Sunday, December 4, 2022

NCtrend: Cutting in the middleman

by Alex Granados

Sandi Kronick, 35, has long been an idealist. Growing up on Long Island, N.Y., she became a vegetarian at age 11 after a friend, appalled at how animals were treated, announced he was giving up hamburgers and chicken fingers. “I thought, ‘Gosh, I better start doing things that I care about, too,’” she recalls. In high school, she became enamored with Ben & Jerry’s, the popular ice-cream brand known for its hippie vibe and devotion to small, family farmers. She even attended one of the Vermont-based company’s shareholder meetings to ask the founders to speak at her school. She got free ice cream instead. “I remember driving a little truck with tubs of Ben & Jerry’s ice cream for some spirit week or something and playing The Beatles and thinking, ‘We’re changing the world.’”

At Oberlin College in Ohio, she became food coordinator of a student co-op, in charge of 24 students who worked with local farms to buy and pick up food served in 12 dining halls. She learned about sustainable agriculture and realized she didn’t have to feel guilty about eating meat. “I started to engage with farms and realize there were some pretty happy chickens out there.”

After graduating, she followed her boyfriend to North Carolina, where she went to work for Pittsboro-based Carolina Farm Stewardship Association, which promotes local and organic farmers. Shortly thereafter, she rode with a Tar Heel strawberry farmer to help him peddle his produce. Many of the nonprofit’s clients, including Kronick’s driver, were former tobacco growers trying to turn over a new leaf. But this guy was totally unprepared. He had no invoices and no inkling of how to fill one out. His tobacco crops typically were sold through auction or according to quota. “Everybody was doing the legwork for him,” she says.

Plus, there were communication breakdowns between buyers and independent farmers. Wholesalers would ask for something, and farmers would grow it. But when farmers returned with a price, it was often more expensive than Chinese imports. “They keep disappointing each other,” Kronick says. “And all we need is somebody bold enough or ballsy enough to want to pull out the details from these people like a dentist and make sure we’re all on the same page. And when mess-ups happen, ’fess up.”

The farmers needed a middleman. Kronick proposed the idea to the Stewardship Association, which launched Eastern Carolina Organics in 2004 with a $48,000 grant from the North Carolina Tobacco Trust Fund Commission, a government program that disburses part of the state’s settlement with cigarette companies for economic development in tobacco-dependent communities. After generating sales of $240,000 its first year, Eastern Carolina spun off from the nonprofit and became a limited-liability company, with Kronick as CEO.

Eastern Carolina is a lot like the Oberlin co-op, serving as a bridge between more than 100 farmers — most in North Carolina but also South Carolina, Virginia and Tennessee — and wholesalers, stores and restaurants. Herbie Cottle, 62, used to grow tobacco at his Rose Hill farm but switched to kale, strawberries and more when the Tobacco Transition Payment Program offered him a buyout to quit growing tobacco. The number of tobacco farms in the state had dwindled to 1,682 in 2012 from nearly 8,000 a decade earlier. After marketing the produce himself, Cottle learned that Eastern Carolina was a better option. “It just really works well when they concentrate on the marketing part, and I don’t have to do that.”

The company distributes pricing sheets to wholesalers, restaurants and other customers. Buyers take their pick and sometimes suggest other things they would like grown. The farmers deliver the produce to Eastern Carolina’s warehouse in Durham, where it moved its headquarters last year. The company then ships it through its two trucks or hired ones to customers as far north as Montreal and Toronto and as far south as Florida — though weekly or biweekly trips to the Triangle, Asheville, Charlotte and Atlanta are more common. Farmers get 80% of revenue, while Eastern Carolina — which is owned by 17 farmers, with Kronick also holding a stake, and has been profitable since 2005 — keeps the rest.

Eastern Carolina has grown along with the local-food movement, finding its way into grocery chains such as Austin, Texas-based Whole Foods Market Inc., co-ops such as Weaver Street Market in Carrboro, Hillsborough and Chapel Hill and local restaurants. It now employs 12 and had $3.8 million of sales last year. Nevertheless, Kronick still sees it as more of a calling than a business. “It’s an honor for us to work with the organic farmers who are stewarding their land and enabling customers to access the values and the nutrients that are so important to them.”

Alex Granados is a Raleigh-based freelance writer.

For 40 years, sharing the stories of North Carolina's dynamic business community.

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