Sowing the Seeds of an Expanded New Mexico Chile Industry
Santa Fe Ingredients to Increase Production, Jobs in Rural New Mexico
At the age of eight, Henry Rodriguez picked chile peppers in the fields of southeast Arizona with his father. Today, as a recognized authority and innovator on chile processing, he owns and operates Santa Fe Ingredients in Animas, New Mexico, selling to Fortune 500 brands like Hormel and Unilever, and outfitting leading restaurant chains such as Taco Bell.
In New Mexico, chile peppers are integral to the state’s economy, generating more than $400 million annually. However, global trade, labor challenges due to immigration rules, changing weather patterns and other factors have threatened the state’s chile industry since the late ‘90s.
Under these pressures, Santa Fe Ingredients found it increasingly difficult to expand and meet its clients’ continuous and growing demand for chile products – driven by U.S. chile consumption that has more than doubled over the past two decades.
Seeking the Resources for Increased Production
With key customer relationships and five patents to its name, including a revolutionary mechanized harvester, Santa Fe Ingredients is poised to become New Mexico’s leading chile processor. But the company’s rural location has made it challenging to secure the necessary resources for increased production.
“Being outside the mainstream areas of New Mexico, we have not had access to the resources we need to grow,” said Rodriguez, owner of Santa Fe Ingredients. “Banking communities would rather lend money where the land has more than one use, and down here it’s pretty specific to chile.”
A Roadmap for Growth
Without assistance, Santa Fe Ingredients faced an uncertain future. Focusing on under-invested areas of the state, New Mexico Community Capital (NMCC) saw significant potential in the company to lead a resurgence of the state’s chile industry and increase jobs in the region.
NMCC collaborated with Santa Fe Ingredients to find areas for expansion, and create a growth plan. Most critical were NMCC’s management assistance and connections, which helped the company bring in experienced leaders.
The organization provided a chief operating officer, who among other activities, teamed with Rodriquez in creating an in-depth, investor-grade business plan. NMCC also connected Santa Fe Ingredients with a veteran corporate CFO to help strengthen the company’s financials.
A Deeper Strategic Farming Alliance
Creating a domino effect, NMCC’s support enabled Santa Fe Ingredients to deepen its relationship with a major farming partner, Farm Management Company (FMC). Santa Fe Ingredients has processed peppers provided by FMC, one of the nation’s largest farmers, for several years.
The company’s alliance with NMCC gave FMC the confidence to take its relationship with Santa Fe Ingredients a step further. Under the new agreement, FMC will grow peppers at its various farms and deliver them 11 months of the year. Up to now, Santa Fe Ingredients has only been able to obtain and process peppers two months every year, leaving it unable to meet clients’ year-round product needs.
“Our relationship with NMCC opened the door for us to secure a farming alliance that enables us to employ people and operate our plant year-round,” Rodriguez said. “This makes us much more dependable to our customer base and will really stimulate our business. NMCC is really making it all possible.”
The agreement means Santa Fe Ingredients can consistently deliver processed chile to customers. In turn, it can considerably increase its base of full-time, trained employees in rural southwestern New Mexico – rather than just hiring and retraining people for two months every year.
‘The Difference between Success and Failure’
Beyond the strategic relationships, consulting and credibility that NMCC brings, Rodriguez perhaps values most the organization’s belief in him and his company’s potential.
“In the trade, venture capitalists have earned the name ‘vulture capitalists,’” Rodriguez said. “But NMCC is not that way. They are here to help businesses outside the mainstream and are truly trying to be of service to the community, and that’s what makes them unique.”
Without that, Rodriguez believes he would most likely have liquidated or sold the business to a larger, out- of-state company. As it is, Rodriquez is now prepared to pursue the investment capital he needs to grow the business and lead the charge of making an even bigger name for New Mexico chile.
“NMCC’s IMPACT-New Mexico business services made the difference between success and failure for our company,” he said. “They worked closely with us to identify opportunities and devise a roadmap for growth. Their management assistance and connections helped us place experienced professionals in key leadership roles. Because of their belief in us and support, we are now ready and able to turn investment capital into more jobs for New Mexicans.”