The bad news arrived right around Labor Day. Northern Girl’s customer Whole Foods, which had been buying nearly 3,000 pounds of its fresh harvest medley every week – cleaned, cubed and ready to be roasted and served up in the grocer’s tempting hot, prepared foods area – would not be placing any more orders with the Van Buren-based vegetable processor for those organic root vegetables from Aroostook County.

Given the upscale national chain’s recent financial woes (sales declines for six straight quarters has led to store closures), its decision to scale back on organic vegetables from a mid-sized Maine processor doesn’t seem surprising in retrospect. But at the peak of a harvest season, this is not the news anyone in local food wants to hear. In the case of Northern Girl, Whole Foods represented about a third of its business, just gone, out the window.

“It was a key customer,” Marada Cook said. She founded Northern Girl in 2011 with her sister Leah. Together with business partner Chris Hallweaver, they had built it into a community-minded business founded on the ideals of the local food movement. Organic food, grown in Maine (all in Aroostook County), processed by a team of 11 from the area and then distributed throughout Maine and beyond by Crown O’Maine, the distribution cooperative founded by their father, Jim Cook, in 2006.

Northern Girl never quite recovered from that, or the rest of a sales year that Cook described as “tumultuous.” In late February, the company announced that it was shutting down production and putting Northern Girl on the market. The news took many by surprise, including Van Buren’s town manager, Dan McClung.

“I am a little bit surprised that they are making this decision,” McClung said. “I didn’t think that they were at this point. Some of the conversations we had

they seemed to be very optimistic about future contracts that might come through.”

He’s disappointed. “It has been a nice business to have in town for the obvious economic development reasons with job creation. But it is also a nice business that the town was proud to be aligned with. It goes hand-in-hand with the culture of our region, and it was something that represented the town well.”

For those in local food movement, the news is disconcerting – the Cooks and Hallweaver had built something to be so proud of, and now they were shuttering it? It is enough to give an food entrepreneur pause. This group had it all, from ethics to product to a shiny new facility, leased from the city of Van Buren and built with $200,000 support from the Northern Border Regional Commission.

Moreover, they were responding to a need identified by groups like Maine Food Strategy for the kind of infrastructure within the local food economy that would add value to crops and make it possible to eat local throughout the year.

They’d worked hard to identify grants, like one from Maine Community Foundation that enabled them to buy crucial equipment to start the business. They’d courted investors, found markets like the one with Whole Foods and with 10 school districts throughout the state; the latter were regular customers for Northern Girl’s 20-pound sacks of carefully cut and washed Aroostook County grown carrots. (That includes Portland, a district well known for serving locally sourced food.) The Cooks and Hallweaver had successfully navigated the challenges of food safety inspections, earning a 99 percent on their safety audit. Investors from Slow Money Maine had made considerable investments in the business, $150,000 in its first two years alone.

In Maine’s food economy, people feel so protective of the Cook sisters’ vision that few were willing to talk about what had gone wrong, or even what might happen next.

“We don’t know yet what can come from this,” said Bonnie Rukin, coordinator for Slow Money Maine. “There is shock and sadness among some people and also understanding and compassion. We remain daunted.”

Surely she meant “undaunted?”

“No,” Rukin said, ruefully. “We’re definitely daunted.” She noted two similar blows to companies supported by Slow Money Maine, the closure of Moo Milk in 2014 and Coastal Farms & Food in Belfast, an incubator and processing kitchen that closed just a few months before MOO Milk. “We work regularly with these businesses, and there are all of these connections between them so obviously, when there is a loss, we feel it. And people as investors financially feel it. We are not celebrating. This business wasn’t necessarily ready to fail. The team decided that this was the best next step.”

HINDSIGHT

Northern Girl had a bootstrap approach to business, Marada Cook says. They thought they could recover from the Whole Food setback, but as it turned out they lacked the capital to keep the processing company going, and that problem likely went all the way back to the company’s early days, she said.

“I think if I could have, I would have raised a lot more capital upfront,” Cook said. We put in less than a million, and we probably needed $3 million.”

“Of course, as a startup with no sales, that is very hard to do,” she added. “So you tend to take incremental steps. I could have made the case for what a long on-ramp it would take to become profitable.” Instead, she said, they took a more short-term approach.

They also decided fairly early on that they’d aim to serve food service, institutions and schools and universities, rather than vying for space on a grocery shelf. (Whole Foods also bought packaged beets from Northern Girl, but they were using the products in their own food service business, preparing foods for sale in the deli area and ready-to-eat warm bar in the supermarkets. Shortly after letting Northern Girl know they wouldn’t be buying their vegetable medley anymore, Whole Foods shut down one of its food commissaries in the East, where those foods were prepared, and in February announced plans to shut down the other two this quarter as well as nine stores around the nation.

During peak times like holidays, Northern Girl sold up to 5,000 pounds of Aroostook County grown and processed vegetables to Whole Foods. But as consumers picked out roasted vegetables at that steam table, they likely connected with Whole Foods, not Northern Girl.

In retrospect, Cook said, maybe instead of backing away from a direct retail market, Northern Girl could have sought help getting into it. “I would have maybe recruited someone who had a different level of experience in consumer branding. That is a universe that is very tightly controlled and you do need – to use a North Woods term here – a guide for it.”

“To play with the big boys and squeeze big names off the shelves on the East Coast would have taken a lot more funding and acumen. So we pivoted into food service.”

FATHER’S DREAM, DAUGHTERS’ AMBITION

When Jim Cook died in 2008, he’d already begun conversations about a vegetable-processing plant with Van Buren, the town just 15 miles south along the Crown of Maine from Grand Isle, where the Cook family lived and farmed, Cook was an entrepreneur, but his entrepreneurial spirit had far more to do with building community than making money. When he died at just 59, the idea of the plant hadn’t progressed past a conversation.

“There was no business plan, no market commitment and not really a great sense of what was supposed to happen,” Marada Cook remembers.

Town officials in Van Buren were still in the process of putting together an application for grant money to fund the building. In 2011, she and Leah wrote a business plan, and while plans for the facility in Van Buren were underway, they set up shop in a temporary space in the commissary at the former Loring Air Force Base in Limestone, 27 miles away. They had about 1,800 square feet and some of the infrastructure that remained from the military – stoves, a functioning dishwasher, and some extraneous items.

“We literally had to move all the silverware out of the kitchen to put our stuff in there,” Cook said.

It was a “very funky space,” but they spiffed it up and set to work processing. That grant from the Finance Authority of Maine enabled them to start making carrot sticks for school children. In the early days of the company, Northern Girl specialized in processing seconds. But as time went on, they shifted to No. 1 (or highest grade) vegetables, “versus trying to make lemonade out of lemons.”

They were able to stretch their wings once they moved to the finished plant in Van Buren, which is in an industrial park out of the center of town. They hired a staff of 11. They passed their food safety audit withflying colors. That food safety plan is one of the elements that Cook hopes will attract a buyer.

“I know it is not sexy, but I can’t stress enough how world class that program is.”

The staff is another asset for a potential buyer, she said.

“There is a really good work ethic. They will show up and work hard.”

“We did a lot of things in the last year to try to get the business on the track that we wanted to be on,” Cook added. “And they were right there with us.”

But most, if not all, wouldn’t have minded more hours, she said. Many worked part-time. The plant has potential to process a million pounds of produce annually, but when Northern Girl shuttered they were far shy of pushing those limits, having processed 400,000 pounds of produce in Van Buren in total since moving there in the summer of 2014.

“We just needed a lot more batches to go through our facility,” Cook said.

Richard Bilodeau, director of the Center for Entrepreneurship at the University of Southern Maine, has had no direct experience with Northern Girl. But he said in an email such problems are common with new ventures. “Unfortunately many good ideas developed by smart and talented people don’t remain going concerns because of undercapitalization, lack of financial support resources, and/or incorrect positioning in the marketplace.”

WHAT’S NEXT?

Northern Girl’s board will meet next week to consider next moves.

“We’ll be putting together a list of potential buyers, reviewing that through the month of March and be contacting folks,” Cook said. “From there we’ll see what kind of a deal we can put together. It is in somebody’s best interest to pick up where we left off.”

Could a group like the Libra Foundation, which supported Pineland’s transition from family farm to thriving business, including the recent sale of its potato-processing facility in Mars Hill to a national chain for $115 million, be a suitable partner? From an outsider’s perspective, it seems like a potential match, but Libra Foundation chief executive officer Craig Denekas said in an email that the foundation hadn’t looked into it.

It might take that kind of backing to get the facility back up and running. Because that tumultuous sales year aside, Cook said Northern Girl’s biggest problem was “just not enough investment money to put in what it needed to get off the ground,” Cook said. “That’s a super common problem with food businesses. I think Maine as a state needs to take a hard look at what resources we have for food producers and how we mobilize those resources.”

Tanya Swain, the project director of the Maine Food Strategy, said the case of Northern Girl speaks to the need for more “patient capital.”

“That is investments or investors that are allowing the business to have a long enough timeline to realize returns,” she said.

Value-added processors are a crucial part of Maine’s future if the local food movement is going to continue to grow, Swain said. She called on economic development professionals to promote businesses like Northern Girl. A business that chops up beets might not be as seductive for investors as a craft brewery, but it has value beyond the monetary, especially in rural Maine, she said.

“You’ve got opportunities where an investor is likely to make a killing, and then you have opportunities where they are investing for things other than just the money.”

A case in point is Northern Girl’s fiddlehead business, among the innovations that Cook is most proud of. Northern Girl connected with foragers in Aroostook County and developed cleaning and packaging methods to keep the fiddleheads as fresh as possible as they left the state for restaurants and urban centers where they fetch a premium. The packaging included a code that allowed customers to see which waterway the spring delicacy had been found on. They also pickled fiddleheads, a way of adding value (and shelf life) to a product that has a fleeting season. Over two seasons Northern Girl sold $25,000 worth of fiddleheads to customers as far away as Seattle.

“It gave us the edge in the marketplace,” Cook said. “I liked everything we did with fiddleheads.”

That proprietary method of packaging would be part of any sale, she said, along with the equipment they own and the markets they served.

Cook said Crown O’Maine, the distribution company her parents started, which trucks Maine grown goods around the state (and which she is the general manager of) is doing well. It’s a cooperative, owned by its workers. The loss of Northern Girl, which was one of Crown O’Maine’s vendors, will be felt, especially during the upcoming fiddlehead season. But the Cooks are far from giving up the fight.

“It took us 100 years to destroy our food system and it is going to take a lot more than five years to rebuild it,” Cook said. “We have to keep coming up to bat.”

“If only there were fiddleheads every month of the year,” she said.

Mary Pols can be contacted at 791-6456 or at:

mpols@pressherald.com

Twitter: MaryPols

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