Sam Hemingway

How people are putting their money where
their mouth is with Credibles


Kathy Juarez, a retired high school drama teacher living in Santa Rosa, is a fan of the cheeses from Petaluma’s Weirauch Farm & Creamery. She initially tried them out of loyalty to one of her former students­—now cheese-maker—Carleen Weirauch. Juarez was impressed, and even took an opportunity to visit the Weirauch farm. She decided to step up to become an investor, giving the farm $300 via Credibles, a new type of crowdfunding.

“Rather than having my money sit in a savings account, why not put it out in the community for things that I support, like local agriculture and organics,” she says.

The creamery received operating funds at a time when cash was tight, and Juarez now gets a tasty return in the form of cheese for as long as it takes to eat through her investment. When she visits the creamery’s booth at the Santa Rosa Farmers’ Market, Juarez doesn’t need cash. Instead, Weirauch uses the Credibles app on her smartphone to deduct the purchase.

Credibles (the name is a synthesis of “edible” and “credits”) are a new kid on the block in the world of Slow Money. Ex-banker Arno Hesse co-created the idea in late 2011 while putting together a farm loan that included interest payments in eggs. Technically gift certificates, Credibles are sold in denominations as low as $100. Hesse refers to the model as “community underwriting,” a way for people to help a local food business meet day-to-day expenses or purchase new equipment. It’s like the Slow Money concepts. According to Hesse, just as Slow Food is about knowing where your food comes from and eating locally, Slow Money is about knowing where your money is and spending it locally. After a few test runs, Credibles are now available throughout the U.S.

While Credibles work more as credit than investment, there is an added dividend, which ranges from 7.5 to 20 percent of the investment, depending on what the producer decides to offer. For example, Juarez will get $330 worth of cheese for her payment of $300. A prepayment of $1,000 to Naia Gelateria yields $1,100 worth of gelato plus a specially churned gallon of any flavor the customer dreams up. “It’s the model of the baker’s dozen,” explains Hesse. “They give you something extra that’s literally something they can grow or whip up in their kitchen.”

Joel Weirauch

Credibles in action: In the photo at the top of this page, Aileen Alfandary buys yogurt and milk from Saint Benoit market manager Sam Hemingway, who uses a smartphone to deduct her credits. Directly above: Joel Weirauch at the North Berkeley Farmers’ Market, where his popular sheep and cow cheese can be purchased with Credibles.

Another beloved local business expanding with help from Credibles is Sonoma County’s Saint Benoît Creamery, known for their French-style yogurt in recyclable glass jars and ceramic cups. “We already have loyal customers, and it makes sense to use that relationship to help us grow,” says owner, Benoît de Korsak. Customer Aileen Alfandary has signed on and recently used edible credits for the first time, to purchase the company’s lemon yogurt and milk at the Berkeley Farmers’ Market.  Alfandary says she’s eager to support farmers who, like de Korsak, “are trying to make a living at farming the land in a respectful way.”

But how much yogurt can one family eat? Hesse is tackling that problem by making Credibles exchangeable. This will allow customers to spend their credits at any or all of the 19 businesses thus far enrolled with Credibles. Eleven of these companies are in California, while New York has four, Oregon three, and North Carolina one. True exchangeability will require lots more participation outside of California, but, as any Slow Money enthusiast will tell you, good things happen slowly. The tricky accounting required to transfer credits between vendors will take place behind the scenes, without involving the customers. Hesse is also working with Whole Foods and other grocery chains to create a system that will allow people to spend their Credibles on the supermarket checkout line.

Credibles weren’t around when Berkeley’s Gather Restaurant was seeking investors. But, like Credibles, Gather’s funding model relied on personal relationships with many funders. Gather co-founder Ari Derfel joined Hesse at the Future of Money and Technology Summit in 2012 to talk about raising nearly $2 million to build Gather after the economy tanked in 2008. With wealthy investors fleeing, Derfel turned to a broader base of people who could write smaller checks. In the end, 100 investors pitched in, and Derfel took the time to get to know each one of them. The majority of investors live in the East Bay. “They get to put their mouth where their money is,” says Derfel. Connecting to investors has also led to ongoing friendships as well as a “guerrilla marketing force” that brings in new customers, two benefits that Credibles users will likely reap as well.

flyerDerfel is currently on the board of the People’s Community Market, the West Oakland full-service grocery store scheduled to open in fall 2014. He’s helping CEO Brahm Ahmadi raise $1 million in building funds from community members using a direct public offering. The minimum investment is $1,000, but Ahmadi is also offering Credibles for those who live in the area and can’t afford to invest that much. “We did this to enable low-income residents from West Oakland to participate in contributing capital to the creation of our grocery store,” he says. Investors will be able to spend their edible credits on groceries once the store opens.

According to cheese enthusiast Kathy Juarez, a purchase of Credibles operates on two levels, and both are important to her. “I care about the earth,” she says, “but it’s not altogether altruistic on my part. It’s a selfish act in the sense that I want to preserve the business so that I get to have their wonderful products.” ♣