Hoboken Farms Nets $4 Million in Fresh Funding

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1:26The Cincinnati insurance companies. Let them make your bad day better. Find an agent at c-i-n-f-i-n dot com. Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. According to the U.S. Small Business Administration, the U.S. has more than 36 million small businesses, and those businesses provide close to 46 % of employment in the private sector. And our next guest knows a lot about that. He is someone I've known for a long time. Brad Finkel is CEO of Hoboken Farms. It's a family-owned company, started out in local farmers markets and has grown into a business that sells pasta and sauces all over the country.

2:13And it's taken you. First of all, welcome. Thank you. Great to be here. It's great to have you here. Happy birthday.

2:18Brad Finkel:Oh, thank you. But I have known you a long time And I want to get into how you've gone from farmer's markets to so much more. But I want to also ask you, because you guys, I've been to your, you know, bought from your different stands and so on. Hamilton Park, Jersey City. I have. I have. I have. And so you guys have people out in front talking with consumers all the time. How would you say the consumer is doing right now? I think the consumer is scared. I think the consumer is confused. I think the consumer is trying to grab onto some form of an idea of what they can plan for, and they can't find it.

2:54So being more discretionary in spending, do you see that?

2:57Brad Finkel:Well, in my exact world, I find consumers are not going out to eat to restaurants as much. They are cooking at home, so they're coming to us, but they certainly want unbelievably high quality, and they also want value for their money. You know, I see that too. People aren't ordering food as much here in New York City. They're not getting delivery as much. We're definitely not doing that. I've talked to some folks about this for a couple of reasons. One, the prices have, with all the fees added on, have become incredibly high. So yeah, I think people are cooking more at home. Is this a different, how is this moment different from other moments that you've sort of experienced being in this space?

3:36I know that your business has grown a lot in recent years, but you've had a good eye on the consumer for quite a long time.

3:41Brad Finkel:I started my business in 1992. We participate in up to 800 farm markets a year. That's outdoors, underneath tents, on the street, face-to-face with our consumers. In 2001, we were there during 9-11. Then during the recession, we went through that. This feels kind of like a combination of both. Not just confusion, but fear. This is such a different message than we're getting from the executives of big companies. Yeah, who seem to be still upbeat about a lot of things. Well, I mean, if you're an investor, that's great. But if you're trying to feed your family and you're not going to restaurants anymore and you're going to supermarkets, and if not supermarkets, farm markets.

4:29Brad, you know, it's so interesting because I think about some of the things that we spend headlines talking about. And today's the day where we talked a lot about the Federal Reserve. I'm not going to ask for your view on that.

4:36Brad Finkel:One of the Kevins. Nice. Well done. Well done. But this is why I've loved talking to you over the years. You've also been a real estate investor. You've sold businesses. But it's what really matters when it comes to small businesses. Is it changes in the administration? Is it any of that stuff? Far be it for me to be able to say what matters. But what matters to me is stability. If I'm going to plan for next month, next year, I have to be able to have an understanding of what it is I'm planning for. I mean, for instance, our pasta sauce is, you know, popping up on shelves across the supermarkets of America.

5:17Brad Finkel:Tariffs hit. Our ingredients, our cogs go up. What do you do about that? So as a small business, you know, it is something that hits our pocketbook. Last night I just read a posting from a really well-known restaurant that is closing its doors. And it was really like, I cannot do this anymore. It is just a horrendous place in the country to be able to do something. We saw that during COVID. We were shocked by how many even very well-known chefs and restaurateurs who were struggling, and we thought they would be good. We want to get to your story, because Farmer's Market is where you began. You have tons of Farmer's Markets, and you're doing it in crazy weather and even this weekend in the cold.

6:02How do you get to where you've got multiple, not brands, but jars of sauces, different things, and you've become a much bigger business? You're in a ton of stores around the country. Tell me if I'm wrong, because my daughter said, I think I bought them in London?

6:19Brad Finkel:We do have a couple of places in London that you can buy it at. Smaller independent. In fact, we just got an order from Ireland today. And the tariffs affected. Now all of a sudden there's a lot more hoops that we have to jump through. So I was a teenager living in Hoboken, New Jersey, playing bass in a band, in a van, touring from Hoboken to Maine, down to Virginia, to Memphis, to Nashville, into Austin, Texas. And as you could imagine, that is not a great plan for financial stability. so I was going to Ramapo College in Mahwah New Jersey up Route 17 and I would meet these nice kids who aren't from Hoboken and they would say would you like to come over from my house and I said yes and then I would get a phone call hey my mother wants to know could you bring some mozzarella sure my father wants to know could you bring a baguette some baguettes from Dom's Bakery at Sixth and Grand absolutely and this kept on happening uh and I said to my grandmother do do they not have bread and cheese where they live?

7:24Brad Finkel:But what it was in my sociology class that I heard about was the gentrification in Hoboken had started. These were ex-Hobokenites who had moved to the suburbs, and I started a home delivery service. Literally, if you called me and left a message on my old cassette answering machine on Monday, I delivered to you on Tuesday. If you called on Thursday, I delivered to you on Friday. And I ended up with a couple of hundred customers. One of those customers was a gentleman named Peter Baronio. Peter Baronio became the economic development director for Englewood, New Jersey, called me up and said, we're having a farm market.

7:58Brad Finkel:Would you like to come? I said, what's a farm market? And he said, I don't know, but we're having one. Isn't that crazy? Because they're everywhere now. Well, now they are, but it kind of started as a side hustle. I made a marinara sauce, and that marinara sauce really took off. Now, that's kind of the short story. people would stand online and buy it by the case a very important buyer from Whole Foods saw that line of people tried our sauce and called me up on a cell phone and said we'd love to have you in our stores and I said which one they said all of them across the northeast so that started my journey from farm market to supermarkets across America we're speaking to Brad Finkel founder and CEO of Hoboken Farms.

8:44Here in the studio, you brought a selection of what you do offer. It includes pasta and sauces. How have you been able to keep the taste and the ingredients consistent as you've scaled and gotten bigger? Oh, wow. Were you able to do that?

9:00Brad Finkel:Well, yes. We go to every run. We are there. So we're tasting tests. We're tasting color. We're tasting viscosity. We have sugar content. So if it does not meet those expectations, it gets donated to the Community Food Bank of New Jersey. But I want to go back because I know this. You had mentioned to me that one of the reasons you got into sauce is your customers started asking for it. Because I bought your ravioli and people were like, can I get some sauce? So all day, every day, we sell now hundreds of thousands of loaves of bread and tons of mozzarella and burrata, countless coolers of ravioli.

9:38Brad Finkel:and people would come to us and say, do you have any sauce to go with that ravioli? Nope. Do you have any sauce to go with the pasta? I do not. Finally, a guy, a very Jersey guy, came over and said, hey, dummy, who are you standing next to? And I looked to my right and it was Kurt Alstead from Alstead Farms. There was Dale from Stony Hill Farms. There was Matt from Sherry Grove Farms. It was Doug from Race Farms. Fellas got to get some tomatoes and some basil and we started making some sauce. But you also mentioned that you have to get some ingredients from outside of the US. Well, olive oil. Yeah, I mean.

10:08Okay, so is that it? Is that everything else is from Jersey?

10:12Brad Finkel:We do our very best. You know, our original ingredients came directly from the farm markets. We have to make sure that we have the best tomatoes, the best basil, the best onions. What I think is so cool is, though, it's like you listen to the community or the community says, do this. And then when you go to make sauce, you look around you and you embrace the community to do it. Well, a farm market is both an ecosystem and an incubator, right? So as an ecosystem, you know, I need tomatoes and basil, and there's tomatoes and basil. Okay. Now I want to go to the community because there's a point where you're growing the business, and you've got to think about financing and capital and raising capital.

10:55And again, I feel like the community kind of came to you.

10:59Brad Finkel:Yeah. So we kind of have a one-in-a-million-raised story. It became obvious that the opportunities that were coming our way meant that I needed a bigger boat. So I was ready to kind of start going to institutional investors and the banks of America and telling my story. when word got out to our customers kind of through the grapevine that we were contemplating this, some very savvy investors said, wait, we want to be part of this. They've invested in CPG products before and I didn't have to do any of that. We've only got about a minute left here, unfortunately. And you've raised$4 million in Series A funding.

11:45We have. So where do you go with this?

11:47Brad Finkel:IPO? Sell it? What do you want to do? No, no, no. We are building our business straight down 95, down south to the Midwest. We have Pavilions and Lassen's in California. We have Jewel and Tony's and Pete's in Midwest, Central Market in Texas. We are growing our distribution, certainly also online as well, you know, direct to consumer. Do you plan to expand the products? Yeah, we have pizza sauce coming. We have a couple of other things, but we are a small but mighty group of experts. So I was able to get those economics to bring on expertise and better execution. And that's allowing us to scale across America.

12:33That's why we like talking. It is the backbone of the U.S. economy. Brad Finkel, thank you so much.

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