032: Mark Thomas - Garfield Produce Company

Mark's background in operations and finance, mixed with his entrepreneurial spirit, makes him a dynamic leader. He always takes the time to get to know both his employees and customers, adding a personal touch to the company.

More about Mark Thomas:
Website: https://www.garfieldproduce.com

More about Joe Swartz:
Website: https://amhydro.com/
Twitter: https://twitter.com/HydroConsultant

More about Nick Greens:
Website: https://www.nickgreens.com
Twitter: https://twitter.com/InfoGreens

Transcript

Hey everyone. Welcome to another episode of the poly greens podcast. I'm Joe Swartz from am hydro, along with Nick Green's of the nick greens grow team and talk today about controlled environment agriculture in a little bit of a different light. So we're going to talk about some real high level high quality production, but we have Mark Thomas with us today.

Mark Thomas has Garfield produce in east Garfield park, Chicago, and he is using the CA production for a really amazing social mission. And he's using it in a number of different ways to help bring back economic empowerment and to help serve underserved communities. And so he's got a really great story and a really great operation.

He seems to be a fantastic guy and a great representative of our industry. So, uh, mark, we're, we're really pleased to have you here today and, uh, and thanks for joining. Thank you, Joe. And I should add that I'm a regular viewer and listener to the podcast. So I've been on since day one, Friday night, Saturday morning.

Does it go by when I don't listen? So thank you. Fantastic. Thanks. We appreciate your support. The backstory behind him is really, really impressive too. Um, I would like I wouldn't let him go ahead and, uh, tell the, tell the audience a little bit about your backstory mark. I, I really, really, uh, that's what really drove me to mark.

Um, when, when I met mark, I kind of, uh, we started talking and stuff and he just immediately became a mentor to me, you know, as far as a finance side, right. I'm horrible finance, you know, I'm, I'm, I'm a science guy. I'm not a finance, uh, financial major, you know? All right. So Joe, I guess, uh, as Nick knows, the first thing is my wife and I had failed at retirement.

And I guess I say that right from the get go, because we should be retired and enjoying life. And, uh, either Southern Florida or somewhere in Southern California, right? Um, but the next point I grew up on the west in the Western suburbs of Chicago, um, went to grade school and high school there, uh, ended up at Dartmouth college, uh, New Hampshire and got my MBA there.

Um, in finance and accounting, I came back to Chicago and worked for price Waterhouse and Arthur accounting firm for five years and got my CPA at that time and ended up also doing some financial consulting for them. And I did have a career path from them to do international consulting, which sounds very glamorous until you've actually done it for awhile and realized that you really hate the travel and you hopefully go into hotels and really nothing see nothing of the, uh, of the cities that you're at, but just the hotel rooms and the offices.

But in any event, after probably five years in Chicago with Pricewaterhouse, I transitioned to the Tribune company, which owned at the time. Um, enlarge newspapers across the United States, as well as about 35 TV stations. And I was hired as the, um, audit manager for the Chicago Tribune. Um, and that was my first position.

Um, I didn't want to do any auditing cause I was tired of auditing at the time. And I was told you don't have to worry about that. And I sure didn't because I ended up, um, running and, and working on and, um, working with, uh, people who were putting in large projects, for example, at the Caribbean, we began to zone our advertising and we had to figure out the financial implications of what the revenue would be for different zone advertising.

Um, so it was totally different than just being counter accounting that I wanted to get away from. And then in 1985, um, the Tribune, the Chicago Tribune had a huge strike and we lost, um, basically our entire production workforce and. I use that as an opportunity. And just prior to that, I had moved from my auditing role into being the financial officer for the production facility.

Again, this 3000 employees. So it was like a very large company within the Chicago Tribune. And, uh, they had just built the Caribbean. They just built a huge, uh, printing plant and wanting to make sure that it was driving efficiencies out of the plant. So I was given, um, the charge to, um, develop a group of people that help drive the efficiencies out of their plant.

And as it turns out to survive after the strike to make sure that we were back on track and it was during that strike time and the period afterwards that I became very, very involved in operations manager. In the production area and then it off after a year or two. Oh, actually using my financial background, um, uh, manage different other production areas at the Chicago Tribune and open mentally, um, to manage all the large newspapers, all the newspapers and the premium property in terms of producing the newspaper on the production side, um, for Caribbean company.

And I left that role, um, at the end of 2008. Um, and in the meantime, I had also been asked to become the audit director at Tribune company as a whole, and had some very large projects that I ended up running. So as Nick said, I had a strong financial background, the CPA background, um, and ironically, all that stuff has helped me in the, in the groping environment.

But, um, I have this strong financial background and definitely. The production of the newspaper background helped me. Um, when we had to begin to really get our, um, controlled agriculture, our internal agriculture here, our controlled environment, agriculture really producing on a regular basis. So that's really my background.

My wife was a corporate attorney for Motorola and for a very large law firm, international law firm. So when she and I retired at the end of 2008, beginning of 2009, um, we did the things that most people do. Unfortunately, the economy has gone to hell at the time. Um, but we ended up traveling around the world and we did exercise.

We got ourselves into shape and about 2013, 14, we said to ourselves, well, let's, what are we going to do? Now? Let's get back to the community. We had done some volunteer work for breakthrough urban ministries, which is a. Non-denominational but Bible-based, um, ministry that focuses on the 36 square blocks.

So he's Garfield park, you're in Chicago. And we were very impressed with the management of the organization. And again, had done volunteer work for them. So we asked them if they needed help. They said, yeah, we have a men's shelter and a women's shelter where we're thinking people from homelessness to job readiness.

But when they come out, there's no jobs here in east Garfield park. The nearest jobs are at minimum wage way out in the suburbs and it takes an hour and a half to get out there an hour and a half to get back. And it's really not worthwhile. So in a bit of madness, um, I turned to my wife and said, well, let's just start a job to start a business here.

And, um, we didn't know initially what we were going to do, but we ended up through, uh, circumstances, partnering with somebody who, uh, was a Purdue engineering graduate and was going for his MBA at DePaul. And then decided that urban agriculture was the way with a few. And had been focusing on doing some volunteer work at the plant here in Chicago, which was an incubator for, um, for hydroponic growing.

And, um, he had, again gotten very involved with the science department at the call and we was doing research and growth rates relative to, uh, led, uh, WaveLight frequency, each book, the color spectrums. We were very impressed with that. We quickly put together a business plan, Nunes, the work that he had done in his entrepreneurship class to come up with a basic economic model.

Um, we did make an important decision at that point though, rather than being a nonprofit, we decided to be a for-profit company. We wanted there to be a focus on revenue on the top line on expenses and on the bottom line. So we were very tired about D and I, and my wife were very tired of seeing these social organizations and government programs, um, never really come to fruition.

And always just certain to get by or get 80% there if we were going to be successful. And we plan to be, we wanted there to be a focus on the bottom line and then the ability to share equity with the employees. Uh, Judy and I never went into this to make money for ourselves. We went into this to create job opportunities for people and ultimately with success to be able to share equity will be raised.

So what year was the, was the first day that you opened the farm or you till you attain the space? Right? We got this base and let me forward being that again. We, our first, uh, day of opening was I think November 6th, 2014, we got our food license and Joe, I guess Nick knows that's from Chicago, Chicago at that time, really wasn't set up to deal with, um, And even to get the zoning permit, to open up our facility, which is a 6,000 square foot warehouse, right in the middle of east airfield park.

It's a hundred year old building, a beautiful building with a boat trucks, roof, and things, but it had been vacant for 10 years and was an auto repair facility before that. So when Judy and I came in, we spent the first couple of months on doing two things, one cleaning the place up a rafter by rafter, and then also working in food pantries in the area to get to know people in the neighborhood.

But the ironic thing was the zoning to get our zoning is just get our business establish. We hit the firewall, the restaurant zoning of the city of Chicago. And one of their requirements was that we had a, a, uh, Okay, wait, spotter. So we're about the only hydroponic operation is a grease pit on it on its, uh, on its discharging water going on is they were treating all the rest.

They were treating all the farms as high end restaurants, Joe like Michelin star restaurants. Yeah. Excellent. Yeah, a lot of the bureaucracies, um, is related. Uh, urban farming, obviously, you know, controlled environment in ag, um, in more rural areas or more agricultural areas, haven't understood that, or haven't had to experience that.

But as, as urban farming has really taken off, that's, that's been a hurdle for a lot of people, a lot of different areas. We did that when we did rooftop farms in New York city. Um, so that's, that's, uh, a difficult lawn for people to navigate. I'm glad to see, um, uh, city planners and zoning departments and all, and building departments, um, now coming to grips with what an urban farm looks like.

So, um, right, right. Yeah. Yeah. They have to because, um, just the, just to go through the zoning Mays was incredible here in Chicago. We're a little bit lucky that you're all Grummond. If you're in good hoops with the alderman, you can get a lot of things done and you can not bypass, but he can help you. He or she can help you get, get the permits that are.

Well, you're absolutely right. Um, I had totally underestimated the amount of bureaucracy and what was involved in terms of just getting established as a business, as a control, uh, enter a bunch of business in the inner city. And, um, I had also probably underestimated more than anything. Cause I thought here we were a soldier, you know, we were going to do good.

We were social, trying to get some social things done. I had totally underestimated the legal and the tax complexities involved, um, in terms of what we're doing. Um, we're not established, we just didn't establish a business and go through a river startup, but we also had to deal with all the social enterprise things.

And how do you get funding and what do you do with foundations whose foundation and give money to for-profit companies? And there's all sorts of talk right now about social enterprise and, and reading businesses with nonprofits. The, the realities of that are the tax laws and the regulations are not okay.

I'm friendly for that. So we had to do both. We had to deal with the city zoning issues and the city requirements, as well as the federal and state and the legal requirements and all that on top of food, safety issues and just getting a growing business going. So you thought it was all about just growing plants?

Yeah. Well, I thought it was about creating jobs. That's what we wanted to do. And it ended up that we had to deal with things. Uh, but I tell you the one thing that Judy and I appreciated more than anything, it was our first real learning experience was working in these food pantries in the area. Because, um, again, I had grown up in a very privileged Western suburb of Chicago.

Uh, you know, I went to an Ivy league school. I went to one of the topic, how many firms and I've been dealing in the Caribbean dealing with very top executives. So it was really eyeopening to come out and really see the real world of what goes on in areas. I mean, even red light cameras that you don't even think about and you just pay the fine and just say too bad people can't afford the hours here.

And they ended up then, you know, four or five months later, the bureaucracy rolls through and there's a warrant for their arrest because they never paid the 50 or $75. Fine. So it's just, you know, when you make a mistake, um, in this environment and within this bureaucracy that we've set up in this country, it's really, really helped recover.

Yeah. So the whole time in college, you never, ever thought you were going to become a farmer. Oh, Nick. I was going to be, I knew how to do complex international conglomerations of business is an ROI. And again, at the Tribune, you know, I was in charge of actually urgency, billions of dollars of consumables and, um, And capital equipment.

So yeah, I had absolutely no idea. I and Judy and I laugh as we're lucky where we live, uh, in the Northwest suburbs, uh, plants seem to grow well there. So even our prehistoric weeds come out looking good, but, uh, we don't have anything to do with that. So, uh, we had thought Nick and Nick and Joe, initially we would, I thought we were going to reclaim bricks here because I thought that was the job.

We were, we were doing something that nobody wanted me to do back in 20 13, 20 14, as we were looking for a very labor intensive, low capital intensive business, because we really wanted to create jobs. So I thought we'd do something like, you know, concrete offer bricks that will be in reclaim. Um, but again, we met this, this young man from the fall and, uh, he turned out to be just terrific.

And we ended up then creating. Uh, with him renting this warehouse space that we had, it was a lot larger than what we needed, but again, um, rent is very cheap and these areas are going to impact, move incredibly inexpensive. So we knew we were going to grow or we anticipated growing. So we ended up, we started out with a 6,000 square foot warehouse, um, a friend of ours and the restaurant, or donated a really large chiller for us.

And we built eight, uh, three level of growing modules at that tag. And we use the board of directors at breakthrough, urban ministries, uh, their top executives and people within the city get raids and the chefs and haters, um, within Chicago. And within six months, we were sold out of our little production, not aware our eight modules again, that was the only 24 growing levels.

And we didn't know initially what we were going to grow. And we started the business model, talked about growing kale. That's what we started with. We ended up changing and morphing into really focusing on micro greens. And right now are like, the cellar is a rainbow, which is a mix of kale and brussel sprouts and broccoli and radish.

And these are all microbleeds. Although you do see in the background, we put with it a little bit with poke it and we are growing some lettuce varieties and some kale too, as someone who's never grown before. Well, uh, obviously, you know, some of the challenges that you've already talked about, um, there were some unexpected occurrences and learning experiences as far as the farm production.

How has that process, I mean, how did that work for you? Did you, did you encounter a lot of big surprises, obviously the learning curve from, you know, the industries that you were in to a completely different unrelated industry, must've been pretty profound. It was very, very broke down. Go. Fortunately, Steve, our partner had done that volunteer work at the plant, and he knew when he built the module that he was doing.

And we were able to piggyback off of that. Um, we, an unfortunate thing for us though, was that Steve left to go onto San Francisco and joined the internet startup. And after about a year and a half and, uh, Judy and I hit the decision to make them, whether we were just going to shut the place down and go forward.

And it was at that point that my inadequacies in terms of agriculture really came out. I had thought Joe, that he was a really simple thing. That hydroponics was just, you built the growing level at a slight little angle so that the fertigation system would flow the water through, uh, through in lights.

And at that time we had a restaurant and you just sprinkle some seeds down on a little slump, Um, Nick was a board when he first saw us. Cause we ran our water non-stop so we were just flooding the plants out. Didn't have any idea that it's okay to run the water. There was just no D there was just no dissolved oxygen in the water.

Right. So Nick, when Steve left, we had, again, he had, we had sold out our production and we were making about $1,500 a week in sales. Um, when Judy and I took over and I naively thought, all you do is just draw the seats down and watch it grow after a little bit of germination. Um, I drove the sales down to about $300 a week in four months.

So we were in bad shape and Judy was in charge of sales and she would be selling things that I couldn't grow. We did grow a lot of really good LT as I stayed with. That was that, uh, the only good thing was it turns out watercress and pea shoots really thrive. And what really is water that looks like they're Mekong Delta, which I had no idea was a problem.

Um, but then we were fortunate to hire a general manager who really knew what he was doing. His name was various Jones. He had grown up here in the neighborhood and worked at windy city farms, which is a training organization here and threw them on and ended up running the garden on the former place, the outdoor air number farmer's place.

And Derrius really knew what he was doing. He came in, turned the place around throughout everything that I was growing planted. Things appropriately treated them appropriately from an agriculture standpoint. And again, within six months we were sold. Um, it was at that time that we drive to the people at breakthrough and we said, let's really go for some significant funding.

We were able to get an after million dollar loan from the MacArthur foundation that at that time using their loan funds were focusing on helping small businesses on the south and the west side of the city. Um, that money came in traunches and we had to earn it over time as we met different benchmarks, but it really allowed us to really change our business operation who develop a climate control grow room.

You could be really developed with mixed alpha. And that's when Nick and I really started working together. He helped us design our growing modules. Our growing levels, um, helped us in our decision for our led lights, who really helped us with the overall a partner is helped us with the overall design of the global

And both of those guys along with areas are really responsible for what was created. We purposely didn't overbuild. We only put in one growing line at first, um, with the option to put in three and a half more growing lines as business would develop. But we, again, we're trying to watch and husband our capital there.

Um, and, um, it turned out to be a good thing because we did, then we we're able to expand as our, as our sales expanded. And I would say Nick has reiterated this, Joe, and I think this has come up again and again on the podcast. Um, as a financial person, again, I was trying to husband our resources and not over spend money.

Um, the development of the grow room, my wife is an attorney was very concerned about regulatory issues and. He some of the key takeaways for people who are going to start up a business like this is I, as a financial person, thought that the, um, investment in food safety was really not going to pay off. I can smell it with money down the drain.

You know, we were just putting up a facade of food safety. That reality is we hired some food safety experts, and Nick helped us with his background and the emphasis that we put on food safety, even on things like a passing the floor, which I was felt was a waste of 8,000 or $10,000, turned out to be absolutely critical in our, what was turned out to be our business model, which was food sales and food distributors.

And, um, again, we ended up the next question. We ended up in August of 2018. Then with this beautiful climate go grow room, beautiful growing modules. Um, we got a couple of employees at that. Oh, we were ready to roll, but we changed our business model and weren't selling anymore directly to restaurants and caterers.

We cut that off as we went through the growth growing product growth and development process. And so we ended up changing our business model and then signing him, sell the food distributors. Fortunately, we started getting food distributors right in, in August of 2018, but I've got to tell you it's pretty daunting for a financial person.

And especially for me with my background, with the Caribbean used to dealing with, you know, 1.5 billion growing to $2.6 billion over three or four years to start out with zero sales. No, I guess me 18 at that start watching, watching that grow. And, uh, again with Nick's help, we were able to, uh, that and the employees who really knew what they were doing, you know, with areas we were really able to, um, again, it was in six months, we were starting to sell out and, um, it's turned out over time that the decision to go with food distributors rather than the individual restaurants, um, was.

We lost a little bit in terms of the pricing. The pricing is a little bit lower when you sell it through distributors, but then they have to sell the restaurant and fingers. But the upside was our volume went up 10 to 15 volts, you know, when we were able to produce volume that we never even could see before.

Plus quite honestly, from my own experience. And I think Nick may have experienced this when he was here in Chicago. It's really hard. When you get over 15 to 20 to 25 restaurants, you can really keep up with their orders and the delivery and the financials and the chaos and chefs are notorious for, you know, finishing work at four in the morning and deciding they want to change their order or enter their order.

And after about 20 to 25 of those, it's really, really tough. So the food distributors take care of that for us, and we're able to just sell to them. And then they sell to the restaurants and chefs. Yeah, that's that's I mean, that model is not a good model for many different growing up. And then for others, it's an excellent model.

It really is. And I hope people are listening to this and, and thinking about their own particular situation and seeing how the different marketing sales models will work. But clearly to Mark's point is that you really have to look at, as you're growing, as you're developing, as you're increasing your production is, you know, what your markets are and how does that marketing fit in?

We have a lot of growers I've done it, myself, selling to restaurants. And if you hit a certain size of scale, restaurants of course are notorious for as, as mark said, uh, changing orders, the consistency of filling orders. Yeah. Changes, changes minutes a minute. Um, and that makes it very problematic. Um, everything is a trade-off.

However you sell your product, you know, you sell it direct to consumers or you sell it, you know, wholesale or institutional sales there's trade-offs and advantages to all. So, so it's really critically important to, to look at that and see how that fits. And it's, it's good to hear how, how mark made that model really works with him.

So you started getting your production, you know, up and going and really starting to ramp up. So can you tell us a little bit more now about, about your model and how you use the CA obviously to generate revenue, but also for a lot of other great things within the community? Sure, sure. Um, Joe, one other thing though, to add to what we were just talking about is, um, I think it's critical that, um, that we started out selling individual restaurants and caterers, uh, for a couple of reasons.

And Nick has alluded to this in terms of his background, too. You get direct feedback from the restaurant owners and from the show. And when you're delivering every week or twice a week to a restaurant operation, to a kitchen and the chefs in there cooking and using your product, you can't get better feedback to them.

Your product is good, your product is bad. Or, you know, I'd like to improve this sort of taste or flavor profile that we need out of your product. That's an excellent point. The, um, when we grow for restaurants or we grow for direct sales at farmer's markets, we get feedback. So if that's, if that's part of your model, whether you like it or not, and you're going to hear about, and it really isn't and to Mark's point that, um, even criticisms, um, extraordinarily valuable to you, um, you know, putting your ego aside, listening, it's always nice to hear people tell you how much they love you and how wonderful your products are, but to say, well, this is lacking, or we'd like to see more of this or more of that.

That is extraordinarily valuable. A lot of times the chefs are saying the flavor's too strong. I I've, I've heard that. You know, I think, I think people may using too much fertilizer cause you could over fertilize a microphone. Yeah. So Joanne and Nick has said this repeatedly when he would sell to, I mean, that direct feedback that you get is great and it's not just from the chefs.

It's also from the farmer's markets. Um, personally we can produce and we did for the USDA and there are farmers who, families who practice program. We can produce 180 pounds of micro greens just in this facility right now. And we're only 60% of capacity. So we can produce a lot, a lot of microbreweries.

Um, but when you sell the food distributors, you don't get that direct feedback on your quality. You'll find out a week later that maybe you had sent that something had too much moisture in it or that some product went. There's nothing that beats, that direct contract. And you're absolutely right from a chef.

You may hear the next point it's been strong or too weak. The other thing is they also tell you new products that they're interested in. And I don't want to under emphasize that because they really turned out would be for us telling us where we should be, be begin to think about growing other products.

Um, and that's definitely due on the farmer's markets. Judy and I LA we go to farmer's markets and direct deal directly with consumer and especially with micro greens, because a lot of consumers don't know what micro greens are please do in Chicago. And they explain that to them and explain our process of things is, is really critical and want before I go on that, the last thing though, and I think you you're growing people will appreciate this, um, niggas see me, you have to do this.

Um, my frustration, um, again, I come from an operations or production and efficiency background and, um, my frustration was, and this is going to be a general. Overgeneralization, but farmers love. And I don't blame him at all. Farmers, the plant, the seeds in the soil and watch those seeds germinate and become a plant.

And they love to watch it grow. And then they harvest the plant and they let's say grown two or three or four or five acres or many levels in their agronomic operation. And they harvest everything and they're all goes into the cooler and then they realize they have to sell it all. Unfortunately like a newspaper.

It has a shelf life to it. You know, the great thing at the Tribune was, you know, the newspaper wasn't sold that day. It wasn't going to be good. He had to worry about the next day. And it was that mindset that got me to really think about it. And I really was befuddled at first because it is such a beautiful, wonderful process.

So germinating and growing and harvesting and selling. But the problem is you always end up with a huge amount to sell and if you can sell it all, you. But unless you've started over again, begin go through a gap where you have to germinate, uh, you know, uh, grow and harvest. Um, and so what I was able to do and for my production background, and it really was hard, especially for our employees who were trained in agriculture and people that are in agriculture background is I started from the back end.

And for people who want to get into this from a commercial standpoint and are just starting out, I really recommend this. Anybody who's a large grower already has gone through this process. But what you need to do is start at your backend, which is your sales and figure out who wants what product, when, and then go back as how's it going to get into the cooler and how long does it need to stick in the coolers before it goes bad?

And then you have to go backwards into how long is it going to take to grow that product. And then how long has it going to take to germinate there. So really what you ended up doing from an efficiency standpoint and an operational standpoint is reversing the process. And that was really tough. And I totally understand that for people who really are involved in agriculture, cause if we versus your thought process, but it is that reversal, that thought process that allows you to be able to produce a high quality product consistently on a regular basis.

And without doing that, for example, um, our microgreens take 10 days to grow. Um, when I saw that we were having a harvest, then after 10 days of growth and then we'd wait for another 10 days because the channels are all filled up. And then they, when we harvest them, they all feed on. We, we, we group product.

So every 10 days we'd have this huge surplus. So perhaps in the, in the cooler, um, what I did initially was just basically divide our warehouse or our growing area in half and made it into two, five day cycles, but five days, okay. So every five days, half the warehouse would be moving some product. And that sense of an improved that every two days.

So we're basically getting new product again on a smaller amount, each harvest, but new product coming out into the cooler and being harvested on a regular basis. And that I think is very, very critical if you're going to have sales, um, with customers who want something on a regular consistent basis. So I just share that with your group.

It was a little bit easier for me to think about that from a newspaper background. And it's really tough, I think for, for growers to think about that, cause your first thought is always the beauty and the joy of growing the product and the term and the term behind that is crop. Yeah, no. Excellent, excellent points.

So that's, this is the point where I'm going to recommend that everyone get their rewind blood backup a few minutes and listen to what mark said all over again. Um, that is a critically important part. We, you know, we look at most CA operations, um, very much like an assembly line. You have kind of that starting point and there's as you go down the line, there are certain phases and they have to happen in a certain sequence and with certainty.

And again, we many times there's a focus on kind of the beginning of the process and working through, but you really do have to start at the very end and then work your way backwards. And so starting with your, your finished product out the door door, and sold, and then scheduled backwards accordingly.

And that's the way that you can help one, even out those, those production, uh, abs and floods, if you will, the, the gaps and, and time your, your harvest in your, your production, because you can't really forecast from the beginning and, and work it out through, you really have to stop and look at the end of your process.

And so that's a really excellent point. We've talked a little bit about that before, but when mark said it and the way he said it really illustrated it really well. And another key point is the consistency behind what he's doing is the reason why he's working with distributors. Distributors want consistency.

Uh, sometimes even over quality, they built they'll prefer consistent. Right. Right. And, um, Joel, again, you have a, a very group of people, you and Nick have a great group of people listening to these podcasts. And again, what I'm describing, I think for people who have large growing operations is already a done deal.

And no, but for people who are starting out with smaller operations, a homegrown ones that are beginning to grow and they want to make larger and larger, um, there really is a threshold then that you actually, you really have to think about what I'm talking about. You know, when you're just growing a farmer's market and it's every two weeks or something, it's not a huge deal.

And, um, for us, and I hate to say this, but it's true when you have a large operation. Although Judy, I love going to farmer's markets. We don't go there anymore. And the reason is, is it took two or three people. You have to get up at five in the morning to get all your stuff together for a farmer's market.

You gotta go to the farmer's market. And you'd sell the moon one or two o'clock and then it takes two hours to take everything down and another hour or two to take care of the finances. And so you sell two or three or $400 worth of product. It's wonderful. But the reality is you've spent two or three time, uh, 12 hours each to do that.

And, um, if you're gonna run a business, you've got to think about where it's cost-effective to put your time. And I say that because, although it sounds weird and although we will go to farmer's markets, but we know at that point, we're not doing it from a financial standpoint because we have $5,000 a week in sales.

And when you sell 180 pounds of micro brains, you know, yourself sell five pounds at a farmer's market is great for somebody selling at a farmer's market. But for us, that's, you know, that's not even a decimal point. Um, Sure. Yeah. Mean, we think about, um, you know, in our grow at our, at our expenses, we look at our, our power, our fuel, um, you know, electricity, uh, growing supplies.

We tend to labor costs, but we tend to, sometimes they ignore our time investment or time resource, which is ultimately sometimes the most valuable of all. And so that's a really excellent point. Ain't I don't want to take away from, again, the joy of growing and the joy of dealing with people at farmer's markets and things, because there is a, an internal value to that.

It's just incredibly important, a psychological value to that. But if you're really going to turn it into a business and again, I'll get now into the business side of what we're doing. If you're going to turn it into a business, you've got to make money. And it's important that you think about all your costs.

And Joel, one thing that share with everybody and Nick knows we've done this year is when we first started out with the prototype units. Um, and even when we first started out with our climate control grow room, um, obviously, uh, electricity was a big expense, especially when you're dealing with the climate could go global.

Um, and in my naivete day, as Nick said, uh, you know, Judy being a lawyer and neatly in a production guy, we have no idea how plants work. So Nick finally explained to me, and he said it as simply as he could. He said, mark plants need to sleep. Um, your micro greens needs to rest every day and they need the rest six to eight hours, pretty much just like a human being.

And, um, it was that thought process. When I finally, when Nick finally got me to understand that it's not really sleeping, but the plants do need to rest. Um, that I thought because in the back of my mind, I thought about real time pricing with electricity and, um, what we found out here in Chicago, Is, and it's definitely true in the summer, not as much in the winter, but again, for at least six to eight months of the year.

It's this way. If you think about a graph during the day, um, there's just really a little level of line until about four in the afternoon and a four in the afternoon. There's a little lip around eight or nine, 10 o'clock in the morning of electrical consumption and pricing, but the real blip takes place at about four in the afternoon.

And that that's what people come home from the office, turn on the air conditioners and really get moving. And that lift in pricing and consumption continues until eight at night. And it happens day after day after day. Now the difference in pricing that I want to share with your whole, I guess, which was just incredibly important to me, assuming that you go through a similar type of cycle, as I'm describing is the pricing of the electricity in those non-peak hours.

Is one and a half to two and a half cents a kilowatt hour. Okay. Not to put that into perspective. If I sign up with comment here in Chicago and sign up or sign up as a commercial cost, or I'm going to be paying between seven and a half to 8 cents, eight and a half cents a kilowatt hour for every kilowatt I use.

Um, during this peak time between four and eight, four in the afternoon, eight at night, real-time pricing can go up to 12 cents, a kilowatt hour, 15 cents, a kilowatt hour, 20 cents a kilowatt hour, but then at eight o'clock it drops like a rock actually to do two and a half cents 1 cent, a kilowatt hour. So what we did when Nick finally explained to me that the plants need to sleep and you've got to do something, we trained our plants to go to sleep at two and to get up at eight.

So they'd go to sleep at two in the afternoon and they get up at eight at night and that's when we turn our lights on and we run our lights then from eight at night until two in the afternoon. And I just tell you that totally changed our electrical bill and our whole concept of electricity because, um, instead of being a huge, huge expense, um, it became almost, I don't want to say in material, but it became a very minor expense and made it really easy for us to think about adding, uh, extra growing levels.

For example, our first line that we put in was only five growing levels. The second line we put in with six growing levels. And the reason we did that was because the incremental cost of putting in that six level is really peanuts, especially if you've been avoid. Cause you've got the whole overhead is already there.

Uh, uh, air conditioning everything's already there. So your own, your real own only are the seeds that you put in which really isn't all that much and your fertigation system, which is running anyhow. And then our case, our substrate is Coco. Um, so really the only other expense other than labor would be the electricity.

And if you can get that electrical costs down, as much as we were able to do it makes it a no brainer to add extra levels, work indoor growing. So I just wanted to share that with your, your practice too. Yeah, that's an excellent point. So you're, you're actually employing better horticultural practices and dramatically lowering your input costs at the same time.

I that's the kind of win-win and I like to see, right. And so I just, I I'd advise that for people to consider this real-time pricing again, it was Nick with Nick's help that we were able to do this. So I, I got to give him a lot of credit for that, but again, getting back to our business model, what we wanted to do.

Create, um, to grow products and there's mixed. I grow products consistently, um, and high quality and again, morphed into microgreens. And we've morphed now into this, uh, basically this rainbow mix of product that we have, um, but grow this product consistently and charge a price. Again, we're not the highest price in the market and we know what the highest prices are because we did sell it in the very top restaurants in Chicago, we pay the highest prices.

Um, so we sell our product that we can think about that being a hundred percent and nothing being zero. We sell our product that probably the 70 to 80% level in terms of pricing. So we're not trying to get the most premium pricing, um, but we're trying to sell our product for a premium price. And the reason we're doing that is because we need to cover our fixed expenses.

Um, and we need to be able to invest in our employees and create job opportunities because we've ended up again. Initially, we thought we were going to focus on how you rate just people in this under-researched area of east Garfield park and giving them job opportunities. And we changed over the last couple of years to really focusing on people with felony records.

And, um, we wanted to be able to, um, make enough money so that we could pay the employees, a living wage, give them opportunity. And still have some money left over, ideally to invest in training and development. And there we paying what we, what the investment in the business was. You mentioned about the success it's to me, what really excites me about this project the most is the success behind it, right?

I mean, you have one employee that's been with you. What, how many years is, uh, I don't want to say his name on air, but how many years is that employee been on? And he's been here since 2014. He's been with us since the beginning and Joe, what, what Nick is alluding to is, um, and the success. Again, it's wonderful to talk about achieving breakeven and we've gotten there and done that things, but the success really is the people part of the business because our business has a mission to produce these high quality products, but also provide these job opportunities and give people opportunities that they will have.

Again, when somebody makes a mistake within the bureaucracy and ends up in prison, it's a really, really tough thing to overcome. And, um, the success is, and our first employee, for example, um, these are real-world stories, but again, we talk about success. This is what really happens when they're able to stick with you and grow.

He had had a successful career as a janitor. Did you call the public school system, ended up having some real difficulties and ended up in prison and then a tough prison, um, for a number of years. And he came out and was homeless, went through the breakthrough program from homelessness to job readiness, and we hired him.

Um, his first check I gave him was I think about $90. Cause we were paying $8 an hour minimum wage. Now we're paying on average around 16, $17 an hour. Um, but at that time it was minimum wage. And I remember giving him his check for $95 and saying, well, my boat, you say, what am I going to do with this smart?

And I said, well, you can. And so I know that he said, but there's no place to cash it. You said the nearest bank up this way is four miles that way. And then the nearest other bank is four miles the other way. And if I go to a currency exchange, they're going to charge me $15 the care. So the check, um, and that was first exposure that when you hire people in these tough areas and especially people who have backgrounds, um, it's more than just providing a job at the Tribune.

We were able to just put a help, wanted sign and get people in who were high school or college graduates who pass drug tests, then we're eager and ready to work. Um, people who have come out and had challenges really continue to have challenges, uh, personally and economically. And what we're doing is not just providing jobs, but providing jobs.

I call it providing job opportunities and personal growth opportunities. And in this. Uh, Nick molds as well. We had to work with this employee for months to try to get the bank account situation straightened out so we can actually get a bank account at chase. Um, and ironically, the check was written on chains, but Jason wouldn't cash the check year.

I mean, so at the next point about the successes, you know, we were able to get him a finally a bank account. And then the next thing that we didn't think about is he was going to leave the group living breakthrough, and we wanted to help get them an apartment or SRO Hartman is overstated, a single room occupancy building that was like 500 square feet.

Well, I can't tell you the difficulty. It is to find people apartments. One when they've had felony records, But to listen to original, unfortunately had a record of arson and you can imagine no landlord wants to rent with somebody who's got a fall, any record in the beginning, but then secondly, as a heartsick, when they record and to try to work through that was just unbelievably difficult.

Um, and we finally got him an apartment in LA and worked through and got that going. He has since reestablished contact with his family needs reestablish contact with his children and his grandchildren. He's gotten a girlfriend. It's, he's got a car, he's got a man-cave too. It's wonderful in terms of the growth.

And that's just one example of one employee, but again, it's far more than any, I, I'd never invested that in any employee of the tribute, nor did I ever hear of anybody investing that time and effort in terms of people, but unless you do that, you're not going to be successful. And then a side story of that, just so you show how tough it is for people with this heat.

Cause he couldn't afford it. Pirate verse with bicycling in one of the streets, he was bicycling and it was five blocks from work here was under construction. And so he bicycle down the sidewalk cause he was avoiding the construction on the street. Well, the Chicago police picked him up because it's illegal to bicycle on the sidewalk in Chicago and they ran, they picked him up and they, uh, they, they impounded his bicycle and they ran his record.

Now, unfortunately again, he had, uh, an Ersing conviction and it turns out that sort of like child abuse or whatever it is, uh, child molestation you'd have to register. If you have an arson conviction every year, you have to go to the police and register $5. It takes five minutes, but you have to register.

Well, he had been homeless since the time he had gotten out of prison and he was at breakthrough in their group shelter. So we hadn't registered in. When the police ran his record for bicycling white, black on the city of Chicago, they found out that he hadn't registered. Now, your listeners are not going to believe this, Joe, but this may be unique to Chicago.

Um, they needed to make an example of them. So they impounded the bike and they threw him in jail and they gave him a $500,000. Oh gosh. And, uh, he didn't show up for work who the undersigned warranted. That's a dollar bond. And, uh, his first phone call was to his kids. His one and only phone call that they gave him was to his kids.

So he didn't fall up to say he wasn't coming to work. So the areas, our general manager called us up after a few days and said, he's not showing up for work. It's really a problem because we've been so relaxed. So we, Judy and I being nice, naive, suburban white people said, well, did you call his family in order to call it's his kids, he's got to have practice somebody let's find out.

Um, and you know, do all these wonderful things. And, you know, maybe he's in the hospital and there he had said, no, he said, I could have been dealing with people at the windy city program. I've been dealing with people from out of prison. And he said, the first thing I did is I went to the, when he didn't show up, I went to the cook county inmate tracker system and saw that.

So I knew he was in jail. So I just, I just say that it just probably enough for me, the, what goes on in the real world. Um, and how naive, if you know, an employee doesn't show up for work, you're normally just, they're all concerned personally and things. And yet, if you're in an environment like we are here in east Garfield park, you have a totally different view of the world and a totally different conception.

And he ended up, um, again, my wife and the attorney ended up helping them get out and the judge screw out. The bond and things, and really let the police handle it. But that's the true story of what happens when you start employing people in these areas. And, you know, Nick talks about success. Those are the type of successes that empower us far more than just, um, just the growing, which is obviously critical.

And again, when we sell Joe, we sell, we have to sell in the market. This is the real world we're selling. Cause we're, we're cost competitive, we'll quality, we're consistent. But, uh, the second thing that's just an important to us is providing these gap opportunities with people and his life opportunities for people so that they can grow.

And so our employees, the other employees don't have as dramatic stories, but everybody has been able to improve their life, um, through employment with us, which is what we're trying to do. And we'd love it. If they can go out and get out of their jobs that are higher paying and better skilled than we can give them.

Good, good recommends. We've been very fortunate. I just want to say, and I don't want to be naive because I want people to understand I'm pretty politically conservative. Um, and we're not naive. We've hired people directly out of prison and it's been a problem. Um, when somebody is in Statesville one day and here the next it's such a change in environment, it's really hard for them to adjust.

Um, we've had some real success with people when they get out of prison, go through a four to six month program, working with some nonprofits, they learn how to write resumes and talk about their experiences. And when we hire people, we really look for people who say, Hey, I made and are looking willing to look in the eye and say, Hey, I made a mistake.

Uh, I paid my time. I understand that I need to grow up and do better. I really do need to support the kids that I have or the wife that I have. And I really do need this opportunity. And people have gone through that maturing process. We've had real success. During your prior podcasts, there were a couple of things that are really stuck with me.

And one of those is when you talked about either you or one of your guests spoke about the farmers in Mexico or the farmers in some of the top areas in the Southwest, um, how they could walk into a grow room and they would know within Jordan three minutes, what the status of the growth was. And, uh, you know, what crops were doing well, what crops were doing for late.

And I've got to say, um, I have the same experience when Nick would go a dark road, he would get sniff the air. Now, again, I'm a bean counter. So Sniffen near, doesn't do anything to me, but Nick would sniff the air and he would say, mark, you're way over watering your plants. And this is when we had cut down from watering 24 hours a day to where we were ordering the only, only for an hour a day.

And Nick would still say this from sniffing the air. He would know that there was over-watering guard. Um, and you know, we've since cut down now to where we don't need to water any more than 5, 10, 15 minutes a day at the most, depending on the crop, but it really struck home for me when the person on their podcast.

And it was either you guys or your guests said that is, it gets back to that human point of farming. We were talking about before this podcast began, which is, um, you know, you can have all the technology in the world. You can have all the timers and all the computer equipment things, but unless you have that human involvement, you don't have some basic feedback of things like that.

Like, you know, what's really going on and really impact your breath. So I wanted to dimension that cause that really, um, hit it home to me in terms of how important it was to have people involved. And, and the other part, and you guys have all done this again in your podcast is how important it is to focus on plants and how the plants are we at, you know, what the plants are doing and.

I remember when Nick first came approximate. And he's mentioned this at times during the podcast, during the podcast, um, how important it is, uh, to focus on the people who are dealing with the plants do. So it's not only focusing on the plants and the environment that's supporting the plants and how the plants themselves are responding and specific plants that are responding.

That specific crops are responding at any point in time. Um, but Nick and I thought he was a little goofy at first, because again, this wasn't fitting into my financial background. He talked about how important it was to have a good growing team and to have a team that gets along well, and they have a lead grower, uh, that really knows what they're doing, but also is good with people.

And it is almost like that power that is created from a good team, um, transfers itself to the. And, um, you know, I can't from a financial standpoint, say there's a one-to-one correlation or there's this specifically to that. But, um, Nick is from my standpoint, absolutely. Right. That, uh, how people treat each other, um, and how the team works within a growing environment is critical for the success of the growing operation.

And, but, um, it's important in terms of getting top quality crops and whether it's because people are, are respecting each other and treating each other right. Or it's because in treating each other well, they also treat the crops. Well, I don't know what that is, but I just wanted to say that that too is something that you guys have mentioned on your podcast.

And I really think it's important to emphasize. Yeah, no, no, absolutely. And that, that is held true, uh, holds true all, all across the board. And, and, and just as an aside, I've known Nick for a very long time and I don't think he's a little goofy, so that's fine. I am, I, I will be the first one to admit that actually, you know, it's been crazy for me.

I don't know if this happens to you, Joe, but it's just been happening to me now that I'm, you know, getting close to my fifties, um, the trees are really talking to me and sometimes I don't want to look because, you know, like, I don't want to hear a little weird, but I don't know. I'll leave the age-related jokes alone, but yeah, no, absolutely.

Oh, there he is. And that's, that's one of the, the, the kind of the Razor's edge points about technology is that when we have those tools still the, um, the human connection, the horticultural connection, the farming connection is really so important and, uh, and is really something that we should not lose.

We should really fight to keep, even as our technological tools, uh, improved quite a bit. So, so yeah, I mean, it's, it's great to hear and see, uh, a for-profit, uh, cashflow positive. Yeah. Um, uh, enterprise that is doing so much more than that. And so I hope that everyone today got a lot of, uh, good usable information, a lot of great advice, but also some inspiration as far as how you can now take your growing operation and do so much more with it.

Um, and yes, it can be career. It can be a business, it can be something to generate revenue, but there's really so much more than controlled environment and farming in general is all about. So, um, we're really honored and pleased to have mark today, sharing his experiences. Um, mark, can you tell people how they want to follow you?

They want to get a hold of Garfield produce or see what you're doing. Sure. Maybe some of the best ways to do that. Um, the best thing is, uh, is the email and it's mark M a R k@garfieldproduce.com all one word, or go pull this back down. Uh, so we have, uh, a good website. Um, my phone number and you can call me directly is, uh, one, two, four oh one one five three four.

And, um, uh, we were on Facebook and other things, but again, it's all Garfield produce, but you can get ahold of me directly through email or through the, through the fall. And Joe, the one thing I wanted to say is COVID devastated us. Um, we have been selling, uh, again, primarily to food distributors and only had one small retail operation that we were selling through.

What was an upscale, um, store and then the north side of Chicago. And when Kobe. And again, so that people understand, and it was the old news for the experienced growers, but for new growers, there are very few, if any long-term contracts and growing all of our sales are basically week to week, or we get an order and fill the order.

And on March 15th, we had been, we went from $5,000 a week in sales to $295 a week. So I just wanted to put that into perspective, um, so that people understand how devastating these COVID was for us. Now, it was devastating, not only because of the sales end, Joe, but you had mentioned that we were financially in good shape.

And we were, we had finally, um, from December through March of last year, we had finally gotten the operational grade. Which for us was just absolutely critical. And again, when we got there by getting around $5,000 a week in sales, and we were anticipating about another thousand dollars a week coming in on the next month or two, so things really, really rosary.

Um, so what devastated us with COVID was not only that we lost all the sales, but the momentum that we have been building completely got destroyed and undercut. Um, and, um, we tried business pivots like everybody else did. We tried growing different crops. We do have lettuce and kale growing here. We tried direct sales to consumers.

We tried, um, dissipate into farmer's markets online. We tried to actually deliver an online. So we've tried everything. Uh, we were saying quite a bit by the DPP programs and the E I D L loans and things. Um, but we're still only about 45 to 50% on the revenue side that we would like to be in where we weren't before.

So we still have a ways to go. I don't want to have people leave. We're Fenton Gampy here. Um, we're back where we were prior to COVID in terms of, um, not only rebuilding the sales, but we building the momentum, um, that stores here in Chicago, the restaurants have just reopened now. But again, these high-end restaurants that use microgreens really depend quite a bit on the tourist trade and quite a bit on visitors.

It's not just going to the restaurants, but people in Chicago. So I really think we've got a tough road ahead of us. And very realistically, it's going to be months and months and months before the microgreen business for us comes back. Um, but we really, we had a trade off and again, for people who selling, there's always a trade off between selling directly to consumers.

The issue there though is that you're selling in a lot smaller quantity or item. And, uh, for example, a typical person would use one or two monsters, or microgreens in terms of wanting to buy that a week at the most three or four hours. Um, you know, food distributors will buy a hundred pounds of micro greens.

So there's a huge difference in terms of the quantities there. And it's really a different model for us. It's a totally different model for us. People will let us in pale, especially in these channels that we have that are not set up. I don't have inflow system. So we've had to really, um, do a lot of experimenting and a lot of bootstrapping to get things done.

So I just didn't want anybody to think that we were either home free or that we were fat and happy right now because we still need help. Um, we still need to get ourselves back. Um, in retrospect, I think sticking with micro grains, which is our bread and butter still was a good move that we would give us that we made and the attempts that we tried to do other things.

But again, we're just really hoping that the microbrewery market comes back strong. Sure. Excellent. Okay. So an amazing story and a lot of very important lessons there. Pick any last minute questions. No, um, yeah, I do actually have one what's coming next. Yeah. Yeah. I was sitting here since you're a regular a w what would you ask you?

What would you give? What kind of advice would you give your younger version of yourself? Well, Mike, I thought about that, cause I knew that was coming and I knew you anyhow. So that was good. Um, I spent my entire career in finance, you know, up until I failed that retirement and became a farmer. Um, and in finance, your product will be very risk averse by and large.

You're always taught to take the safe way out. You do analyses and things, and you always figure out what's the most cost-effective, uh, least risky. And in my career, I pretty well followed that I, uh, took very conservative choices in terms of careers and jobs that I took and, and I was successful at it.

So I don't want to downplay that. It was, it was a wonderful career. I had a great time at the Caribbean. I had a great time at Pricewaterhouse. I really enjoyed the financial background that I had, and that's been incredibly helpful for me, but what I've emphasized now to my son, then what I would tell myself now, uh, my 13 year old self is, um, be open to taking risks and be open to taking career risks.

Um, don't be high to bound just because something seems to be safer than something else. Um, go with what you enjoy, go with what's a passion for you, um, and take a risk on it. It's hard to say this when you're in 20 years. But your career is going to be 40 or 50 years in process and a year or two or six months or a year working at something that doesn't work out.

Isn't the end of the world at all. And if you are skilled, then if you have a positive self worth, you're going to be able to get some other opportunities and, and not really suffer any dramatic consequences. So that would be the advice I'd give myself is don't be afraid to take the real risks and, and don't always go with, what's just the most safe or most conservative.

There are a lot of options out there, and it's no problem at all in terms of granting for those options and maybe not being successful, but then pivoting and doing something else. Excellent. Well, Thomas, thank you so much, very much for your time today for thank you so much for the work that you're doing.

Um, obviously I encourage everyone to keep following market Garfield produce and, and, uh, following their progress. And, uh, if you're in the Chicago area, supporting them in any way you can. So, uh, thanks very much again for your time, mark and Nick, and also for, for all of your time, listening to us today, we, uh, we thank you again for joining us and, uh, we look forward to speaking with you again, so have a great day, everyone.

Thank you. Thank you.