Traditional lending institutions were not the silver bullet. GreenFruit chooses Silo to propel their product forward.
Case Study
Opportunity meets preparation.
“Coming from the banking world, Silo's approach to underwriting is built for this industry. They helped us secure financing quickly, securely, and we’ll continue to partner with them.”
Donald Carter
Chief Financial Officer at GreenFruit Avocados
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GreenFruit Avocados
When GreenFruit Avocados established their business five years ago, their team was determined to make a name for themselves in the avocado marketplace. By establishing a strong team with 10, 15, 20 years of relationships working with major retailers, they've built a team dedicated to doing 'the right thing' and as a result, have earned a top BlueBook rating, and the infrastructure to support and execute on their dream of bringing Colombian avocados to the forefront of the US market.
Location
Newport Beach, CA
Team Size
10
Their Goals
To establish and manage a location in Texas while increasing productivity and awareness around their Colombian orchards.
Special ingredient to share
Bacon Guac Bombs provide every event with a burst of flavor. They are keto friendly, and incorporate one of the best healthy fats around. You guessed it–Avocados.
Step 1
In a large bowl, combine all guacamole ingredients. Stir until mostly smooth (some chunks are OK) and season with salt and pepper. Place in the refrigerator to firm up slightly, 30 minutes.
Step 2
Place crumbled bacon on a large plate. Using a small cookie scoop, scoop guacamole mixture and place in bacon. Roll to coat in bacon. Repeat until all guacamole and bacon is used. Store in refrigerator.
Ingredients
12 slices bacon, cooked and crumbled
For Guacamole
2 avocados, pitted, peeled, and mashed
6 oz. cream cheese, softened
Juice of 1 lime
1 garlic clove, minced
1/4 red onion, minced
1 small jalapeno (seeded if you prefer less heat), chopped
2 tbsp. freshly chopped cilantro
1/2 tsp. cumin
1/2 tsp. chili powder
Kosher salt
Freshly ground black pepper
When opportunity meets preparation, GreenFruit chooses Silo to propel their product forward.
The Challenge
As the market shifted on Mexican avocados, GreenFruit had an opportunity to expand their Colombian product through a retail partnership. However, increased prices created a financing challenge that created a potential blocker to GreenFruit fully executing on this market opportunity. Standard lending opportunities did not provide a solution that made sense for the business, leaving GreenFruit looking for out-of-box solutions.
The Solution
While banks were willing to provide GreenFruit with traditional financing options, Silo offered a more competitive rate based on their product and market potential. Through a quick, produce-forward review process GreenFruit was able to execute on a fast moving market opportunity. A combination of Silo’s funding and the GreenFruit Team’s preparation and hard work, secured new business with Big Box Retailers, launching them into a top position as a Colombian avocado supplier.
Because Silo is laser focused on the produce industry, their team took into account the seasonal patterns, industry trends, and the overall health of the business––not just last month’s books.
The Results
Secured New Business
Secured profitable new business with well known big box retailers
Top Supplier
Increased their position as a top supplier of Colombian avocados
Increased Volume by 40%
Successfully increased Colombian load volume by 40%
Read the Full Story
A growing company gets its chance to take on century-old competitors
Opportunity knocked, and GreenFruit Avocados answered. Positioned with the opportunity to move more volume than they had ever done before, capital was a barrier to executing on a long-term strategy. While traditional lending institutions were not the silver bullet, GreenFruit thought outside the box, and through a close partnership with Silo, they were able to make their play — and practically overnight, became one of the top importers of Colombian avocados in the country.
Founded just five years ago, GreenFruit has been focused on increasing market share while growing its business in the face of overwhelming competition from established companies.
"We're competing against companies that have been around for 50 to100 years. Even though we don't have the years as a business, we have employees with the equivalent experience— they live and breathe avocados," said Donald Carter, GreenFruits CFO.
Using their deep relationships with growers and retailers, GreenFruit has steadily grown the business, turning a regular profit. "We're profitable. We're healthy. We've grown our sales numbers by at least 5 to 10 percent per year," says Donald.
Their advantage: Colombian avocados––a fresh new resource to the produce industry.
GreenFruit’s infrastructure and logistics are strong, and they've been preparing to make a push for contracts with larger box retailers for some time now. Their advantage: Colombian avocados––a fresh new resource to the produce industry, and one that has been establishing a competitive edge with the likes of the incredibly popular Californian and Mexican avocados, as their prices rise and wildly fluctuate in the market, making the financing of them complicated.
When market prices are stable the selling process is smoother. But when prices fluctuate, that instability creates its own set of challenges.
"While some suppliers require advanced payments, we also have a goal of always paying our suppliers per PACA guidelines. Finding interim financing to fill the gap between payables and receivables is important in executing on growth opportunities.”
I'd been calling banks, reaching out to partners, and searching for out-of-the-box solutions that made financial sense for our business.
Opportunity knocks… ahead of schedule
GreenFruit could have continued this balancing act, but then, years ahead of schedule, the Colombian growers were ready to come to market––in a big way.
The financing can't outweigh the benefits.
There was a need to secure additional capital to fund the Colombian inventory upfront — capital tied up in AR turnarounds and advance payments to GreenFruits other existing suppliers. Carter, being the proactive CFO that he is, was determined to line up back up plan, after back up plan. "I knew this opportunity was a possibility for close to a year. In preparation, I'd been calling banks, reaching out to partners, and searching for out-of-the-box solutions that made financial sense for our business. The financing benefits can't outweigh the profit margins.”
Although banks are a long-time partner to the industry, traditional banking and financing methods simply don’t take into consideration the rising prices of avocados, or the opportunity that laid ahead for the GreenFruit team. This was something Carter was well aware of, having worked in banking himself.
I have 10 years as a credit writer at Washington Mutual and a couple other banks. I’ve learned a lot from being on the other side of the chair. Regardless of rising prices, your credit line will always be based on last month's AR.
Silo's processes are flexible and work within your existing margins, while respecting the seasonal rhythms and inherent unpredictability of the business.
Silo Capital steps in
Carter came across Silo at a trade conference, where he explained his predicament to a member of Silo’s team––an impromptu conversation that turned into a timely partnership. A few consultative phone calls later, GreenFruit had the funding they needed. Because Silo is laser focused on the produce industry, the team took into account the seasonal patterns, industry trends, and the overall health of the business––not just last month’s books.
A few consultative phone calls later, GreenFruit had the funding they needed.
With the capital they required, GreenFruit was able to make an enormously successful investment in its Colombian suppliers. “All of a sudden, just literally like overnight, we were able to secure the inventory to meet our demand and make our customers happy,” says Carter.
We not only see this as a success for GreenFruit, but the entire team we employ and the farms we support.
The additional financing we were able to secure through Silo’s program helped us make our opportunity a reality. In one week our inventory volume grew by 33%.”
This isn't some generic fixed-rate loan, but an ongoing relationship that fosters communication and flexibility.
The conversation with Silo is ongoing — this isn't some generic fixed-rate loan, but an ongoing relationship that fosters communication and flexibility–just like the relationships between distributors, suppliers, and retailers. “Silo’s program is flexible and grew with our business. It’s a real partnership that’s fluid,” says Carter.
A small company trying to make inroads against well established competitors will rarely have the kind of capital it needs to execute on opportunities like this one — especially when the ‘say-so’ banks on hand don't fully understand how the produce industry really works. Silo's technology and capital offerings are an alternative to the rigid infrastructure underpinning many produce businesses, and Silo’s approach reflects their close familiarity with the sector.
Silo's processes are flexible and work within your existing margins, while respecting the seasonal rhythms and inherent unpredictability of the business. In GreenFruit's case, this not only meant understanding that their company was healthy and more than capable of fulfilling its obligations, but that their needs were evolving as quickly as the market it operates in.
