Even in down economic times, there are opportunities – I’m seeing this in my work with the local food, agriculture and natural resources sectors. In fact, in some cases the economy that is hurting so many of us is making it possible for new businesses to find surplus equipment and commercial real estate at incredible discounts relative to prices of just a couple of years ago.
It’s all about perspective. I can remember a time, just a couple of years ago, when there was a high level of consensus among economists and analysts. Unemployment was much lower then, and the stock market was strong. I even heard of people borrowing money from the bank to purchase stocks with the firm belief that they couldn’t lose. The same view of the marketplace convinced people to purchase highly priced real estate based on the belief that the escalation of land and property values would extend far out into the future. Experts, analysts, and lay investors all said the ink blot looked like a bull.
So, here we are in 2009. Most people have become very conservative when it comes to spending and investment. News reports offer the interpretation that people are building cash reserves based on the possibility that they, too, could join the ranks of the unemployed. U.S. government institutions are pouring cash into the marketplace because we, the consumers, will not. As we watch the government fill the gap that has been created by our sudden frugality, we can gain an appreciation of just how affluent we used to be and what it looked like to the rest of the world when they watched us transform our paychecks into consumer goods. Spending during the fourth quarter of 2008 clearly illustrated that the spending spree is over for now.
The question is, when we look at the marketplace now, is there consensus that the ink blot looks like a bear? Surprisingly, the answer is “no.” Only in a capitalist economy could plummeting asset values increase the flow of adrenaline within certain sectors of the marketplace. At any point in time there are businesses which are doing well and those which are not. Businesses with strong cash reserves have been snatching up assets at bargain prices. Also, employees in the marketplace motivated by fear, anxiety, or optimism are planning and launching new ventures.
Washtenaw County communities and individual entrepreneurs can gain and learn from innovative initiatives in nearby communities. In Detroit there are two emerging bakeries, formed by faith communities, designed to create jobs for people coming out of prison through the production of baked goods.
On the Rise Bakery is affiliated with the Capuchin Soup Kitchen of Detroit. What started out as a project that used soup kitchen facilities during off-hours has blossomed into a new standalone bakery. Down Home Cookin is a project of New Creations Community Outreach. Joseph Williams, executive director, turned from life as a drug dealer, went on to earn a master’s degree from Wayne State University, and now works to help others make successful transitions from prison life to full community participation. His bakery focuses on production of sweet potato pies and pound cakes using traditional African-American recipes.
Church congregations have lent strong support to these ventures, purchasing baked goods to meet their needs as consumers while also investing in the rebuilding of broken lives. Michigan has approximately 50 prison facilities in addition to local jails. Jail and prison populations have been chronically high, resulting in budget overruns and a revolving door phenomenon that is often cited as unacceptable. Starting effective vocational centers through new food system ventures housed within the private sector is a cost effective, mutually beneficial strategy for meeting needs of regional consumers and of those coming out of prison. Starting new ventures of this type will never be more affordable.
Cooperative business structures are relatively uncommon in our region. People’s Food Co-op in Ann Arbor and the Ypsilanti Food Co-op are two examples of successful local cooperative ventures. During difficult economic times, normal business overhead expenses can become deadly to otherwise healthy enterprises. That’s why several emerging businesses have approached Calder Dairy, a strong and respected food system landmark in this region, to experiment with the formation of a marketing cooperative of sorts.
The emerging businesses gain strength by associating with Calder’s brand recognition. Calder gains the advantage of being able to add a roster of new products which are not widely available in regional grocery stores. Participating businesses include Bizzy Lizzy Bakery, Tiger Bakery, and Gwen’s Cobblers. This approach to business improvement keeps all participating ventures responsive to consumer needs and interests during a period when costs of innovation need to be closely managed.
Mike Score, an Ann Arbor resident and agricultural innovation counselor with the Michigan State University Product Center, can be reached at score@msu.edu. The MSU Product Center provides existing businesses and emerging food system entrepreneurs with business counseling services. MSU is an affirmative-action, equal opportunity employer. MSU Extension programs and materials are open to all without regard to race, color, national origin, gender, gender identity, religion, age, height, weight, disability, political beliefs, sexual orientation, marital status, family status or veteran status.