CEI tackles shortage of food production facilities
Courtesy / Coastal Enterprises Inc.
Speaking at CEI’s latest Tastemakers Initiative event were, from left, CEI Chief Investment Officer John Egan, Director of Preconstruction Services for Wright-Ryan Cordelia Pitman, Shipyard Brewing founder Fred Forsley, Developers Collaborative principal Kevin Bunker, Senior Vice President/Food Systems Strategies at CEI Gray Harris.
Many food and beverage companies in Maine develop a new product, land a few wholesale accounts and prepare for growth — but can’t find or afford larger space to expand production.
Coastal Enterprises Inc. convened a group of stakeholders Aug. 6 to discuss the “next facility” problem.
The discussion, called the “NextFacility Project,” centered on the development of infrastructure needed to grow Maine’s food economy. NextFacility is a platform to help local economic development and real estate professionals capture this opportunity by leveraging investment in food and beverage manufacturing facilities.
The event brought together developers, food entrepreneurs, investors and economic development professionals. A panel conversation tackled topics such as capital formation, team structure, development processes and the use of local and federal tax incentives.
Presenters included Kevin Bunker, founding principal of Developers Collaborative; John Egan, chief investment officer of CEI; Cordelia Pitman, director of pre-construction services of Wright-Ryan Construction; and Fred Forsley, co-founder and president of Shipyard Brewing. Sam Spencer and Charlie Spies from CEI explained how Opportunity Zones can catalyze private investment into development projects. “Hot spot” GIS maps of potential facility development opportunities were presented for Auburn, Biddeford, Lewiston, Saco and Waterville-Fairfield.
Maine’s unique niche
NextFacility was part of CEI’s Tastemakers Initiative, which is now in its second year.
In collaboration with the Kennebec Valley Council of Governments and sponsored by FocusMaine, Tastemakers is creating a platform to help local economic development and real estate professionals target and leverage investment in food and beverage manufacturing capacity, according to a news release.
“The idea is that successful Maine companies typically carve out a niche with unique products that capture the consumer imagination and grow market share,” CEI’s director of sustainable agriculture and food systems, Brett Richardson, told Mainebiz.
But it’s difficult for Maine to compete on a commodity scale with other regions of the nation and the world that have greater production capacities and efficiencies, he said.
The “tastemakers” idea he said, builds on some assets of Maine's food and beverage industry: local traceability and the stories of individual producers.
The initiative’s target audience is mid-stage companies generating $500,000 or more in revenue, he said.
The initiative’s first year, in 2018, primarily focused on value chain development for Maine’s premium grain industry. The focus responded to the expansion of Maine grain companies to meet growing demand from artisanal bakeries, the craft beer industry and consumers.
CEI partnered with industry associations and identified opportunities to help grow the grain industry, he said. Last year’s events included tours of grain farms and grain-based food producers as well as aquaculture enterprises along the Damariscotta River.
A common refrain at that time was the need for central facilities such as warehouses, cold storage and distribution centers.
Food and beverage facilities have unique attributes, Richardson said, and the need for space is acute.
“What makes food processing particularly challenging is the food safety requirements and the extra infrastructure, like floor drains, washable walls and three-phase power, that isn’t present in every existing facility now,” he said. “Getting that early understanding before projects are developed is key.”
Attract investors
CEI has been involved in food and beverage companies and natural resources-based economies for 40 years, Richardson noted.
“In the last seven or eight years, the work has accelerated, from an investment standpoint, from the business advising standpoint and also from the workforce development standpoint,” he said.
CEI seeks to support entrepreneurs in Maine’s food economy and coordinate investor opportunities, he said. In recent years, CEI has invested almost $20 million into Maine’s food economy. That investment has leveraged an additional $60 million from other investors.
The Tastemakers Initiative emerged from those activities, Richardson said.
The initiative’s components include coordinating technical assistance for entrepreneurs who are growing their companies. The assistance can take a number of forms to tackle challenges such as workforce attraction/retention and creating operational efficiencies, he explained.
The NextFacilities Project was designed to dovetail with the efficiency piece.
“After companies max out their existing footprint and equipment through efficiencies, they often need new space,” Richardson said. “But finding well-suited, affordable space that has the design elements you need to create a food-safe, efficient, clean production environment is lacking in Maine.”
CEI is now planning the initiative’s roll out for 2020, with events still in development, he added.
Matchmaking
“There’s strong interest to continue the conversation and to translate the learning and consensus around the need for action into a tangible project,” Richardson said. “We’re looking to create a process where some matchmaking can happen at the local level. We’re in the process now of identifying interested companies at a detailed level. Timing is critical and folks are in various stages of need, whether that’s for investment or for facilities.
"A lot of early-stage companies have challenges that flow more or less in a circle. You have to comprehensively address workforce, capital, infrastructure and product development almost at the same time.”
Also as part of this year’s Tastemakers Initiative, CEI brought food and beverage producers to the Boston Public Market, June 7, for tastings and demonstrations. Participants were American Unagi, Atlantic Sea Farms, Blue Ox Malthouse, Maine Cap n’ Stem Mushroom Co., Commonwealth Poultry Co., Crooked Face Creamery, Glidden Point Oysters, Heiwa Tofu, Maine Crisp Co., Maine Grains, Mousam Valley Mushrooms, North Spore and Thirty Acre Farm.
“That event was a great opportunity expose folks outside of Maine to the great momentum in Maine for product development,” said Richardson.
Results from the event included introductions to Boston investors, he added.
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