SVEDC lands funding to get New Mexico food products into stores
New Mexico Business Weekly by Megan Kamerick, NMBW Senior Reporter
Date: Friday, October 28, 2011, 4:00am MDT
The economic slump continues in New Mexico, but that hasn’t reduced people’s desire for chocolate-coated apples.
Valerie Clark was putting the finishing touches on her latest batch this week at the South Valley Economic Development Center’s commercial kitchen. She started her company, What The Fudge, in 2009, and this has been her busiest year yet. She is getting calls from more potential customers, but she is determined to grow the right way.
“I don’t want to sign on and not be able to deliver,” she said. “Eventually, I want to grow and have my own space.”
A new grant to the SVEDC is designed to help businesspeople like Clark do that. She is one of 55 entrepreneurs using the kitchen in the small business incubator, which is under the umbrella of the Rio Grande Community Development Corp.
Since it opened the kitchen in 2005, the SVEDC has helped many of these startups get their products into retail stores and other outlets around the state. With a $115,000 grant from Citi Community Development, the incubator can take those efforts to the next level.
“We’ve now got 40 stores that take our products, based on personal relationships,” said Tim Nisly, chief operating officer for the Rio Grande CDC.
The next challenge is to get consumers to buy products they aren’t familiar with, he said. Citi funds will help launch Los Mercados, a collaborative effort to create a brand under which all the businesses can market their products. The goal is to enable 120 entrepreneurs to expand into new markets and create jobs for about 80 New Mexicans.
The money builds on a $99,710 grant the incubator received in August from the U.S. Department of Agriculture Rural Development to work with rural food entrepreneurs.
The Rio Grande CDC competed for the funds nationally, said Melissa Briggs, state director for Citi Community Development. Considering Citi has no retail banking presence in New Mexico, it’s impressive for the state to get a grant like this, Briggs added. Citi has about 400 employees in Albuquerque who handle calls to and from Citi’s credit card customers.
“We thought this plan was a very innovative way they could come together and achieve more collectively than they could on their own,” Briggs said of Los Mercados. “We hope it will be very successful and could be replicated in other areas.”
Nisly said the incubator has been working with Taste the Tradition and Grown With Tradition, the brands created by the state to label New Mexico products. But SVEDC might develop its own brand. Clark said customers at the Downtown Growers’ Market respond well to her display materials that show she is based at the SVEDC.
“That brings a lot of validity to my product,” she said.
Ruben Parga left his career in the pharmaceutical industry to start The Chispa Co. at the SVEDC, making a combination salsa/cooking sauce product. He sees great potential in Los Mercados.
“If you can present a portfolio of products, it gives you better power and leverage,” he said.
Parga started his company at the SVEDC because he found incubators help increase new businesses’ chances of success. Data from the National Business Incubation Association indicates startups that go through incubators are 87 percent more likely to stay in business.
The incubator has helped producers shorten the time it takes to get their products onto shelves to about three months, Nisly said. That helps entrepreneurs with their cash flow, he said, but it creates more need for financing. As businesses scale up, they need to increase production. So SVEDC is working with SCORE, an organization of retired business owners and executives, to coach business owners, as well as ACCIÓN New Mexico • Arizona • Colorado, WESST and New Mexico Community Capital to help business owners find financing.
“I think it’s entirely practical to have 1,000 grocery stores in the next two years taking New Mexico food products,” he said.
The Rio Grande CDC is also opening a second commercial kitchen at PB&J Family Services’ new building at 209 San Pablo SE. Dina Ma’ayan, development director for PB&J, said the organization will start with five clients working to support their families. They will receive support for parenting skills and other services from PB&J, as well as a path to entrepreneurship with SVEDC. Ma’ayan said the goal is to have 30 new entrepreneurs in the incubator within three years.