Nourish DC: Grants Help Diverse Food Entrepreneurs Flourish
Launching and growing a food business requires significant upfront investment – but obtaining the funds to get one off the ground is a challenge for many start-up founders. This is especially true for diverse entrepreneurs, who face systemic challenges in accessing business funding, including grants and loans.
That’s where the Nourish DC Collaborative comes in. Since 2021, it has deployed $935,000 in grant funding over two rounds to 22 diverse-owned businesses (15 of which are also woman-owned). In addition to these grants — which are rarely an option in the food industry — Nourish DC has offered $15 million in loan financing and $625,000 in funding to help partners increase their technical assistance and lending capacity.
Funding That Fuels Communities
Nourish DC grants are available to D.C. businesses ranging from grocery stores to urban farms, food processors, and restaurants that increase access to healthy food and create high-quality jobs in the community. All current grantees are located in Supermarket Tax Incentive Areas (neighborhoods with poor access to groceries and fresh food), primarily in the District’s Wards 5, 7, and 8.
The grants can be a lifeline for founders in the early stages of starting a business who may not qualify for loans.
“Many of our grantees are receiving their first grants, which gives them the confidence and validation to grow their businesses,” says Alison Powers, director of Economic Opportunities for Capital Impact Partners.
Since community members are better placed to understand their neighbors’ needs than funders, Nourish DC grants are responsive and inclusive, allowing recipients to direct the funds in the ways that will most benefit their businesses and communities.
Grantee Story: Turning a Family Food Tradition Into a Business
When D.C. native Patrice Cunningham lost her job as chef and manager of a Korean BBQ restaurant in the District at the start of the COVID-19 pandemic, she saw a moment of opportunity.
Cunningham held an MBA and had long dreamed of starting a business that celebrated the foods from her blended Korean and African-American heritage. In the summer of 2020, she landed on a plan: selling fresh kimchi using her mother’s recipe. With the U.S. market for kimchi — a traditional Korean dish made of salted and fermented cabbage and other vegetables — valued at $70 million, Cunningham knew that her idea had potential. But securing funding for her new business, which she named Tae-Gu Kimchi for her mother’s hometown in South Korea, wasn’t so easy.
Facing Financial Headwinds
From the start, Cunningham hoped to create a national brand and see Tae-Gu Kimchi on grocery shelves across the country in stores like Whole Foods and Trader Joe’s. But when she lost her job, Cunningham only had $500 in her bank account. To cover start-up costs, including licensing fees, supplies, packaging, and commercial kitchen space, she accepted a loan from a friend and maxed out her credit cards. Her mother pitched in to buy ingredients and help her make the kimchi.
Cunningham’s initial weekly sales at farmers markets were enough to cover ingredients for the next week’s batch of kimchi — but her reliance on revenue meant she couldn’t scale up or work toward her goal of getting her product onto store shelves.
The obstacles Cunningham faced weren’t unique. In addition to difficulty accessing credit, diverse-owned businesses nationwide hold fewer cash reserves and report lower first-year profits, factors which can curtail a business’ ability to grow and even to survive long-term.
But when Cunningham was awarded a $45,000 Nourish DC grant in early 2023, Tae-Gu Kimchi’s trajectory changed quickly.
“It was like winning the golden ticket,” Cunningham said. “It was pivotal because I was ‘bootstrapping’ at that point. I had all these costs, and I had run out of packaging.”
Preparing For Scale
With Nourish DC grant funding in hand, Cunningham went from selling kimchi at four farmer’s markets per week to 15. She purchased a truck, additional tents and tables, more packaging (featuring a brand redesign), and commercial refrigeration space. She also immersed herself in courses and programs about everything from packaging to pitching her product to grocery stores.
Since Cunningham’s mother had always made kimchi from memory, one key challenge was scaling her recipe. Cunningham carefully documented her process and the exact mix of ingredients that made the kimchi stand out. “That taste is something you can never forget,” she says.
Growing Within the D.C. Community
When small businesses succeed, they create a rising tide that lifts those around them. Nourish DC grant recipients don’t just provide their communities with additional food options, but also with job opportunities and chances for neighbors to get to know one another.
In the last year, Tae-Gu Kimchi’s growth has allowed Cunningham to build a sales team of nine employees and a kitchen team of three in addition to herself, expanding the Nourish DC grant’s impact. She also used to grant funding to dramatically scale up her farmers’ market business, going from four markets per week to 15 and hiring a company to set up and manage these. This gave her more time to pursue grocery sales channels, manage online sales, and develop content for social media.
Cunningham has deep appreciation for Nourish DC and the support she received. “They understand that DC is a big food scene right now and so many people are starting food businesses,” she says. “They give businesses the opportunity to make it.”
The Nourish DC grant had the desired impact. As of 2023, Cunningham’s various sales channels — farmers’ markets, grocery stores (her products are sold at two Dawson’s Markets in the DC area), and online sales — are consistently producing revenue of $15,000 to $20,000 per month, with a few months spiking upwards of $30,000. Local customers also can pick up the kimchi at her Ward 5 location or have it delivered.
Now, Cunningham is looking for the capital to fuel her next round of growth, which will include building her own kimchi kitchen/production facility, identifying a co-packing partner, and making inroads into retail channels. “I’m going to take this as far as I can,” she says.
