Investing in a scrappy, for-profit food-distribution startup may not be a typical move for a foundation. However, a program-related investment in 4P Foods fit well with the overall goal of our Food Security Initiative: strengthening and addressing gaps in the regional food system to help make good food more broadly and equitably available.
Founded in 2014, 4P (Purpose, People, Planet and Profit) equally values its mission of creating a just and equitable food system and its bottom line. But as 4P founder Tom McDougall began early-stage fundraising, he learned many mainstream investors were more interested in profitability than purpose.
When he met our Food Security team in 2017, we saw an opportunity for a different kind of mission-driven investment. The Foundation had learned — from others in the local food system and firsthand through the Bainum Foundation Farm LLC in Middleburg, Virginia — how challenging distribution logistics could be. We believed 4P could help address this common pain point, benefiting small farmers/producers, communities that lack access to healthy foods, and nonprofits and other institutions that support these stakeholders. In mid-2018, we officially became partners.
Katie Jones, Director of our Food Security Initiative, says, “It was clear Tom had been incredibly thoughtful in developing his business model. We knew he shared our values and commitment to food equity, and that this partnership could have a broad impact.”
The investment allowed 4P to remove some constraints to growth. It bought a new (and more reliable) truck, tightened up operations and added more cold storage. Expansion of its team helped build its customer base and relationships with community-based food organizations.
The Foundation’s early investment also functioned as “catalytic capital,” helping to bring in other investors. In spring 2019, 4P received a $1.2 million grant from the PATH Foundation to build a new food hub facility in Vint Hill, Virginia. Soon after, 4P completed a merger with Local Food Hub, a nonprofit based in Charlottesville, Virginia. These developments are dramatically accelerating 4P’s business plan.
We’re now seeing the benefits of this investment carry through to other nonprofits and to neighborhoods that lack adequate fresh-food distribution. Compared to most traditional distributors or local farms, 4P is committed to distributing to nonprofits year-round with lower minimum orders and a more flexible distribution structure. 4P is developing collaborations with numerous organizations in the District, including several of our partners. For example, 4P supplies part of the produce used by:
- Community Foodworks, for its weekly Pop-Up Food Hub and Market Share for Early Learners programs in Wards 7 and 8
- Arcadia Center for Sustainable Food & Agriculture, for its Mobile Market, a “farm stand on wheels” that serves 10 D.C. locations weekly
- Dreaming Out Loud, for its network of community markets in Wards 7 and 8
- DC Urban Greens, for its farm stands and pop-up markets in Wards 7 and 8
4P Foods sources food from environmentally responsible farmers and producers across the mid-Atlantic foodshed, sorts and aggregates the food in its Virginia warehouse, and delivers fresh food weekly to customers around the region.
Thanks to a cold-storage unit purchased by the Foundation and located at Washington Nationals Youth Baseball Academy in Ward 7, 4P can deliver and store food (including produce from the Bainum Foundation Farm) there to be retrieved by our partners. 4P also operates the Field of Greens Market at the Baseball Academy concession stand, making it the only year-round farmers market in the ward.
Now sourcing from more than 200 producers and having distributed nearly a million pounds of produce, 4P has made great strides toward its goal of being — in Mr. McDougall’s words — a “benevolent middleman, helping good farmers serve good people.”
“As a foundation, we have the opportunity — even the obligation — to take risks that other investors can’t or won’t,” Ms. Jones says. “That allows us to identify creative ways to support our goals, as we have done through our investment in 4P.”