20 May Fair Food Network
Interview with Lolita Nunn, Investor Relations Officer for the Fair Food Fund Network
I was first introduced to Oran Hesterman, the founder, and CEO of the national nonprofit Fair Food Network, at a Sustainable Food Systems and Agriculture Funders conference. He was piloting the Fair Food Fund, an integrated capital structure where grants and creative capital investments worked together to connect farmers to consumers with healthy food in socially just ways. Two years ago, Mark Watson and Lolita Nunn joined the team as the Fund’s investment approach evolved to center a place-based approach alongside a deepened commitment to racial justice and equity. Today, Fair Food Fund is innovating in the food and agriculture space and beyond by looking at holistic approaches that not only support entrepreneur success but advance broader systems change.
Jen: How was the Fair Food Fund created?
Lolita: Fair Food Fund was started by founder Oran Hesterman to support local farms and increase access to healthy food. In 2019, Mark Watson was invited to work alongside me and the Fair Food Fund team to reimagine the investment thesis, expand its impact, and take it nationally. Mark brings over 30 years of impact investing experience to this work. Mark’s passion for bridging the racial wealth divide by providing flexible, patient, inexpensive capital more equitably, is one of the reasons he became involved in this system-change work at Fair Food Fund.
Jen: How are your investment funds catalytic in a way that is different from other funds?
Lolita: We look at this work as systems-change (impact first, equity focused), and we make targeted investments to support mission-aligned food entrepreneurs with an equity focus on BIPOC and women-led and run businesses. We work to meet entrepreneurs where they are with customized financial solutions and resources. We also make it a practice to engage key stakeholders in the community and local food system. Our holistic support delivers resources, and wrap-around technical assistance to increase the entrepreneur’s success.
I do want to highlight that we cannot do this work alone, we want to leverage our capital to bring other investors off the sidelines. For instance, in response to COVID, we launched a Collateral Initiative to support food enterprises during these unprecedented times currently and ongoing. This initiative is a grant-funded pool of capital that offers a credit enhancement or loan guarantee enabling deals that otherwise might not be possible.
Jen: How do you describe the kind of non-financial returns the fund offers?
Lolita: We are a mission-driven fund committed to supporting healthy food access, job creation, economic development and, support to family farms. We intentionally deal source with an equity lens and we are committed to having 50% or more of deployed investments going to BIPOC and women-led enterprises.
Jen: Can you describe how you use integrated capital to do your work?
Lolita: Through our approach we demonstrate what is possible when a community of stakeholders come together and collaborates, therefore we are modeling change. Our team brings holistic support weaving together catalytic capital, that is flexible and patient, includes wrap-around business assistance that meets the entrepreneur where they are.
It is also important to broaden the offerings to include all forms of capital — social, intellectual, and political. This is how we understand and provide integrated support. We seek to integrate and augment those local assets as appropriate to catalyze change as defined and informed by the communities we serve.
Jen: What is transformational about the businesses that you invest in?
Lolita: The businesses we support are change-makers in their communities. Take the example of Forty Acres Soul Kitchen. Its impact extends far beyond the plate — from creating living-wage jobs to sourcing from area farms. Plus, in a city with nearly 20 percent Black residents, Forty Acres is the only 100% African American-owned full-service, sit-down restaurant.
We invest in businesses from early-stage to mid-sized along the entire food value chain. We are also building a community of entrepreneurs, which we see as communities of practice. We want local entrepreneurs to be able to learn and share with each other, as well as become advocates for policy change that supports food access and security to advance systemic change.
Jen: How do you address racial justice, income inequality, and/or gender justice through your products and services?
Lolita: To help bridge the racial wealth divide, we are intentional with our investments: 50% of the opportunities we invest in, go to support BIPOC and women-run and led enterprises. We also believe in not only including but also engaging the voices of the communities we work with, and most importantly the voices of the entrepreneur and community help shape and guide our work.
And when it comes to addressing income inequality, we find that in many cases when a BIPOC entrepreneur is not able to tap into family and friends or meet the credit restrictions from a traditional financial institution, we are able to step in, meet the entrepreneur where they are and provide them with flexible and patient capital. Fair Food fund is not as restricted as some other financial institutions and intermediaries, which we see as an important added value to the ecosystem in support of the entrepreneurs we support.
Jen: What does a foundation or investor need to understand in order to invest in transformational businesses?
Lolita: This work benefits from patient capital, sensitivity to returns and flexibility in deal structuring. We need to take a holistic perspective, time, and the engagement of many stakeholders. Their investment is a necessary part of the total of resources that are needed to bring about systems change.
Jen: What do you tell people who think your fund is risky?
Lolita: Fair Food Fund has a 20% first loss reserve. To manage the financial risk – we have a due diligence process and the expertise of our Investment Committee that has experience with food, entrepreneurs, and finance, that vet the probability of each deal. However, we see the bigger area of risk is not achieving impact. We develop relationships built over years to help the entrepreneur, engaged with TA, from pre-deal to post close to realizing the impact.
Fair Food Fund Highlights
Investment Thesis/What is your rationale for your approach to investing? We use a placed-based system integrator approach, leading with equity, to catalyze change, provide catalytic capital – financial, social, intellectual – alongside our holistic support to make investments in mission-aligned food enterprises so communities can thrive.
Geography: Michigan, New England, Camden, NJ
Year Founded: 2013
Number of Investments: 19
Funds Raised: $8,500,000
What’s on Lolita’s Mind?
Book: The Audacity of Hope, Barack Obama. Right now…as time allows, I am writing, reflecting, and practicing mindfulness meditation.
Song: So many…but my go-to feel-good song is Happy Feelings by Maze & Frankie Beverly
Podcast/Film: Pretty much anything inspirational – I love this TED Talk – by Luvvie Ajayi Jones. Link here.