It’s hard to say what’s more surprising about Ruth Klahsen: That 1,000 of her customers loaned her a half-million dollars to build her own cheese plant, or her blunt assessment of her wares.
“Our cheeses aren’t good enough yet,” says the plain-spoken proprietor of Monforte Dairy Company.
“We have so much to learn, and not just us. I think Canada is under-skilled on an artisanal level because we don’t have the long history of making artisanal food and we haven’t had places to learn how to do it.”
Although Monforte cheeses (monfortedairy.com) are highly acclaimed and served in some of Toronto’s best restaurants, Klahsen’s high standards and the astonishing financial support of her customers are two sides of a very interesting coin.
The 56-year-old turned to cheese-making a decade ago, hoping for a less hectic lifestyle after a 25-year career as a highly acclaimed chef in Stratford, Ont. Those hopes were quickly dashed. The twin demands of being an artisanal cheese-maker and building a business from scratch were unrelenting.
But things went well. Her cheeses, also sold at markets in the Toronto area, proved to be a hit, and sales doubled every year. Thanks to very accommodating terms on her leased premises, Klahsen was paying down the substantial start-up debt. But then in late 2008, her landlord told her he was going to rent to someone else.
“We had a very nice lease and it had given me five years to take the company into viability,” she says. “We were selling a million dollars’ worth of cheese and making a 10% profit, and that was where I wanted to be. But I still had debt. I not only put everything I owned into it, but borrowed as much as I could. So the question then became should I take another job to service the debt, declare bankruptcy, or continue?”
Continuing didn’t seem an option at first. Klahsen figured she needed an additional $1 million to build her own plant and, moreover, the recession had just taken hold. It was then she recalled a conversation with a friend who was thinking of raising heritage chickens.
“I told him I’d be happy to give him 500 bucks and he could give me $500 worth of chickens when he was up and running,” she says. “He never took up that offer, but I was willing to help him out because I liked him and what he was trying to do. So I wondered if maybe people would feel the same way about us.”
The figure of $500 stuck in her mind.
“I just offered that without thinking,” says Klahsen. “If I was comfortable offering that much – and I don’t earn very much money – I figured other people would be comfortable with that number. I had real pushback from people who were advising me. They thought $200 would be the limit and to ask for more was ridiculous.”
Klahsen stuck to her guns. She figured if she could raise $500,000, she would qualify for a government loan program that had been launched as part of the stimulus effort. Even at $500, she would need 1,000 people to give her money.
“I wasn’t ready to quit, so I went directly to the people who bought our cheese. They rallied behind us.”
For $500, a donor would get a voucher for $750 worth of cheese. The money would be put into a saving account and if the $500,000 figure wasn’t reached, it would be returned. (There were also $200 and $1,000 options – both offering a 50% cheese dividend.)
One year, and 1,000 contributors later, Klahsen had her money, and Monforte Dairy was reborn.
“We just put the ask out and the response was huge, it was amazing,” she said at an event this fall when Ontario Premier Kathleen Wynne presented her with the Premier’s Agri-Innovation Award and a cheque for $75,000.
Press coverage of the event spoke of Monforte’s “world-class cheeses,” but Klahsen is emphatic they’re not yet comparable to the best of Europe. She even refuses to enter cheese competitions, arguing samples from your very best batches is a false standard.
“When we do it well, we say, ‘Oh my god, how can we do this again and again and again?’ But I’m a chef with a pretty privileged palate and when I’m not entirely satisfied with it, I’ll tell people. We never ever bullshit. If we’re not happy with something, we say that to our customers.”
Her customers have always been pretty enthusiastic, she says, but they’re often comparing her cheeses to those made by industrial processes. The praise is nice, but pointing out they could be better has created a much stronger bond with her customers, she says.
“People can see the integrity there and know we’re truly striving to make really good cheese,” she says. “I think they’re buying into our value system, rather than the quality of our cheeses.”
Monforte’s “shareholders” continue to take a deep interest in the business. In the early days, many of them, mindful of Klahsen’s cash-flow needs, would pay rather than use their vouchers. Business is flourishing (there’s now a restaurant in Stratford and a stand-alone cheese shop in Toronto) and debt, which stood at nearly $1.3 million five years ago, has been halved. But money is still tight.
“I don’t live a grand life, but I eat very well,” Klahsen says with a laugh.
She didn’t even splurge after winning the $75,000 Premier’s Award. Instead, true to her devotion to her craft, she is using the money to open a cheese-making school.
“My hope is that in 10 or 15 years, we look back and say, ‘Look at the proliferation of artisanal food and how far we’ve come.’ I hope by then we won’t need to import cheese from Europe. Not that there’s anything wrong with their cheeses – there’s not – but I don’t understand why we’re not making foods in this country that are as good as Europe.”
She says she also hopes that others use her method of raising capital. It’s ideal for anyone with a dream of producing great artisanal food, and could also be a way for young people to gain access to land they could never otherwise afford, she says.
“I think it would work for anyone who has a group of people who believe in their skill set and vision,” she says.
There are two additional bonuses to raising money this way, she adds. First, you’ll get a group of customers who will offer advice and insights because they truly want you to achieve your goals. And second, paying them back is fun.
“It’s the nicest debt in the world,” says Klahsen. “Money is tight and there’s a part of you that resents making a regular loan payment because you’re often scrambling to get the money. But when I go to the farmers’ market and people give me a voucher, it’s your people and your friends. It’s a joy to repay that debt.”