Hollymead Capital Partners wants to tackle big issues
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There are lots of farmers in Western Pennsylvania producing food and plenty of stores and restaurants that sell food. But, despite progress in recent years, the communication lines between the two are often awkward, slow or non-existent.
Since many farmers are not anywhere near a computer most of the day -- but do carry cellphones -- would a system work in which a restaurateur could send a text to farmers on a network requesting, say, 10 cases of heirloom tomatoes, with only those interested responding?
Might work, might not. But it's the kind of idea that appeals to Joe Bute and his partners at Hollymead Capital Partners, an organization created in 2011 with the goal of helping create sustainable enterprises in low- and moderate-income communities.
So far, Hollymead's most significant effort has been a business development project done with the Fayette County Community Action Agency, helping to convert a former grocery warehouse into a place that could take food from local farms and turn it into products for sale in stores or restaurants.
Hollymead's business plan for that project noted that local growers produce more than $500 million worth of crops annually, but potentially could sell as much as $300 million more by reducing waste and spoilage. One issue is that there's no processing center to turn slightly imperfect produce into salsa, applesauce and other products that don't require flawless specimens.
Mr. Bute isn't interested in just creating a stand-alone processing center -- he's focused on the entire regional food system.
"We spent 50 years dissassembling the local food system," as farmers became disconnected from local grocery stores and restaurants, he noted. Now the challenge is how to build a new system and that starts with asking questions like what assets already exist and what might help to get more value out of those assets, serve the community's needs while bolstering local businesses.
"You don't solve all those problems by putting together the food hub," he said.
Mr. Bute worked at nonprofits such as the North Side Civic Development Council and Steel Valley Authority before going to for-profit organizations such as Gladstone Investment Corp. that invested in small middle-market businesses. After the financial meltdown in 2008, he found himself looking for new work and trying to find a way to tap into his varied experience.
An inveterate networker, Mr. Bute got the Hollymead project -- named after an inn that his parents once had in Virginia -- going as he talked and worked with others with similar interests. Among the partners are Greg Boulos, who is also a partner in Natrona Heights organic farm Blackberry Meadows, and Rich Dieter, whose resume includes serving as executive director of the Southwestern Pennsylvania Community Development Corp.
Mr. Bute, who works on Hollymead projects from his Pine office, has added a job with FNB Capital Corp.
Hollymead hasn't raised capital to invest in projects, although that could come in a year or so, he said. For now, the goal is to develop a system of approaching social enterprise issues and establish a track record.
In the past few months, the partners have been talking with Goodwill of Southwestern Pennsylvania about ideas for putting different populations to work. An inventory of the nonprofit's assets -- ranging from its stores to housing units to personnel -- began a few weeks ago.
It's too early to know what might develop, but David Tobiczyk, Goodwill's vice president of marketing and development, said the agency is excited to get Hollymead's perspective. "They bring a lot of experience and very interesting ideas to the table," he said.
All those years spent investing in small businesses and working to help them grow keeps Mr. Bute focused on the bottom line. But he's just as convinced that any project has to be tied to an organization's core mission, rather in the way that Goodwill's retail stores work as a business as well as fit the group's stated goal of helping people improve their lives through work and related service.
Any proposals that don't serve both goals won't last, in his opinion.
And one-off projects aren't as strong as building entire systems, which is one reason that Hollymead got involved with a Chatham University graduate student's project in which she created a regional asset map of the food system, tracking down everything from dairy producers to contract packers and meat processors. It's available online at http://regionaldb.hollymeadcapital.com/. (If the map shows no food assets, click on the plus symbol in the top right corner.)
Those watching Jeralyn Beach do her presentation for her master's degree in food studies were surprised by how many food industry businesses she tracked down in the region, recalled Mr. Bute.
Now Hollymead, he said, is talking with Oakland-based technology accelerator The Idea Foundry to come up with more ideas for commercializing those food assets.
First Published July 13, 2012 12:07 am