Open for Business: How This Grocery Supplier Kept Fruits and Vegetables Flowing to Consumers
In March, consumers rushed to grocery stores to fill their refrigerators with food.
The ongoing coronavirus pandemic has forced millions of Americans to remain indoors.
While grocery stores remain open, surging demand has limited the available supply of all foods, especially fresh fruits and vegetables sourced from around the world.
That’s where Urban Farms comes in.
The Florida-based company that helps supply grocery stores in a hyper-competitive market.
The bulk of its sourced products end up on the shelves of retail stores like Walmart, Country Fresh, and Giant Eagle.
As coronavirus spreads across the country, the competition for fresh foods has increased in the retail industry. One of the company’s key challenges is the need for cash on demand to quickly purchase products from growers in the United States and abroad.
Urban Farms needed a lifeline to ensure they had the cash they needed to keep fruits and vegetables flowing the U.S. stores.
Cash is King
When supply is tight and demand is high, Urban Farms Vice President of Sales Danny Letsinger says that cash is king in this business.
“The companies that can pay for the product are the ones that get it,” Danny says.
Relationships between buyers and growers can be quite fickle in periods like these. No one is going to set aside product if they can get the price they want now. That means that sourcing companies need to ensure that they have the cash flow they need at all times, especially when sourcing from places like Mexico.
“When these growers bring the product to the border to customs, they need to be paid at that moment,” Danny says.
Urban Farms caters to a variety of high-demand retail outlets by working directly with brokers.
Though the process of working with brokers is transparent, they might have to wait 60 to 90 days for payment. Even Walmart, the largest grocer in the United States, takes more than a month to pay its suppliers. Facing long payment delays, the company needed an effective solution that would allow them to get paid immediately, on their terms.
How Urban Sales Maintains Strong Cash Flow
Urban Farms partners with FundThrough to ensure that they always have the working capital to source the products that they want from farms.
The company quickly and confidently funds its outstanding customer invoices with FundThrough’s Pro Invoice Factoring. Urban Farms uploads its invoices in the morning and receives the working capital it needs on the same day.
“This relationship has been incredible [with FundThrough],” Danny says. “Every day, we know if we can sell the product to stores, we can pay for it. It’s great to know that we have confidence in a partner that we can rely on for funding. Knowing that we have that ability heading into this rush of business is incredible.”
Danny says that FundThrough has provided a lifeline that has “insulated” his firm “from a major catastrophic event.”
“If I had to rely on a line of credit with a bank, I’d be terrified right now,” he says. He explained that there is too much uncertainty around how much credit banks can lend in this current crisis.
Using Pro Invoice Factoring instead of traditional financial options ensures that his firm is able to meet demand from his much larger customers who set their own payment terms.
About 90% of products sourced by Urban Farms winds up in Walmart, Hickory, Country Fresh, Giant Eagle, and other major retailers. The firm anticipates that it will continue to see strong demand around the country, and Danny knows that the market will remain hyper-competitive.
By funding his company with existing invoices from these larger clients, he always has access to quick, easy working capital and doesn’t need to worry about chasing down payments.
“We’re nimble to make the most of these opportunities because we have this partner in FundThrough,” Danny says.
Urban Farms has even found success in selling a lot of products in a tight supply that wouldn’t otherwise see the type of demand they are experiencing, including broccoli and green beans. With ready cash flow, Urban Farms can deploy its working capital to secure supplies.
“FundThrough has a phenomenal system. The portal was so easy, perhaps too easy,” he said. “I initially didn’t know if I was going to get funded, but money arrived in my account as promised. With this system, I know that I’m solid. The peace of mind at a time like this is incredible.”
Urban Farms is #OpenforBusiness.
To learn more about how to boost your cash flow, visit FundThrough.com