Small Ax Peppers spices up the traditional business model through community gardens

Small Ax Peppers aims to bring the typical small business model to life through community gardens across the country.

The Bronx-based business started in 2014 after donating serrano pepper seeds to seven community gardens in the Bronx. Starting in October 2022, it now donates seeds and then buys back locally grown peppers from more than 122 community gardens across the country, totaling up to 15 tons of peppers.

Despite his local roots, the CEO of Small Ax Peppers says he’s not immune to the big hurdles plaguing some of his biggest competitors, including Conagra (CAG), Kraft Heinz (KHC) and Campbell Soup Company (CPB). .

“Like many businesses in this era, transportation costs have increased and we’re in the process of adjusting some of that. [cost]. We’ve had some upward pricing adjustments for our distribution partners, to make sure our costs stay in line with the costs we’ve had to absorb in this new environment,” CEO John Crotty told Yahoo Finance (video above). .

Small Ax Peppers Hot Sauce is made with peppers grown in community gardens and urban farms across the United States. (Courtesy: Small Ax Peppers)

At the end of each harvest season, the company buys back the peppers for about $83,000, but that figure is likely to rise this year as commodity, shipping and labor costs rise. .

The cost of fresh vegetables is at an all-time high, according to the latest Consumer Price Index (CPI) report from the US Bureau of Labor Statistics (BLS) for August 2022.

“Outfields continue to receive a much higher premium than before and we’ve had more outfields this year than in previous years,” Crotty explained.

The trip to transport all the peppers back to their production facility in the North Bronx to create the hot sauce can be expensive. In August, the cost of gasoline fell 10.6% month over month, but was still up 25.6% year over year. Now gas prices are rising once again, according to AAA, following Wednesday’s OPEC+ meeting, where it announced plans to cut crude output by 2 million barrels of oil per day this fall. Currently, the national average stands at $3.89 per gallon.

Despite the shock, Small Ax Peppers is determined to bring this model to more community gardens or, as Crotty calls it, “green oasis spaces” in urban cities. Peppers are now grown in more than 42 cities, including Chicago, Detroit, Atlanta, Los Angeles, Phoenix, among others. There is also an expanding list of regional produce offerings, among other items including serrano pepper seeds for customers to grow themselves.

According to Crotty, word about his mission is spreading fast. “It’s amazing how many gardeners across the country knew people from the Bronx, so as the model spread, word of mouth spread.”

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @brookedipalma or email him at [email protected]

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