Robert Schaefer took the next logical step when his garden produced a bumper crop of cucumbers: He made 90 jars of pickles that he gave away to family and friends. When the calls for more started coming in, the chef of 35 years knew he'd hit on something special.
"I never perceived myself as a pickler, but people were calling and asking where they could buy them," said Schaefer of the 2009 experience. "That's when I thought, 'Maybe I have something here.'" The following year when he started his Long Island company, Divine Brine Foods Inc., he was selling three varieties of pickled products at local farmers' markets.
Divine Brine now makes 25 varieties of pickles, chutneys, sauerkrauts and Italian specialties that are sold at 130 retailers and New York City's five largest greenmarkets. Schaefer also recently struck a deal with Landmark Foods. The major food and restaurant equipment distributor on Long Island will offer the company's products to its thousands of customers.
When it came time to expand, Stony Brook University's incubator program connected Schaefer with The 504 Company and the U.S. Small Business Administration's Community Advantage loan program. The Stony Brook incubator has been Divine Brine's production partner since late 2012.
Schaefer accessed a $113,000 loan that he used to buy and refurbish new and existing equipment, pay off high-interest credit card debt, provide working capital to add employees and increase inventory. The loan, which closed in June of this year, also helped pay moving expenses to a larger, 2,500-square-foot warehouse after Divine Brine's previous warehouse building was sold to new owners. Plus, the company created two new positions, bringing the total number of employees to seven.
The Community Advantage program focuses on small businesses in underserved communities, with a goal of driving economic growth and creating jobs. The targeted program launched in early 2011. It provides 7(a) loans up to $250,000 for business acquisitions, leasehold improvements, equipment, working capital and refinancing debt.
Divine Brine was a good fit for the Community Advantage program. Kendro Benjamin, loan program manager with The 504 Company, said the company was considered high risk because it recorded two years of uneven financial performance after Superstorm Sandy forced several greenmarkets to close temporarily during the height of the festival season. The recent agreement with Landmark Foods was expected to boost annual sales and help build a steadier revenue stream.
"This enables their goods to be distributed to hundreds of retail stores," Benjamin said.
Lenders also recognized Divine Brine's earlier measures to cut costs. Before the company began making its own pickles at the incubator, Schaefer was paying a company in Kingston, more than a half-hour away, to make those products. The move shaved the company's manufacturing costs by 20 percent.
"It was costing the bottom line because it added a middle man and travel expenses," Schaefer said. The Stony Brook production facility is also closer to the local farms that Divine Brine uses for the cucumbers, cabbage, spices and other produce that go into his all-natural, chemical-free pickled foods.
Revenue is on target to increase 20 percent in 2014, due mainly to the company's ability to access Landmark's customers and increase inventory to meet the increased orders.
Kendro Benjamin of The 504 Company with Robert Schaefer of Divine Brine Foods