VALUE-ADDED CORNER
From Concept to Commercialization
New Jersey business incubator to assist
producers, co-ops & food processors
By Dan Schofer,
Co-op Development Specialist
USDA Rural Development
ew Jersey farmers and
food processors are facing
increasing pressures from
urban sprawl and stricter
land-use regulations.
These trends are forcing them to
rethink historic production practices.
Many producers and co-ops need professional
guidance to meet changing
regulations and to maximize food safety.
Access to new food technologies is
essential to preserving New Jersey’s
farms, increasing farmers’ market share
and boosting their profitability.
To help meet these needs, USDA
Rural Development’s New Jersey State
Office has partnered with the Rutgers
University Food Innovation Center
(FIC) and other stakeholders to expand
delivery of technical assistance to farmers,
cooperatives, food processors and
rural communities. This assistance can
range from the formation of a co-op
steering committee to the implementation
of a business plan.
Rutgers sought a one-time
Agricultural Innovation Center grant in
2003 from USDA Rural Development
(RD) to get the center started. Since its
launch, FIC has helped 500 businesses,
with its primary focus being on New
Jersey’s agricultural sector.
The partnership between USDA/RD
and FIC has provided grassroots technical
assistance to farmers and rural businesses.
USDA/RD funding, in combination
with local FIC expertise, has
opened an avenue for product and business
development not previously available
in New Jersey.
FIC has assembled a multi-discipline
team with various areas of expertise —
including business development, product
development, food manufacturing
and retail marketing/sales — to help
strengthen the state’s farm and food
industry.
Business incubator
FIC is currently building a 23,000-square-foot business incubator in
Bridgeton, N. J. This facility will enable
FIC to fully realize the contribution it
can make to the New Jersey economy.
It will house food-processing and laboratory
space, analytical laboratories and
distance-learning and teleconferencing
equipment. It will also provide administrative
office space for staff and clients.
The business incubator will help
with the formation of new cooperatives
and food companies while also providing
a wide array of resources and technologies
for existing producer groups
and food businesses. It is designed for
use by farmers and cooperatives, startup
food companies, existing small- and
mid-sized food companies, and retail
and food-service establishments. The
incubator will provide assistance from
concept to commercialization.
“We want to develop an economic
model for other states looking to preserve
farms and increase the quality of
life in rural communities,” explains FIC
Director Lou Cooperhouse.
Co-op Development Center
In 2004, FIC received a Rural
Cooperative Development Grant from
USDA Rural Development to establish
a program to support the development
of cooperatives throughout New Jersey.
FIC provides business development
assistance, including feasibility analysis
and market development.
Technical assistance with food technology
enables businesses to create
unique products, improve qualityassurance
procedures, develop nutritional
labeling and develop packaging
solutions that provide high-quality
products.
Education is an important part of
the cooperative development services
that FIC provides. Classes in business
basics are regularly conducted in different
locations around the state to
help prospective enterprises better
understand business fundamentals and
to develop solid business plans. These
classes also help participants better
understand how to price their products
and to develop sound marketing
strategies.
Currently, an on-line resource center,
or “one-stop shopping” website for
regional cooperatives, is being developed.
It can be reached via the FIC
website.
An on-going technical assistance
project involves assisting a farmerowned
LLC in finding alternative
markets for its produce. The group
has developed a business relationship
with a broker to sell tomatoes during
the summer. FIC will help these farmers
analyze the results from this season’s
sales and make suggestions to
improve marketing/profitability for
next year.
Value-added projects
Since the inception of USDA Rural
Development’s Value-Added Producer
Grant (VAPG) program in 2001, more
than $730,000 in grants have been
awarded to New Jersey applicants. FIC
has held a series of workshops to assist
farmers and agricultural producers in
the application process for VAPG funds.
Cooperatives and producer associations
that have received funding from
the VAPG program in prior years
include:
- Sussex County Cooperative Milk
Producers Association, which received a
grant for a feasibility analysis and business
plan for production of non-traditional
cheeses;
- Jersey Fruit Cooperative Association,
which used its grant for a marketaudit
study for the New Jersey peach
industry;
- Garden State Ethanol, which used a
VAPG for a feasibility study that
examined the use carbon-dioxide created
as a byproduct of ethanol for
flash-freezing New Jersey-grown produce;
- New Jersey Tomato Council, which
used a VAPG for an economic-feasibility
study for building a value-added
processing plant in southern New
Jersey;
- The New Jersey Seafood Marketing
Group, which is using VAPG funds to
conduct customer focus groups, develop
retail packaging and develop a
brand for New Jersey fresh clams, and
is currently test marketing its product
in about 20 retail stores. Analysis of
the sales and marketing will be presented
to the group this fall.
- Circle M Farms, which is using
VAPG funds to coordinate the production,
advertising, promotion and
test marketing of peach cider. The
benefits from this project include 10
new retail customers, greater consumer
demand and a 300-percent
increase in cider sales. Circle M
Farms is currently using a second
grant to determine the feasibility of a
hard-cider product.
“This is a partnership based on trust,
respect and a common goal of farmer
preservation,” says Andy Law, USDA
Rural Development state director for
New Jersey. “The successes in a wide
range of agricultural industries are the
dividends of this partnership.”
Partners contact information
USDA Rural Development: www.rurdev.
usda; Food Innovation Center:
www.foodinnovation.rutgers.edu;
Rutgers Cooperative Extension:
www.rutgers.edu; New Jersey Farm
Bureau: www.njfb.org.
