MEDIA LAUNCH SPEECHES

Monforte Renaissance: A Business Model for a New Sustainability
by Michael Hays

One of our primary objectives with the Monforte Renaissance 2010 campaign is to bring
consumers and producers closer together, and in so doing, deliver higher quality products
to consumers while enabling a better quality of life for producers. We intend to achieve the objective partially by how we finance Monforte’s rebirth.

The financial need for Monforte’s renaissance is substantial. A new dairy will conservatively cost in the neighbourhood of 1 to 1.5 million dollars, depending on the type of building we find or build. While the company does have access to some government programs and traditional bank credit, when we combine these sources with the founder’s equity, there is still a funding gap of $300,00 to $500,000. As a financial professional, I would typically try to find venture capital or an angel investor to fund this gap. In return, Monforte would likely have to give up a significant equity stake as well as ultimate operational control over the business. Knowing that venture and angel investors usually look to make a 20-30% annual return within 3-5 years, I ask myself, what changes to the business could they make to generate this type of return within their desired timeframe? Will the farmers be paid less? Will quality be sacrificed? Will artisanal techniques be able to survive and flourish or will streamlining and division of labour take over? And if these returns are made, what will be done with the profits? Will they go back into an investment pool to be spent on the next venture? Buy a new house? A new car? Be put into GICs for someone’s retirement?

As a long time capitalist, I am a proponent of rewarding investors who risk capital and believe they should be free to use the rewards as they see fit, so I have no objection to the uses of profits just mentioned. However, we are amidst a moment in history that demands conventional wisdom be challenged, and I cannot help but acknowledge that society only stands to gain from modifications to some entrenched capitalist practices. This campaign offers us an opportunity test a meaningful modification based on the belief that where capital comes from matters. In studying Monforte’s situation and after many conversations with Ruth and other stakeholders, it has become clear to me that in some cases, consumers can and should harness their buying power to replace traditional capital sources and in return influence how businesses are operated and for whose benefit.

For this campaign, we are inviting consumers to harness their buying power through what we believe to be a new bent on Community Shared Agriculture (or CSA) programs. I say new as we are extending CSA principles from commodity production to food processing, giving consumers a direct say in not only how their food is produced but also how it is processed.

Our CSA program is comprised of three subscription options: the Wheel, the Brick and the Wedge. And I need to stress that we are not selling shares or any other type of investment in Monforte, as doing so would run amuck of Ontario Securities regulations. Subscription details are outlined in the media kits and I will be available to answer any questions tonight or at a later date, so I’ll give just a very brief explanation. All of the subscriptions involve prepayment in return for cheese to be delivered over five years once the dairy is open. The Wheel, Brick and Wedge subscriptions are $1,000, $500 and $200, respectively. Wheel subscribers will receive $1,500 in cheese, Brick subscribers $750 and Wedge $250. Wheel and Brick subscribers have the choice of receiving their cheese by using Monforte vouchers, to be redeemed at markets or the dairy, or through delivery of cheese baskets. Wedge subscribers will receive vouchers as shipping costs make baskets uneconomical for this option. So, for example, a Wheel subscriber has the option of redeeming $300 in vouchers per year for five years or receiving two $150 baskets per year for five years. Also, all subscribers will be able to attend periodic Monforte Town Hall meetings and the grand opening hootenanny scheduled for January 2010.

The subscription dollars, in turn, will be used to partially fund the construction of Monforte’s new home.

BRENDAN HOWLEY’S SPEECH >

RUTH KLAHSEN’S SPEECH >