[caption id="attachment_71917" align="alignleft" width="252"] Patty Karlin tapped Artisan Angels to take Bodega Artisan Cheese beyond the farmer's market.[/caption]
BODEGA -- Patty Karlin's Bodega Artisan Cheese for nearly 30 years has helped put the North Coast on the map for handcrafted quality foods, but when faced with mounting costs of keeping her small-scale goat dairy in business, she turned to a startup funder of artisan food startups to take her products to a wider market.
In early March, she signed a deal with Artisan Angels (artisanangels.com), a Santa Rosa-based group with two dozen accredited investors currently, to sell a half-stake in the company, with the other half set to transfer in mid-September. With the investment comes a second cheesemaker -- Tatiana Milhallove -- to help produce and market the eight to 10 different products, plans for more production equipment as well as access to the nationwide distribution network of Zoe's Meats, a Santa Rosa-based artisan maker of cured meats. It is run by George Gavros, who also leads the investment group.
"I'm thrilled with this deal," Ms. Karlin said. "I looked for years for some help."
Small cottage businesses are challenged to sell enough to cover escalating feed costs and distribution fees, health and accreditation inspection fees of several thousand dollars annually, and retailer markup for high wholesale prices, which can put prices on the shelf out of reach for a number of consumers, she said. For example, $14-a-pound cheese from her 7.6-acre farm has been marked up to $28 a pound on a store shelf.
The product line had been sold in a number of Whole Foods Market locations plus independent markets and farmer's markets in the region, until the business contracted by half eight years ago because of internal issues. Then came the latest economic recession, and production was constrained to 15 goats on the milking link, enough to supplying just a booth at the Marin Farmer's Market in San Rafael, tours of the farm and community-supported agriculture baskets.
This year, the herd is up to 70, including 22 does on the milking line. Mr. Karlin plans to continue on as a consultant in the business as long as requested and plans to continue managing the farm and goat herd.
[caption id="attachment_71921" align="alignright" width="210"] Zoe's Meats and SalamiStore.com are other ventures by Artisan Angels managing partner George Gavros.[/caption]
The deal with Artisan Angels affiliates the Bodega Artisan Cheese brand into Zoe's Meats' salesforce and network of contract and staffed refrigerated distribution warehouses in Santa Rosa, Seattle, Chicago, Boston and New York. Other markets served are Denver, Southern California, Arizona, Texas and the Southeast.
Zoe's Meats (zoesmeats.com) employs 22 nationwide and has been enjoying annual growth of more than 50 percent. The primary market is professional chefs as well as independent retailers. This month, the company launched SalamiStore.com to fulfill direct-to-chef orders.
Mr. Karlin said she unsuccessfully pursued funds from a number of agriculture-related and traditional sources over the years for growth and capital projects.
Artisan Angels launched last year as an outgrowth of Zoe's Meats, founded in 2007 by Mr. Gavros and friend microbiologist Charlie Hertz. The goal was to focus on funding artisan foods producers with initial funding in place and strategic planning completed but annual sales of less than $1 million.
North Bay Angels and the San Francisco chapter of Kereitsu Forum also have been making inroads into small-scale funding for artisan food producers, according to Anni Minuzzo, a Northern California food production business counselor who offers seminars at Small Business Development Centers. Because of razor-thin profit margins and niche products, funding for such startups through traditional lenders has been a problem, she noted.
Jeff Sacher of Santa Rosa Realty represented Bodega Artisan Cheese in the business sale to Nafplio, LLC, with Gavros Family Trust as managing partner. James Manley of Keegan & Coppin represented the buyer.
