Capital Ideas

By Glenn Cheater
Source: atlanticfarmfocus.ca


Mike Fata

High grain prices haven’t just strengthened the balance sheet, but brought an infusion of youth into a sector where 40-year-olds are considered young farmers.

But with prices down, will ambitious young people find dad and mom aren’t so open to new ideas?

Mike Fata hopes not.

 “Farming is no different than any other business — innovate or perish,” says the CEO of Manitoba Harvest Hemp Foods. “The younger generation isn’t intimidated by change and are willing to try new things and innovate. So it’s good to see farmers in their 20s and 30s being aggressive in pursuing growth opportunities.”

Aggressive is easier in prosperous times. These days the next generation’s ambitious plans to expand, acquire cutting-edge technology, or move into new ventures or crops may elicit a curt ‘not now’ from the parents.

Fata faced similar scepticism when he was a passionate, but totally inexperienced, 21-year-old bent on making hemp the next big thing. Seventeen years later, Manitoba Harvest Hemp Foods (www.manitobaharvest.com) is indeed big, with annual sales topping $50 million and still growing by leaps and bounds.

His experience holds lessons for any ambitious young producer wanting to push the envelope and facing resistance.

Passion is always key, and Fata had more than most. As a teen, he weighed nearly 300 pounds and “not fitting into the social scene at high school” was a big reason why he dropped out after Grade 10. In his bid to lose weight, he went on fad diets with no fat allowed, exercised like crazy, and promptly suffered serious health problems.

That’s when he learned about good fats, and that hemp was an excellent source of Omega-3 and Omega-6 essential fatty acids. Hemp seed became a key part of his diet, and fuel for an exercise program that allowed him to get — and keep — his weight under 200 pounds.

Cue the creation of Manitoba Harvest Hemp Foods, which Fata started with two partners, and critically, the support of his mom. But others figured it was doomed to fail. After all, Fata wasn’t just launching one business but three — a hemp processor, food manufacturer, and marketing company trying to create demand for an obscure product (wrongly) linked to its cannabis cousin.

 “As I look back, I wonder if I had had a business degree and understood what a challenging landscape we faced, whether we would have taken the risks we did,” says Fata. “I don’t know. But I guess there’s value in being young and following your passion instead of worrying about the odds.”

Today, products such as Hemp Hearts (raw shelled hemp seed) and Hemp Protein Powders are in the big grocery chains, but Fata started out with hemp oil and cold-calling small health-food stores in Winnipeg.

 “I wandered around with some taster spoons and a bag with the hemp oil and some sales literature,” he says. “My pitch was ‘You’ve got to try this. It’s nutritious and tastes really good.’”

It was a start but wouldn’t have been enough if Fata hadn’t taken it to the next level. And that’s his first piece of advice: Turn your vision into a business plan.

 “After those first couple of years when we went from credit cards and loans from friends and family out into what I call ‘the real world,’ I was able to speak with ease about where we were going and the opportunity,” he says. “You need a strong story, but also a strong financial story. What are the costs? What sales levels do you have to reach? How much cash will you burn?”

Next up should be “small wins,” he says.

 “Young entrepreneurs need to prove themselves. Then people — whether that’s your parents or mentors or lenders — are going to have more trust in you.”

The two things are intertwined. A key milestone for Fata was convincing 20 Manitoba hemp growers to become shareholders, each putting up $20,000 towards the company’s first processing plant (it had been producing batches at a food development centre).

Finally, he says, know your strengths and weaknesses.

 “Sometimes ego gets in the way and so it’s important to identify those things you’re not good at and build support around you,” says Fata. “I don’t have a university degree, but I had a lot of professors — it’s just that they were people in the industry that I could ask for help.”

That group included other young entrepreneurs in the health food sector, and Fata is quick to add you need to share your learnings, contacts, and experiences to make it a win-win.

The bottom line?

Sure, your parents might be risk-averse. But if you don’t have a sound business plan, some sort of track record, and a strong support network, can you blame them?

Farm Credit Canada enables business management skill development through resources such as this column, and information and learning events available across Canada.