Community Co-Pack is turning to, well, the community to help the newly launched food and beverage resource deliver on its mission. It’s doing so by selling small business bonds.
The company, which operates out of The Redd on Salmon, was founded by food entrepreneurs and consultants Hannah Kullberg and Chris Bailey. The startup launched in November 2021 and is designed to be a low-barrier and flexible contract manufacturer for food and beverage startups.
The duo are focused on supporting women and Black, Indigenous and people of color founders.
Community Co-Pack has launched a campaign on the SMBX platform to sell bonds with a 7.5% interest rate and 60 month term. The startup is the latest local business to turn to this platform. Better Bean, The cookie Department and Culmination Brewing have also raised money this way.
Community Co-Pack has a minimum raise set at $50,000 and a maximum of $200,000. It intends to use the proceeds to buy equipment, for working capital and to hire more staff. It currently employs five and has already worked with 10 food and beverage makers to produce product. Last year, the group had revenue of $443,372, according to the prospectus.
“Chris and I both come out of the business advising ecosystem. Chris at the Portland Mercado and me with Getting Your Recipe to Market,” said Kullberg. “We didn’t set out to be co-packers. We set out to solve problems for our ecosystem and solve problems for our community.”
Additionally, 150 businesses have filled out the group's interest form, where the duo help guide founders to the right resources or see if they can work with Community Co-Pack.
The problem Community Co-Pack is trying to solve
The problem they saw over and over again was a gap in both education and in physical capacity within the existing co-packing market. Some founders were trying to make the jump to co-packing too early and the costs were too much for the businesses, they said. On the flip side, the existing co-packers are at max capacity.
“We’re a bridge packer for the companies we work with,” said Bailey, meaning they hope to fill in the gap between a founder manufacturing themselves in a kitchen and working with a higher volume manufacturer. “We are really trying to support the entrepreneurs in building capacity and building capacity in the infrastructure ecosystem, so (founders) can focus on the other aspects of business like sales and development,” said Bailey.
According to the Oregon Department of Agriculture food and beverage resource site there are 111 co-packers in the Pacific Northwest.
Their goal is also to ensure that cultural sensitivity around recipes and processes can be maintained, which can be difficult to attain working with traditional co-packers that work with higher volumes and more clients. Both Bailey and Kullberg have run into specialty issues surrounding their own products.
Kullberg said the company she helped co-found, Better Bean, ultimately built its own manufacturing facility after searching for two years for a contractor that could make the product in the way they wanted it made. Bailey has been able to find a co-packer, but he has specialty needs as a vegan food producer.
Why community funding?
The company does have a line of credit with Craft3, said Kullberg. By turning to small business bonds the duo hope to further create the aspect of community surrounding the endeavor.
Kullberg said small business bonds fit with the group’s community mission. She added that she has experience with what happens when community is removed as was the case when she and her dad, who co-founded Better Bean, opted to sell the business to a larger producer. Keith Kullberg has since bought the business back and himself turned to SMBX earlier this summer to help raise money for a revamped and local Better Bean.
“There is a lot of capital that is required to run a food business. Our approach for Community Co-Pack from the beginning is this community philosophy,” she said. “Community funding resonates. We’re going to the food business community and asking them to invest (in the ecosystem).”
