Local food business Real Food Connections is shutting down after its president and co-owner said efforts to find new investors to bolster the declining operation failed.
In a release to shareholders Wednesday night Levi Lawrence wrote, "I sincerely regret to inform you all that Real Food Connections is closing its doors after six and a half years of effort."
The company's Saint John location on Canterbury Street, where it shared a renovated space with Picaroons and Buckland Merrifield Gallery, was closed Wednesday. A sign on the door read: "Closed for the day, November 30 -- sorry for any inconvenience."
The company distributed and sold locally produced products and food, with retail stores in Fredericton and Saint John and a grocery box program in Moncton.
"Over the past month I have been working with possible investors, government departments and other possible partners to 'pivot' our operations to be more unique, compelling and competitive," Lawrence wrote. "My final attempts and efforts were declined at the end of last week and it became very clear that we were not going to pull out of this and that we needed to make the hard decision."
Business not easy
Keith Brideau is the president and co-owner of Historica properties, which owns the building that houses Real Food's Saint John location. He said Lawrence notified him last Friday they would be stopping operations.
"It's not an easy business," he said "The margins are really slim. You're up against some big players like Loblaws and Sobeys and Costco... There's not a lot of room for error. And in this case when you're a small player up against some of the biggest players in the country it makes it hard to compete."
In 2014 the company launched a crowdfunding campaign to expand its business and raised $270,000 from 181 investors, but in recent months it's had a hard time staying afloat.
"We have been having some troubles and working on a variety of solutions," Lawrence wrote. "Our sales have continued to decline and we lack the resources to make the necessary changes."
Lawrence wrote that his family will take a hit with its personally guaranteed debts and a remaining balance to the Canadian Revenue Agency.
Unable to pay vendors
"We are also not going to be able to pay our vendors back in the process as they are a lower legal priority to our other creditors."
The company received a series of government grants to build its kitchen and cold storage facility, which it opened in 2015, including $27,260 under the federal government's Assurance Systems Program and $10,840 under the Market Development, Product Enhancement and Diversification Program and $16,890 from Opportunities NB to support capital costs.
"I know that this is a disappointing result for you, please believe that," Lawrence wrote to investors. "I hope that this does not ruin your support or faith in future small businesses and our local food producers."
Brideau said Lawrence and his family put their heart and soul into the business.
"The last thing (Levi) would want to do is shut down that business because he really believed in it and felt that it was something that New Brunswick and the Maritime provinces really needed."
On Nov. 9, the Northampton Brewing Company announced another collaboration with Real Food Connections: The Roundhouse, a Picaroons taproom with a real food cafe by Real Food Connections. The opening date for the Roundhouse has not been announced.