Soup-to-Nuts Podcast: Steward’s novel lending model reinforces supply chains for regenerative, regionally produced ingredients and products consumers want

And while some large suppliers and manufacturers are piloting programs to source regeneratively farmed ingredients and encourage adoption of the practices by paying farmers a higher price, many small and emerging CPG companies founded with a sustainability mission lack the ability to front farmers capital or guarantee purchase of specialty or regeneratively grown crops at a premium price without financial aid.

Enter Steward​ – an online community-lending platform that “empowers individuals to support the ecological and economic regeneration of their region” by aggregating investments as low as $100 or as high as $500,000 to create loans for regenerative and regional farming projects and businesses. This includes farmers who need to upgrade their equipment, improve their infrastructure or buy land, as well as CPG companies buying regeneratively or regionally produced ingredients.

In this episode of FoodNavigator-USA’s Soup-To-Nuts podcast​, Steward Founder Dan Miller shares the financial challenges facing regenerative and regional agriculture stakeholders – from farmers to brands – and the unique solutions that his platform offers to create business opportunities across the value chain that are ecologically and economically resilient. He also shares why alternative farming methods and biodiverse crops are critical long-term to feed the growing population, protect the earth and build resilient businesses.

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Filling a funding gap: Steward offers an alternative financial solution for alternative farming​

When Miller founded Steward in 2016 “regenerative agriculture” was not yet the buzzword it is today, but he says he created the platform to address a need in his mother’s hometown in Eastern Maryland where farmers struggled to make ends meet even though all their acres were planted and where agricultural practices were depleting the soil and polluting the nearby Chesapeake Bay.

As an example, he recalls an area farmer who grew heirloom fish peppers to season seafood, but who could not obtain traditional funding from USDA or a bank loan even though he had a commitment to buy 100% of his crop.

“There was no global commodity price for fish peppers, and [the bank] underwrote zero income – even with existing contracted sales,” because it was not familiar with the crop, Miller said.

“That story always goes to the heart of what Steward is created for, which is that the financial system has designed itself around the conventional agriculture policy, and so there is enormous amounts of money available if you are just doing large scale commodity crops and conventional practices selling through the normal elevators and chains…. But if you are outside of that model … you are really cut off,” he said.

He explains Steward quickly grew beyond just farmers to include stakeholders farther along the value chain – including CPG companies – that could trace their products back to the farm and which support regenerative and regional agriculture.

For example, buckwheat-based brand Lil Bucks recently secured $560,700 on Steward to purchase buckwheat and sunflower seeds from a Regenerative Organic Certified (ROC) farm in Minnesota, a ROC maple syrup and ROC coconut products.

Steward also noted Philadelphia-based The Pasta Lab raised $62,700 in 2023 to buy equipment necessary to go from a small fresh pasta business to making dried pasta it could sell wholesale and into food service. The company sources exclusively from regional producers, including a free-range egg producer that also borrowed funds through Steward.

“My view is, if you can trace the product back to a farm and have traceability all the way to the product, we will fund it,” said Miller, adding, “Whether the value-add happens on the farm or with a processor or with the chef at a restaurant or with the CPG company, it is all steps of adding value to the agricultural product for the end purchase.”

Steward’s investor base shares a personal interest in regional, regenerative ag ​

At first blush, Steward may look like other crowdfunding websites where businesses post projects with rewards, launch a marketing campaign and hope they meet their fundraise goal before their deadline. But Miller explains Steward is lending business that sells loan participation to an investor pool that is broader than those typically tapped by conventional lending businesses.

Steward offers three products to investors: individual loans to specific farms or businesses that investors can hand select to support, portfolios of projects for those who are interested in a more diverse opportunities and do not have time or interest in choosing individual products or a chance to invest in ownership of Steward’s lending arm or platform.

Steward’s investor base is diverse, including individuals who invest as little as $100 and family offices that may earmark $50,000 or $100,000 for a deal. But they all share a personal interest in supporting regenerative farming and regional food systems and so are willing to support unconventional practices.

In return, they earn interest on the principle at a prime rate with Steward taking a half percent per year from lenders. Steward also charges a loan origination feed that is paid at closing and which ranges from 2% to 3% of the loan.

“We want to draw real amounts of capital by having what we consider fair deals,” Miller said.

Application process mirrors that of a bank, but with more support from Steward​

Miller explains regenerative farmers, CPG brands sourcing alternatively produced ingredients and other stakeholders interested in accessing funds from Steward apply for a loan just like they would at a bank, but they can expect a more engaging, intentional and involved partner with Steward compared to a traditional lender.

Steward evaluates loan applications from a financial perspective as well as through an agricultural lens. When it agrees to underwrite a loan, it prepares a term sheet, structures the financing, and prepares the loan documents in a way that is “as normal as possible,” said Millar.

It then raises the money by posting the opportunity on its project page, including information about the business, the practices and the financial elements.

Not even 10 years old, Steward is growing quickly and Miller is excited about upcoming investments that are larger and have a more regional focus. He also is optimistic that as more regenerative and regional farms are financially supported and more products that support them come to market that consumer demand also will continue to increase and a new food system that is better for stakeholders across the value chain as well as the planet will emerge as a resilient and appealing alternative to the current model.