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The Grove Salsa Co. is increasing its produce orders.
The Grove Salsa Co. is increasing its produce orders.

Local ag businesses harness state grants for growth in new markets

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If there’s a farmer’s almanac for predicting growth in Missouri’s agricultural businesses, at least a few may be looking forward to favorable conditions.

In May, 11 organizations rooted in the state’s agrarian economy received nearly $1 million in grants through the Missouri Agricultural and Small Business Development Authority. The state Department of Agriculture programs are designed to assist businesses access resources to process locally grown products for use in schools or fund feasibility, marketing and business development studies to make agricultural products more valuable as an end product.

Nine of the recipients – including two Springfield-area businesses, Chef Chadwick LLC and The Grove Salsa Co. LLC – received value-added grants for noncapital expenditures.

“It’s money we don’t actually receive,” said Sean Killingsworth, who co-owns The Grove Salsa Co. with Erik Pedersen.

Killingsworth said the company’s $60,390 award will pay invoices from third parties: Rolla-based Missouri Enterprise for conducting a technical feasibility study and Hightide Communications LLC in Springfield for producing a marketing initiative and business plan. (In the interest of full disclosure, Hightide is owned by Springfield Business Journal Publisher Jennifer Jackson.)

A third area business, Mansfield-based Idea Farm LLC, received $189,999 – the second-largest single award – from MASBDA’s farm-to-school program. Unlike the grant received by The Grove, Idea Farm’s award is geared to improve the company’s ability to process, package and store locally grown food.

Idea Farm President Omar Galal said a fourth of an 8,000-square-foot commercial kitchen – set up in part of a former hospital – would be outfitted with walk-in refrigeration, plus 15 pieces of industrial food processing equipment.

“We’re trying to build a food hub,” Galal said, noting the goal is to process 1 ton of food per hour for area school districts, and eventually scale up to include hospitals, restaurants and grocery stores. “Schools basically cook with scissors; they cut open the bag and dump out whatever the distributor brought them.”

Considering most food purchased by schools comes through wholesalers from farms in other states or countries, Galal’s idea is to serve as a go-between for local farmers and consumers.

“Big companies have the capital to buy expensive equipment,” Galal said. “Farmers have a lack of access to that capital for infrastructure. With this, they can get to a broader customer base.”


Grant process
Killingsworth said Hightide Communications helped the company write its grant application after Missouri Enterprise Business Programs Manager Jimmy Story suggested The Grove as a good fit for MASBDA funding.

Because the grants are earmarked for companies that add value to Missouri produce and boost local farm economies, Hightide Communications CEO Mar’Ellen Felin said the application demonstrated an increased demand from The Grove would mean more employees at its farm suppliers.

“The Grove is in a unique position for a MASBDA grant in that they already have a market-tested product,” Felin said. “They will create additional jobs in their company, but what the Department of Ag and MASBDA are interested in is the number of jobs for the Missouri farmer.”

For example, Killingsworth said the company’s largest weekly orders last season were 250 pounds of tomatoes from Fassnight Creek Farm. Now, The Grove is preparing to place 1,000-pound orders, which also means purchasing more onions, peppers and other ingredients.

Transplants from Las Vegas, The Grove co-owners started jarring their salsa out of a commercial kitchen at 540 W. McDaniel St. in July. Pedersen said the company seeks to add four full-time equivalency positions this year.

Letters of support also help applications stand out, according to the recipients: Harter House grocery store backed The Grove and the Wright County Industrial Development Authority recommended Idea Farm’s plan. There’s also a price to apply: Companies pay $150 to apply or $300 when requesting more than $25,000, according to the department’s website, and then representatives are invited to pitch their ideas to the MASBDA board in Jefferson City.

“You have to have solid networks, first,” Galal said after earning the ag grant on his second attempt. “Get to know the farmers and the institutions that are wanting, and then find the niche for how to provide for them and connect them with the farmers.”

Recipients are required to make a 10 percent cash match toward eligible expenses.

Next steps
With the feasibility study completed, Killingsworth said Hightide Communications is preparing for the second phase: marketing.

“They’re looking at that whole side for us – the logo, the target market and pulling the branding into place,” Killingsworth said. “For us to figure that out would take hours, and would we even be right? It’s nice to have someone else looking at it.”

Although The Grove’s award can’t be used for capital expenditure or operating funds, Killingsworth said the feasibility study provided direction for potential expansion.

Currently, a six-person crew produces either 700 or 1,400 jars per week, based on retail demand in Springfield, Branson, Marshfield and Republic, plus local farmers markets. The top-selling store is the east-side Harter House, which moves over 300-600 jars a month.

“We kept growing like that until we landed Price Cutter in February,” Killingsworth said of a 15-store deal with Pyramid Foods.

He said the feasibility study showed doubling production volumes would require $125,000 worth of new equipment.

Galal, meanwhile, hopes to have Idea Farm’s operation up and running in time for the fall semester.

He said no contracts with farmers or school districts would be signed until equipment is installed, but Idea Farm is talking with Springfield Public Schools, Missouri State University, University of Missouri extension offices and Chesterfield-based Opaa Food Management Inc. about the facility’s potential. Galal declined to discuss negotiations with suppliers, but they include several Amish families as well as individual farmers in Ava and Springfield.

“When you think about 30,000 students a day, 1 ton per hour doesn’t even cut it,” Galal said, citing the number of students fed by Springfield’s school system. “If you want to eat local, you have to grow that scale.”

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