Members needed 45Cost per 6 month membership, monthly delivery $ 560.00 $9.33/Total membership income per 6 months $ 25,200.00 poundTotal membership income per month $ 4,200.00 Meat incomeProduct Retail Price per # # per animal per animalBeef $7.80 450 $3,510.00
  • 14. Farmhouse Restoration• Historically accurate and energy efficient (“green”)• Adaptable utility• Chef’s showcase• Both investor cultivation and stewardship• Meeting place and connection location for members and staff• Exhibition center for local and organic agriculture (where local and organic come together)• Rural farm office -- CSA business site• Rentable for neighbors & visitors• Showpiece kitchen for cooking demonstrations & entertaining• Member fundraising and other special events
  • 15. Western exposure—back porch
  • 16. Suggested floor plan of first floor with expanded kitchen
  • 17. Renewable Energy BudgetGeothermal heatSolar panels—grid-tiedpowerHigh energy-efficientreplacement windows anddoorsTotal added costs: $38,7005-year ROI
  • 18. Brand Image: Community EngagementRural IVF Identity Urban IVF Identity• Community Partner • Unique and lucrative investment• Good neighbor opportunity• Showcase property • Business partner with high-end local restaurants• Local landlord • Collaborator with organizations• Connection to local history fighting food deserts• Contributor to local economy • Link for schools of culinary arts • Supplier of quality meat products • “Good corporate citizen” • Partnership with local nonprofit
  • 19. Paul Virant Chef/Owner Paul Virant is the chef and owner of Michelin-star restaurant Vie in Western Springs, Ill. and Perennial Virant in Chicago. His philosophy of local, seasonal eating stems from his childhood spent on his family’s farm in Missouri. He credits his grandmothers, both avid canners, for instilling in him a reverence for local ingredients and serving as the inspiring force behind his becoming a chef After graduating with a degree in nutrition from West Virginia Wesleyan College, he enrolled at the prestigious Culinary Institute of America (CIA) in Hyde Park, N.Y. Following culinary school, he joined March in New York where he further refined his skills under the tutelage of chefs Wayne Nish and Hilary Gregg. A move to Chicago two years later marked a turning point in his career as he worked at some of the nation’s most famed restaurants, including Charlie Trotter’s, Ambria, Everest and Blackbird.In 2004, a desire to return to his roots led to his opening of Vie in a nearby suburb of Chicago. Utilizing his methods ofcanning and preserving, Virant serves up his contemporary American cuisine with a focus on the ingredients – theirorigin, production and quality. Since opening, the restaurant has garnered regional and national attention, including a three-star review by Phil Vettel of the Chicago Tribune and a spot on Gayot’s list of Top 40 Restaurants in the U.S. In the spring of2012, Virant’s award-winning fare culminated into the release of his cookbook The Preservation Kitchen: The Craft of Makingand Cooking with Pickles, Preserves, and Aigre-doux. It is the first canning manual and cookbook authored by a Michelin-starred chef and restaurant owner and creatively combines the technical aspects of canning with a chef’s expertise on flavor.“I wanted to create an extension of my home, where people can come and enjoy good food and drink in the company of peoplethey care about. My goal is to be a small part of my guests’ enjoyment of every morsel and drop of life.” – Paul Virant.He has been featured in the Sun-Times, Time Out Chicago and was named the city’s Best New Chef by Chicago Magazine in2005. In 2007, he was named among Food & Wine’s Best New Chefs and was a 2011 James Beard Foundation nominee forBest Chef: Great Lakes. He has also appeared on NBC’s Today Show and competed on Food Network’s Iron Chef America.Prestigious awards to Chef Paul Virant include:•Best New Chef, Food and Wine Magazine•Best New Chef, Chicago Magazine•Jean Banchet Rising Star Chef•Rising Star Chef, Restaurant Hospitality Magazine•Rising Star Chef,
  • 20. “Sustainable and local food has quickly become critical to the success of Chicago restaurants. You can’t survive in this market without sourcing locally and being transparent about where the food comes from. Its good for the customers and its great for the local farms.” - Chef John Vermiglio, Graham Elliot Bistro
  • 21. Sample of restaurants in Chicagousing organic and local-sourced food• Longman and Eagle• Nellcote• Cafe Lula• Revolution Brewery• Farmhouse• Brown Trout• Perennial Virant• MK• Nightwood Cafe• Ruxbin• Vie• G.E.B.
  • 22. Loyal Potential customersinvestors in of high-end Iroquois restaurants Valley serving local Farms and organic food
  • 23. Other Possible Community Partners• Kendall College of Culinary Arts ▫ Field trip for students ▫ Retreat center for staff• Streetwise ▫ Supplier for “Neighbor Carts” providing fresh food to food deserts ▫ Venue for fundraising event• University of Illinois - New Illinois Farmer Program ▫ Natural fit for IVF ▫ Courses include: land acquisition, business planning, organic production methods, etc.• Listing with ▫ Local, sustainable organics food suppliers ▫ 25,000+ listings• Listing with ▫ Real food. Real farmers. Real community. ▫ List in directory and sell products online for delivery or pick-up.
  • 24. Regulation D prohibits general solicitations and generaladvertisements only if such communications are being made forthe purpose of offering or selling the securities • Chicago Public Radio is supported by Iroquois Valley Farms, a private equity company promoting certified organic and sustainable agriculture. Information at
  • 25. Hurdles to implementation• Specific budget not developed for farmhouse restoration• Financial projections involve lots of unknown variables (nature of the industry)• Tight constraints on advertising investment opportunities• Brand development will take lots of resources, both in time and money• CSA markets are growing competitive• Sales through farmers’ markets labor intensive• Products have a premium price point
  • 26. Hiefitz and Linksy: Leadership on theLine• Managing passionate people• Addressing deeply held values and ideas• Thinking politically
  • 27.
  • 28. Sources and Interviews• Steven Adler, account executive, WBEZ• Bob and Barb Benenson, former owners, Rock Creek Farm• Marilyn Florek, private consultant, Preservation Wayne• Constance Grizzel, president, Castle Rock Technology Inc.• Heidi Hedeker, chief pastry chef, Kendall College of Culinary Arts• Jim LoBianco, CEO, Streetwise• Andrew Lutsey, Iroquois Valley Farms• Aaron Moore, farmer, Rock Creek Farm• John Moore, farmer, Rock Creek Farm• Tom Perry, partner, Iroquois Valley Farms• John Vermiglio, sous chef, Graham Elliott Bistro1. King, P. (2010, June 10). Ordering Up Beef That Roamed The Range. Wall Street Journal