Organic Vegetable Company Growing Greener
Copyright © 2012 Albuquerque Journal
Preferred Produce is rolling in the green with a new, $1.25 million debt-equity investment, a three-fold leap in revenue this year, and expansion plans for its organic vegetable operation.
The business, launched in Deming in 2010, closed in November on a $1.25 million commitment from New Mexico Mezzanine Partners in Albuquerque, which provides growth capital for local businesses. That gives state taxpayers a piece of the action, because the $6.25 million Mezzanine Fund includes $3 million from the state’s Small Business Investment Corp.
“We’re putting our capital to work exactly as it’s meant to be: Growth capital with positive results within a year,” said Mezzanine Partners general partner Mike Doolittle.
The company expects to make about $600,000 in revenue in 2012, its first full year of operating a one-acre commercial organic greenhouse that began producing vegetables in summer 2011. The company earned $200,000 last year.
Preferred Produce expects to generate $1.2 million in sales next year, since its second, one-acre greenhouse will begin operating in January, said founder and co-owner Matthew Stong.
“The second greenhouse will double our revenue and significantly increase our profits, because some of our fixed costs will remain the same,” Stong said.
His certified-organic operation distinguishes itself by guaranteeing delivery of vegetables to wholesalers, retailers and consumers within a maximum of 48 hours of picking, and usually within eight to 12 hours.
The company sells to Whole Foods Markets throughout New Mexico, farmers markets in the south, and directly to customers through “consumer supported agriculture” in Deming. The CSA model delivers boxes of produce directly to people’s homes and to designated sites. Stong expects to expand sales next year.
“There are many opportunities for Preferred Produce to replicate its business model in other places,” said John Chavez, president of the New Mexico Angels investment group. The Angels and New Mexico Community Capital provided $200,000 to Preferred Produce last May. The Angels are also Mezzanine Fund investors.
— This article appeared on page B1 of the Albuquerque Journal