SALT LAKE CITY CULINARY KITCHEN BUSINESS INCUBATOR STUDY · SALT LAKE CITY CULINARY KITCHEN...
Transcript of SALT LAKE CITY CULINARY KITCHEN BUSINESS INCUBATOR STUDY · SALT LAKE CITY CULINARY KITCHEN...
PreparedforSaltLakeCity‐DivisionofSustainabilityByCarbaughAssociates,inc.
AUGUST 2013
SALTLAKECITYCULINARYKITCHENBUSINESSINCUBATORSTUDY
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INTRODUCTION.................................................................................................................. 2
METHODOLOGY ................................................................................................................. 3
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SALTLAKECITYCULINARYKITCHENBUSINESSINCUBATOR
PreparedforSaltLakeCity,DivisionofSustainability
CarbaughAssociates,inc.+Zion’sBankPublicFinance
August18,2013
Whenreferencingthisreport,pleaseuseSaltLakeCity,DivisionofSustainability:CulinaryKitchenBusinessIncubatorStudy,August18,2013.
ENTREPRENURIALBASE/JOBCREATION………………………………………………………………….
INCUBATORASSESSMENTRESULTS………………………………………………………………………….
INCUBATORCASESTUDY…………………………………………………………………………………………
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Introduction 6
Methodology 7
CurrentMarketFoodTrends 8
ShiftingFoodCulture 9
Income,JobsandFoodSales 11
LocalMarketConditions 12
LocalCommunityEvaluations 13
EconomicOpportunity 21
BestManagementPractices‐Conclusion 24
APPENDIXA–Survey 26 APPENDIXB‐KitchenInventory 32 APPENDIXC‐FundingSources 33
ENDNOTES 34
ArticleI. TableofContents
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IncitiesandtownsaroundtheUnitedStates,atypeofbusinessincubatorfocusedonfoodproductionischanginghowfoodentrepreneursgettheirstart.Thesebusinessincubators,calledculinaryincubatorkitchens,oracceleratorkitchens,arelicensed,inspectedcommercialkitchenfacilitieswhereculinaryprocessorspreparefoodand/ornaturalproductsforwholesaleorretailsales.Mostoften,thesefacilitiesareusedbyarangeofexistinglocalspecialtyfoodservices,emergingfoodentrepreneurs,aswellasnaturalproductsbusinessstart‐ups.Anincubatorkitchenisdesignedtogivesmallfoodbusinessesacompetitiveadvantagewhenenteringorcontinuinginthelocalmarketplacebyprovidinganaffordablecertifiedkitchenspace.IncubatorslikeBonnerBusinessCenter,BlueRidgeFoodVentures,TheBusinessIncubatorCenter,andLaCocinaareallexamplesofincubatorswhohelpremoverestrictivebarriersofhighcostcapitalinvestmentassociatedwithleasingorpurchasingakitchenandkitchenequipment.Incubatorsliketheseallowsspecialtyfoodbusinesseslikeprocessors,farmers,caterers,foodcartvendors,andmobilefoodtruckstheopportunitytostartfromnothingandgrow.Aculinaryincubatorkitchenfurtherreducestheriskoffailurebyremovingadditionalstartupbarriersassociatedwithno,orlowskillsintheareasofmanagingandmaintainingonesowncommercialkitchen,aswellas,knowledgegapssurroundingdistribution,branding,marketing,accounting,andfinancing.Knowledgetransferisanimportantcomponenttoincreasingthesuccessforincubatortenants,andawelldevelopedincubatorkitchenprovideseducationandtrainingforemergingfoodentrepreneurstolearnhowtorefinerecipes,testmarkets,expandtheirproductlineandacceleratetheirbusinesscapacitysotheycanoutgrowtheincubator,andeventuallylaunchintothemarketontheirown.Byusingaculinaryincubatorkitchen,foodpurveyor’sbenefitfromcapitalaffordability,aswellasbenefitingfromadditionalknowledgebasedresourceslikeculinarybusinessandtechnicalskillbuildingthathelpsincreasechancesforlongtermbusinesssuccess.Culinarybusinessincubatorsmaybefundedthroughvariousmechanisms,including,public,private,orpublic/privatepartnerships.Additionally,thereareseveralpossibleowner‐operatorformatsforthesefacilitiesandrangefromsolelyownedandoperatedasaprivate,forprofitbusiness,ownedandoperatedbyanon‐profitorganizations,or,theymaybeownedandoperatedthroughsmallbusinessdevelopmentcenters,communityandeconomicdevelopmentcenters(CED’s),aswellasthroughhighereducationfacilities,primarilyuniversitiesfooddevelopmentcentersorextensions.
INTRODUCTION
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Themethodologytodeterminethefeasibilityofanincubatorincludedfourconfidentialfocusgroupdiscussions,asmallsurveyandcurrentmarketresearch.
AnimportantconsiderationinfindingoutmoreaboutwhetheraSaltLakeCityculinaryincubatorkitchenisrecommendedandrelevantwastoaskcurrentandpotentialfoodprocessorsabouttheirthoughtsregardingtheneedanddemandforsuchafacility.TounderstandmoreaboutthepotentialforaculinaryincubatorkitcheninSaltLakeCity,four,twohour,focusgroupdiscussionswereconvenedduringthemonthsofMarchandMay2013.CarbaughAssociatesrecruitedparticipantswhohavevariousconnectionstolocalfoodandcommunityandincludedpeoplewhoarethinkingaboutstartingaculinarybusiness,thosecurrentlyinvolvedinoperatingaculinarybusiness,suchaslocalcaterers,restaurantowners,foodcartvendors,mobilefoodtruckoperators,inadditionto,localfarmers,fooddistributors,andknowledgeablecommunityleaders.StafffromtheSaltLakeDivisionofSustainabilityandtheSaltLakeCityFoodPolicyTaskForceprovidedadditionalreferralsforparticipants.Atotalof48invitationswereextended,resultinginatotalof24participants.Eachfocusgroupwaspresentedwiththeexactsamesetof10specificquestionsrelatedtothelocalfoodenvironmentandapotentialculinaryincubatorkitchen.Confidentialityallowedindividualstofreelysharetheiropinionsandknowledgeaboutthelocalculinarykitchenenvironmentalongwithfactorstheybelievearecriticaltoanyplanninganddevelopmentofacommunitykitcheninthecity.
Allfocusgroupparticipantsandsurveyrespondentssharedtheirculinaryaffiliationsandinterests.Informationtargetsoftheincubatorinquiryincludedopinionsaboutthelocalfoodenvironment,aswellasfactorsrelatedtoapotentialkitchen.
ImpressionsofSaltLakeCity’sfoodculture Typesoffacilitiescurrentlybeingusedbyemergingfoodbusinesses Whatareequipmentandbuildingneedsthatwillmakeapotentialfacilityuseful? Servicesotherthankitchenspacethatcouldbehelpfulinbuildinguplocalfood
businesses Whoareessentialregulatoryagenciesthatneedtobeconsulted? Identificationofoperator(s)andmanager(s) Inacriticalpathforwardtodeveloping,launching,operating,andmanagingsuch
afacility,whatisthebestroleforSaltLakeCityinanyfuturedevelopmentofaculinaryincubatorkitchen?
WhoismightbethebestoperatorandmanagerforaSaltLakeCitybasedculinaryincubatorkitchen?
Whereisthebestlocationforthispotentialfacility,and Arethereanyreasonswhythedevelopmentofthisfacilityshouldnotmove
forward?
CURRENTMARKETFOODTRENDS
METHODOLOGY
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8% 2010 US Increase in Organic Food + Drink Sales
10% 2011 Increase in Organic Food + Drink Sales
United States - 2013 Organic Sales 4% of Total Food Sales
FoodtrendsintheUnitedStatesoverthepastseveralyearsshowanincreaseinthedemandforspecialtyfoodsthataresourcedfromlocalproducers,andareconsideredorganic,alongwithhavingagreatdealofethnicandculturalfoodvariety.
Despiteasignificanteconomicrecession,salesofethnicfoodsintheUnitedStateshaveexperiencedsolidgrowthoverthedecadefrom2000‐2010,showinganoverallgrowthof12%from2007to2009.Inthetwo‐yearperiodfrom2010‐2012ethnicfoodsalesincreased4.5%to$8.7billion,andsalesinthisfoodsectorisprojectedtogrowby20.3%from2012to2017.1
Inthefoodspecialtyarea,Hispanic/MexicanfoodsrepresentthelargestsegmentoftheUSEthnicFoodsmarketaccountingfornearly62%ofsales.Fororganicspecialtyfood,USOrganicFoodsandDrinksalesincreasedapproximately8%in2010,whichissignificantlyhigherthanthelessthan1%growthexperiencedinthemainstreamfoodmarket.Addedtothisstrengtheningmarketexpansion,organicfoodproductsincreased10%in2011,with78%ofAmericanfamiliesnowbuyingorganicfoods.2
1Mintel2OrganicTradeAssociation,2012
ThedemandfornaturalfoodsinSaltLakeCityisevidencedbyanincreasingnumberofnatural‐wholefoodsstoreslocatedwithinthecity.Therearecurrentlyeight“major”farmersmarketsoperatinginSaltLakeCounty,andthesemarketsofferanexpandingrangeoflocalvalue‐addedsourcedfromlocalproduce.
CURRENTFOODMARKETTRENDS
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SaltLakeCityhasagrowingminoritypopulation,aswellas,averyyoungadultpopulationandbotharedrivingchangeforexpandingnewculinarymarkets.Datafromthe2010USCensus3showsthatthecity’smedianageisayouthful30.9yearsoldcomparedtothenationalmedianof37yearsofage.
SaltLakeCity’sschoolagepopulationisethnicallyandraciallydiverse.BecauseofthisdiversitySaltLakeCitySchoolDistrictisaminoritymajorityschooldistrict,wheremorethan57%oftheenrolledstudentpopulationreportedasminorityinthefallof2012.Duringthe2011‐12schoolyear,minoritystudentsaccountedfor53%oftheenrolledstudentpopulation,thisthenincreasedto57%inthefallof2012.Ofallstudentsenrolledin2012,therewere10,724Caucasianstudentsandacombinedtotalof13,999minoritystudents.Amongthesestudents,Hispanic/Latinostudentsaccountedfor40%ofthetotalstudentpopulation.AfricanAmericanAsianandPacificIslandersrepresentedfourpercenteachofthestudentpopulation,with“multiethnic/racial”makingup3%followedbyNativeAmerican’sat1%.4Whenconsideringstudentpopulationbyeducationalagegroup,Hispanic/Latino’smakeup42%ofallelementarychildren,45%ofalljuniorhighagestudents,and38%ofhighschoolstudents.
Asamulti‐cultural,multi‐ethnicgroup,thechildrenandyouthofSaltLakeCityrepresentfutureconsumer’swhowillmaketheirownadultfoodbuyingselections.Futurefoodselectionswillmostcertainlybebaseduponarangeofexperiencesandatasteforflavorsarisingfrombothfamilialinfluence’sblendedwithnewlyacquiredtasteswhichmayhavebeenadoptedfromaculturallyrichnetworkoffriendsandcommunity.
SaltLakeCitySchoolDistrict,Fall2012RaceandEthnicityofEnrolledStudents
32010USCensus,www.census.gov4SaltLakeCitySchoolDistrict,StudentDemographicData.www.slcschools.org
AfricanAmerican;4%Asian;4%Caucasion;44%
Hispanic/Latino;40% Native
American;1%PacimicIslander;
4%MultiRace/Ethnicity;3%
SHIFTINGFOODCULTURE
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Asarefugeeresettlementcommunity,SaltLakeCityisnowhometoagrowingpopulationofforeignbornresidents.RefugeesfromAfrica,Asia,theMiddleEastandotherregionsaroundtheworldhavearrivedinSaltLakeCitytostartnewlives.EvidenceoftheglobalfoodinfluencearisingfromnewimmigrantscanbeseenintheemergenceofAfricanmarketsandrestaurants,newHalalmarketsandthedevelopmentofsuccessfulimmigrantfarmsandvalueaddedfoods Asisreflectedbytheexpansionoflocalvalueaddedproducts,ethnicmarketsandrestaurants,thelocalconsumerpaletteisbroadening. Foodmarketsareshowntobecloselyrelatedtocommunitydemographics.Nationalfoodtrendsalsohelpinformthepotentialforfoodinthelocalmarket.AndgivenSaltLakeCity’syouthfulness,itsculturalandclassdistinctions,demandforanexpandingrangeofethnic,organicandotherspecialtyfoodsshouldbeexpectedtogrow.
WhileSaltLakeCityiscurrentlypredominatelywhite,approximately33%ofthecity’spopulationisminority.WithinSaltLakeCity,therearetwocouncildistrictswithaminoritymajoritywithinwhich65%oftheirresidentsarecountedasminorities.Accountingfor23%ofthecity’spopulation,theSaltLakeCityHispanic/Latinopopulationcontinuestoincreasewithapopulationincreaseoffourpercentbetween2000‐2010.HispanicsorLatinosalsoaccountedforthegreatestshareofthecity’sethnicorminorityresidents,with65percentofallminoritiesreportingasHispanicorLatino.
Duringthatperiodfrom2000‐2010,thenumberofresidentsdeclaringarace“otherthanwhite”increasedfromfourpercentfrom20.8%to25%.RelativetotherestoftheStateofUtah,SaltLakeCityhasasignificantAsianpopulationconcentration.ResidentsreportingAsianalone,areSaltLakeCity’ssecondmostnumerousminoritygroup,andonapercapitabasis,thecity’sAsianpopulationismorethandoublethetwopercentStateofUtahAsianpopulation. Alongwithanincreaseinethnicandracialdiversity,SaltLakeCityhasahighconcentrationofsame‐sexcouples,ranking3rdhighestamongUSmid‐sizedcities.Independentresearchhasshownthatcommunitieswithlargegaypopulationsareplaceswithlowentrybarriers,meaningtheyaremorelikelytobeplacesmoreopentodifferentkindsofpeople,aswellasmoreopentoinnovationandentrepreneurship.5
5TheRiseoftheCreativeClass,Florid,Richard,2012BasicBooks
SHIFTINGFOODCULTURE
0.0
10.0
20.0
30.0
Asian Hispanic RaceotherthanWhite
Percen
tofSaltLakeCity
Popu
laFo
n
SaltLakeCity,Utah:SelectMinorityGroups
SaltLakeCity,Utah2000‐2010PercentofAsian,HispanicandOtherthanWhitePopulaFonSource:USCensus2010
2000
2010
11
0%
20%
40%
60%
80%
16‐39 40‐44 45‐49 50‐54 55‐59 60‐69
PercentofTotalNumberFoodServiceWorkers
AgeofFoodServiceWorker
SaltLakeCountyFoodServiceWorkersSource:NAICS722,2013
IncomeleveldataforSaltLakeCitysuggeststhereisaneedforeconomicdevelopmentopportunitiesinthecity.ThemedianhouseholdincomeinSaltLakeCityis$44,501,comparedto$57,738fortheStateofUtah.Povertyleveldatashowsthat17.9%ofSaltLakeresidentslivebelowthepovertylevel,comparedtoanaverageof11.4%inUtah.6ASaltLakeCitybasedculinaryincubatorkitchenhasthepotentialtoprovideculinaryandbusinessdevelopmentopportunitiesforthisportionofthepopulation,currentfoodserviceworkersandgraduatesoftheSaltLakeCommunityCollegeCulinaryArtsprogram.
6USCensus,ACS5yearaverage2007‐2011
ThemajorityoffoodserviceworkersinSaltLakeCountyarebetweentheagesof16‐39,andwaitstaffmakeupthemajorityoffoodserviceworkers,
INCOME,JOBSANDFOODSALES
FoodServiceWages
$9‐$14PERHOUR
AVERAGEANNUALWAGESFORUTAHFOODSERVICEWORKERS
$24PERHOUR
AVERAGEANNUALWAGEFORUTAHFOODSERVICEMANAGERS
$750,000GROSSSALESOFASUCCESSFULUTAHFOODCOMPANYTHATSTARTEDINACULINARY
INCUBATORKITCHENAFTERFIVEYEARSINOPERATION
~33%
SALTLAKECITYPOPULATIONBETWEENTHEAGESOF30‐55
AGE30–55AGERANGEOFCULINARYENTREPRENUERSUSING
COMMERCIALORINCUBATORKITCHENSINUTAHANDTHEINTERMOUNTAINWEST
InterviewswithmanagersandownersofcommercialandincubatorkitchensinUtah,aswellas,intheIntermountainWestsuggestthatthemajorityoffoodbusinessentrepreneur’swhousetheirfacilitiesarebetween30–55yearsofage.
ThenumberoffoodserviceworkersinSaltLakeCountyincreasedeveryyearfrom2001through2008.In2009,thenumberoffoodserviceworkersdeclinedaboutthreepercent,andthendecreasedagainin2010.Since2010,thenumberoffoodserviceworkersinSaltLakeCountysteadilyincreased,reachinganaverageannualnumberof35,698in2012.ThisisthehighestnumberoffoodserviceworkersinSaltLakeCountysince2001.
26000280003000032000340003600038000
1 2 3 4 5 6 7 8 9 101112
AverageAnnualEmployees
Year2001‐2012
SaltLakeCountyFoodServiceWorkersSource:NAICS722,2013
Employees
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CulinaryBusinessOperations
UtahcurrentlyoperatesunderthefoodcottageindustrylawwhichallowsUtahresidentstoproducenon‐potentiallyhazardousfoodproductsintheirhomekitchens,andthenofferthemforsalewithintheStateatoutletssuchasfarmer’smarkets.However,notallhomekitchensmeettherequirementsoftheUtahStatelawforhomefoodproduction.Additionally,inordertolegallysellfoodproductstogrocerystoresorrestaurants,foodmustbeproducedinanFDAandUSDA(formeat)approvedkitchen.Atthistime,theUtahDepartmentofAgricultureandFoodcurrentlyhas45LettersofAuthorizationallowingfoodentrepreneurstoproducefoodinakitchenotherthantheirown.WiththeexceptionofanintermittentrangeoffivetotenpeopleproducingfoodintheProvo,UtahCommunityActionAgencyKitchen,themajorityofLettersofAuthorizationareforfoodproducersinSaltLakeCountyworkingatlicensedkitchens.AsofMay2013,theUtahDepartmentofAgricultureandFoodhas208licensesforhome‐basedbusinessesintheState.InSaltLakeCitythereareanincreasingnumberoffoodvendorsandmobilefoodtruckvendorswhorequirealicensedkitchenorcommissaryforfoodpreparationandstorage.Licensingrecordsshowthattherearecurrently48permittedvendorsinSaltLakeCityand9licensedmobilefoodtrucks.Asreportedthroughfocusgroupsdiscussion,foodcartandmobilevendorsareusinglocalprivatecommissarieswithvaryingdegreesofsatisfaction.Somestartupandsmall‐scalevalueaddedprocessorsarerentingcommercialkitchenspaceonanasavailablebasis,whichmeansutilizingkitchensduringnon–operatinghours.MarketStrengthOnemethodforevaluatingthestrengthoftheSaltLakeCityfoodservicesectoristocompareaveragepercapitafoodsalesinthecityagainststatewidesales.AreviewoftheaveragepercapitafoodsalesinSaltLakeCity,comparedtotheaveragepercapitasalesfortheStateofUtahindicatesthatresidentsfromsurroundingareasarecomingintothecitytopurchasefoodservices.ThissuggeststhatthefoodservicesectorinSaltLakeCityisanadvantagethatcanbebuiltupon.
Capture Rates for Food Service Business Category in Salt Lake City NAICS 722
Food Service Category Capture Rate
Full Service Restaurants 296%
Limited Service Restaurants 177%
Caterers and Other Specialty Food Services 246%
LOCALMARKETCONDITIONS
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WhatdopeopleyouknowsayaboutSaltLakeCity’slocalfoodculture?
WordsummaryrepresentingresponsesfromtheCulinaryIncubatorKitchenfocusgroups.Largerwordsrepresentmostfrequentlyusedwords.
CommunityMemberSupporting
Food26%
ValueAdded(Farm)Producer22%
Organization14%
InterestedinBecomingANewFoodEntreprenr
11%
Specialty/GourmetProducer6%
Government3%Baker
2%ChurchorCivicGroup
2%
Other14%
DescribeYourRelationshiptoFoodPreparationandProductionN=41SaltLakeCitySurvey2013
MarketStrength
ForSaltLakeCity,thefoodservicesectorcapturerateiswellabove100percent.Thisrateisespeciallystrongamongfullservicerestaurants,caterersandotherspecialtyfoodservices.Withahighcapturerateforcateringandspecialtyfoodservices,theopportunityforspecialtyfoodstart‐upsinSaltLakeCityappearstobefavorable.AculinarykitchenbusinessincubatorinSaltLakeCitycanprovidetheplaceforfoodbusinessestocapitalizeonthecurrentrobustcaptureratewhilefocusingtimeandenergyonproductdevelopmentatanaffordablerate.
GatheringInformation
AnimportantconsiderationforassessingapossibleSaltLakeCitybasedculinarybusinessincubatorkitchenwasgatheringlocalopinionsandideasaboutsuchafacility.Tobetterunderstandthoughtsaboutthepotentialforaculinary kitchenbusinessincubatorinSaltLakeCity,twodifferentapproacheswereusedtounderstandvariouscommunity‐basedperspectives. Thefirstapproachinvolvedsurveyingatlocationswherepeoplewhowouldmostlikelybefamiliarwiththeconceptwerelocated.
LOCALCOMMUNITYEVALUATIONS
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Thesecondinformationgatheringapproachinvolvedconveningfourfocusgroupsessions,whichwereheldduringthemonthsofMarchandMay2013.Thesegroupswerecomprisedofpotentialandcurrentfoodbusinessprofessionalsandincludedknowledgeablecommunityfoodleadersmadeupofcurrentandpotentialcaterers,restaurantowners,foodcartandmobilefoodtruckvendors,valueaddedfoodproducers,farmers,fooddistributors,andnon‐profitfoodleaders.Eachfocusgroupsessionlastedtwohours,andparticipantswereaskedtenspecificquestionsrelatedtothelocalfoodenvironmentandfactorsrelatedtoplanninganddevelopmentofapotentialculinaryincubatorkitcheninthecity.
FocusGroupsandSurveys: WhatwasLearnedAboutaPotentialSaltLakeCityCulinaryIncubatorKitchen?
FromFocusGroupsBasedonwhatyouknow,whattypeoffacilitiesarefoodbusinesseslikelocalfarmers,caterer’s,valueaddedprocessors,foodtruckowners,sidewalkcartvendors,andothersusingtopackageandpreparetheirproducts?
Fewgoodoptionsexist Cottageregulationsarereallylimiting–toomanyhoops Groupsareteaminguptofindfacilities Somepreliminaryprepfromhomeforfoodcarts Commissariesarecrowded,expensiveprivatelyownedfaculties Somerequirepurchasingagreementssotherearefeesforsoda,drinks,andthe
facility Somecommissariesaredirty,ornotpermitted,soIboughtacommissaryofmy
own Rentingabakeryspace,lookingforabiggerkitchen Wanttotakeoveranoldkitchen Leasingcateringspace Ifitssomeone’shome,orsharingacommercialkitchen,theoptionsarelimited
andshortterm Alotoftrucksprepareinsideoftruck,anditscertified,butnotideal Itisarealchallenge,rentingspaceisexpensive‐$800‐$1200/month
LOCALCOMMUNITYEVALUATIONS
LOCALCOMMUNITYEVALUATIONS
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Judgingfromwhatyouknow,ifaculinaryincubatorkitchenweretobedevelopedinSaltLakeCity,whattypeofequipmentandbuildingneedswillmakethefacilitymostusefultoyou?(FocusGroups)
STORAGE‐STORAGE‐STORAGEExcellentErgonomicDesignEnergyEfficientEquipmentEnergyEfficientBuildingConvection/ComboOvensCommercialRange‐8‐10burnersCommercialBraiserTiltSkilletRest‐StyleDishSteamersBlendersJuicerDehydratorsBurrMixerHobartGiantStockPotsLargeKettleVacuumSealerUSDAMeat/DiaryProcessingMeatSlicersMeatSmokerWalk‐InRefrigerator+FreezerClimateControlforConfectionsBottling/FillersScalesCartsFoodPackingandAssemblyAreaOnSiteGrayWaterDumpingPotableWaterIceMachinesLockerSpaceSafeOffStreetLoadingLevelLoadingDocks/HighBaysCoveredDriveIn/DriveOutSecure24/7FacilityCleaningEquipmentSinks(UptoCode)DishwashersPrinterPaperGoods
FoodPreparation
Thefuturesuccessofaculinaryincubatorkitchenisinpartbasedonanticipatedbusinesssuccessfortenantswhohaveanunderstandingofthetypeoffoodbusinesstheywishtogrow.SupportingexistingbusinessesandguidingnewfoodbusinesswillbeanimportantroleforanyfacilityofthistypeinSaltLakeCity.ThesurveyindicatesthattherearecurrentlysmallfoodbusinessespreparingarangeoffoodsintheSaltLakearea.Inthefuture,anincubatormayhelpprovideacompetitiveadvantageforthosewhowanttoexpandtheirexistingfoodenterprise,aswellas,supportthosewhowanttobeginanewfoodbusiness.Fromthissurvey,thereisastrongindicationthattheseindividualswanttoexpand,orbeginnewfoodbusinesses.Withlowerentrycostsandastrongcommitmenttobecomingatruebusiness,localfoodentrepreneurswithhaveanincreasedchanceofbusinesssuccessbyusingafacilityofthistype.
0 5 10 15 20
Jams/Jellies/SyrupsSalsa/Sauces/Condiments
CannedFoodsBakeryGoods
ValueAddedProducePasta
DryMixesJuicesorotherBeverages
BeerCateredGoods
SidewalkFoodVendorFoodTruckVendor
Other
NumberofResponses
FoodPreparaFons.Blue‐Now
Green‐IntheFuture.
WhatTypeofFoodCategoriesareYouPreparingNow,orWouldLiketoPrepareintheFuture?
N=41SaltLakeCitySurvey2013
LOCALCOMMUNITYEVALUATIONS
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UtahDepartmentofHealth26%
SaltLakeValleyHealth
19%
U.S.FoodandDrugAdministraFon15%
SaltLakeCityBusinessLiscensing
14%
UtahDeptartment.ofAgricultureandFood
14%
U.S.DepartmentofAgriculture12%
RegulatoryAgenciesthatCreateChallengestoStarVngorConVnuingLocalFoodProcessingN=41SaltLakeCity
2013
KnowledgeBase
Kitchenincubatorsrequirestrictsafetycompliancestandardstoassureasafeworkingenvironment,properprocessingforvarioustypesoffoods,anddeliveryofasafeproductforconsumers.Foranypersonorgroupusingacommunitykitchenfacilitytheremustbeanunderstandingofsafefoodhandlingatalllevels.Tenantknowledgesharingaboutfoodregulationandtheregulatoryprocesswillbeimportantforsafehandlingcomplianceandforacceleratingbusinessesgrowth.Focusgroupssharedthisaboutregulatoryentities:
Whodoyoufeelaretheimportantfoodregulationentities thatneedtobeconsultedifanincubatorisdeveloped?
FocusgroupparticipantsdidnotidentifytheFoodandDrugAdministration(FDA)asapotentialregulatoryagencythatneedstobeinvolved.However,theFDAwillneedtobeconsultedforavarietyoffoodpreparationscreatedinaSaltLakeCitybasedfacility.AgenciesthatwillneedtobeconsultedforaSaltLakeCitybasedCulinaryIncubatorKitcheninclude:
USFoodandDrugAdministration
USDepartmentofAgriculture
UtahDepartmentofAgricultureandFood
SaltLakeCountyHealthDepartment
SaltLakeCityBusinessLicensing
Amongthosewhotookthesurvey,(right)26%statedthattheUtahDepartmentofHealthcreatedchallengestostartingorcontinuingalocalfoodbusiness.TheUtahDepartmentofHealthwith26%,isfollowedbytheSaltLakeValleyHealth,with19%ofthosesurveyedwhobelievetheseagenciescreatechallengestomaintainingorstartingupafoodbusiness.
LOCALCOMMUNITYEVALUATIONS
LOCALCOMMUNITYEVALUATIONS
Itissometimesunclearwhoisregulatingme,really FireMarshall BuildingCodeInspectors SaltLakeValleyHealthDepartment StateDepartmentofAgricultureandFood LabelingAgencies U.S.DepartmentofAgriculture ServSafe® FoodHandlingPermitting
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AccordingtotheU.S.SmallBusinessAdministration,morethan80percentofsmallbusinessesfailwithintheirfirstfiveyearsbecauseoflackofmoneyorskillssuchas,productmarketing,businessand/orfinanceskills.However,nearly87percentofbusinessincubatorgraduatesremaininbusiness.Bymitigatingstart‐upcostsandprovidingasupportiveandeducationalenvironment,businessincubatorshavesuccessfullygraduatedover87%oftheirfirms,andhavekeptanoutstanding84%ofthesethrivingbusinessesintheirlocalcommunities.Tobesuccessful,kitchenincubatorsmustbeactiveparticipantsinhelpingtheirtenants.Throughoutthecountrythisisaccomplishedbyprovidingserviceslikebusinessplanninganddevelopment,marketingandfinancialtraining,accesstocapitalandconnectionsinthelocaleconomy.
Aculinaryincubatorkitchenisinfactafoodbusinessincubatorwhosepurposeistohelpstart,guide,adviseandgrowlocalfoodbusinesses.Tobetterjudgeifthelocalcommunityneedsorwantstheseresources,focusgroupswereasked:Arethereanyclassesorbusinesseducationprogramsrelatedtoaculinaryincubatorthatcouldbehelpfulinbuildinguplocalfoodbusinesses?Focusgroupparticipantswereveryrealisticaboutthechallengesofstartingorcontinuingafoodbusinessalongwiththeneedfortechnologyandbusinessskillbuilding.Theneedforsmallbusinesseducationisveryimportantintheculinaryincubatorsetting,anditmustnotbeundervaluedasanecessaryresourcefortenantsofaSaltLakeCityculinaryincubatorkitchen.
LOCALCOMMUNITYEVALUATIONS
FoodPrepGuidelinesandWeightsandMeasurementTraining
SafeFoodHandlingandServSafe®classesinmultiplelanguages.On‐lineclassesdonotwork.ESLparentsarehavingtheirkidstaketheonlineclassesforthem
Professionalassistanceonhowtoscaleuprecipes GeneralFoodBusinessEducation: Whatarerealisticworkhours Howtocreateafoodbusinessplanandstrategy Neededsupplies Distribution Marketing Branding Financingoptions Classesonsourcinglocalproducts Howtoplanforyearroundaccesstolocalfruitsand
vegetables Industryexpertleadclasses Figureouthowtopartnerwithexistingprograms,like
SaltLakeCommunityCollege,LarryMillerBusinessSchoolandDiversifiedAgriculture
Howtonetworkorbuildconnectionsinthebusiness Insurance,liabilityandotherlegalissues Classesormentoringonhowtoworkthrough“red
tape”orgetthroughbureaucratichoops Socialmediahelp
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Focusgroupstalkedaboutwhomightbethebestoperatorandmanagerofthefacility,aswellasthebestroleforSaltLakeCityinanyfutureincubator.Arangeofopinionsarose,buttheresponsesgeneratednoclearconsensusofopinionastowhomaybethebestmanagementoperator.ThebestroleforSaltLakeCitytendstowardtheareaoforganizational,financialplanninganddevelopmentactivities.TherewerestrongopinionsexpressedthatSaltLakeCityshouldnotrunthisfacility.Ifthisprojectmovesforward,whodoyouthinkisbestsuitedtooperateandmanagethisincubatorkitchen?Why?
UtahStateUniversitybecauseoftheirprograms Non‐profitwouldbemorecosteffective CommunityandEconomicDevelopment/Government Keepingcostsdownwouldrequirethegovernmenttobeinvolvedsincethey
havealltheresources Notthecity,butthecityshouldhaveanoversightboard Anadvisoryboardneedstobediverse,peoplewhoknowthewholepicture Non‐foodspecificbusinessfolksshouldserveontheboard Governmentshouldhavenothingtodowiththisprojectbecauseitwouldsetupa
falseexpectationofwhatittakestorunafoodbusiness Thegovernmentmovesslowandhasahardtimemakingmoney,ifitwasrunby
apublicsectorthatwouldcompromisetheprospectsofthefacility SaltLakeCountyHealthshouldrunthekitchen Facilitymanagerneedstobeafoodserviceveteran
WhatdoyouseeasthebestroleforSaltLakeCityinanyfuturedevelopmentofanincubatorkitchen?
SaltLakeCityshouldstartitandturnitovertosomeoneelsewhocancreatethisasaneconomicdevelopmentresource
Citylacksagility‐thisisaproblemformanagingthistypeoffacility SaltLakeCityshouldaidinprocessesoflocationandinfrastructure Thecityshouldpromotethisasanasset SaltLakeCityshouldhaveaseatatthetable,butnotcompleteoversight Thecityshouldrunit Provideacertifiedlegalspace,butnotofferbusinessadvice Creatingaonestopshopforallculinaryfoodbusinessneeds Cityshouldhelpwithsitting Planningforthisfacilityinaneighborhood/districtarea Cityshouldbeworkingatamacrolevelonfoodissues
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IMPORTANTLOCATIONThefocusgroupswerealsoaskedaboutwhereafuturekitchenmightbelocated.Onthistopictherewasasignificantamountofconsensusaroundtransportationneedsandthreegenerallocationsstated,withtheareaofStateStreetto300Westfrom600Southto900Southbeingmostfavored.You’vetoldmewhoyouthinkmightbestoperateaculinaryincubatorkitchen,whereisagoodlocationtoconsiderlocatingthistypeoffacility?
TheIntermodalHubarea MarmaladeDistrict Granary AreaaroundStateStreettothe“Westside”and800/900South Accesstothefreewayandtrainsisveryimportant Don’tlocateitonone‐waystreetsorrightdowntownwherethereiscongested
traffic Notinthephysicalepicenterofthecity,butcentralizedwitheasytrafficflowand
freewayaccess Accesstotransitisimportant Don’tburyitinaneighborhood Putitinanareawherepeoplewhomakefoodcantakeittonearbystores–
incubateaneighborhoodwhileincubatingfoodbusinessesBasedonanevaluationofthecity’stransportationnetwork,foodwholesale,foodretaillocations,aswellas,emergingdevelopmentpatternsandcommunityneeds,theconsultantteamsupportsalocationwithintheareaboundedbyapproximatelyStateStreetto400Westandfrom600Southto1300South.Locatingafacilityinthisareaisideal,butintheeventthatotherviablelocationspresentthemselves,substantialtransportationaccessibilityinconjunctionwithotherelementsstatedinthisreport,includingcommunityplanning,shouldbeclearlyevident.Integrationofthisfacilitywithothersustainablefoodplanninganddevelopmentisstronglyadvisedbytheconsultant.
LOCALCOMMUNITYEVALUATIONS
20
RISKSANDCAUTIONSFinally,focusgroupparticipantswhereaskedtooffercriticalcandidcommentsaboutfuturerisksorcautionsassociatedwithapotentialfacility.Alloftheparticipantsofferedclearsupport,forakitchen,butwerecautionaryandacutelyawareofthepotentiallyhighcapitalcostinvestmentandoverallplanningthatneedstogointocreatingacompellingSaltLakeCitybasedculinaryincubatorkitchen.Planning,financingandmanagementwerekeyconcerns,andifthesecannotbeadequatelyputinplace,Focusgroupparticipantsurgedcaution.Overall,theexpectationisthatSaltLakeCitywillbetheresponsiblepartyforcreatinganddeliveringonawellthoughtoutplan.Theimportanceofnear,andlongtermfacilityreputationalsuccesswasdeemedasveryimportant,withanemphasisonnotmovingforwardifanexcellentfacilitywithanexcellentreputationcan’tbebuilt.Asonefocusgroupparticipantstated,“Anunsuccessfulkitchencoulddestroyanysupportforakitcheninthefuture” Ifanalysiscomesbackpositive,orsupportingaculinaryincubatorkitcheninSaltLakeCity,canyouthinkofanyreasonswhythedevelopmentofthisfacilityshouldnotmoveforward?
Amissionandveryclearbusinessplanisneeded Ifthereisnotenoughfunding,donotmoveforwardwiththisproject Managementandfundingtogetherarecritical,ifmanagementcan’tbesupported
thekitchenshouldnotbecreated Themotivationhastobeclear,ifthemotivationistogenerateincome,itshould
notmoveforward Profitinthestrictestsenseneedstobeputaside,balancemustbestruckbetween
coveringcostsandofferingaccessibleratesandsustainingbusiness Definesustainable–viabilityandoperationalaspectsareimportant Iamanxioustohavethistypeoffacility,butIwanttohaveoperational
confidence IftheCottageFoodLawgetstooloose,itwillunderminethiseffort Ifthisfacilityisnotuptocodeitwillbeanightmare Itisimportantfordecisionmakerstounderstandhowmuchofacommunity
assetandresourceafacilityofthistypeshouldbecome Thisshouldn’tjustbeaplacetomakefood,ifresourcesandeducationaren’t
availablethenitshouldn’tgoforward Stakeholdersupportwillbeimportant Anunsuccessfulkitchencoulddestroyanysupportforakitcheninthefuture
LOCALCOMMUNITYEVALUATIONS
ECONOMICOPPORTUNITY
LOCAL
COMMUNITYEVALUATIONSLOCALCOMMUNITYEVALUATIONS
21
Thereareseveralwaysaculinaryincubatorkitchencreatesjobsandaddsbenefitstoalocalcommunity.Itcan:
Removerestrictivebarriersofhighstartupcostsandregulatorydifficultiesassociatedwithstartingafoodbusiness–allowingentrepreneurstostartsmallandgrowwithambition
Allowentrepreneurstoretainmoreindividualcapitaltoinvestintheirproduct
Providebusiness,technical,culinary,andotherknowledgebasedtrainingthatincreasesthesuccessrateforstartupfoodbusinesses
Createanexcellentstartupenvironmentwithlowentrycostsandbusinesstrainingwheresmallfoodbusinessescanexpandduringtheirtenureattheincubator–generallygraduatingafteratwoyearcycle–andmovetoalargerfacilityorbuy/buildtheirownkitchen
Whiletherearemanywaysinwhichanincubatorcanbuildlocalculinarybusinesscapacity,therearealsosignificantupfrontinvestmentandongoingoperatingexpenseswhichmustbeconsideredinordertoincreasethelikelihoodthatsuchafacilitycanitselfbecomeasuccessfulenterprise.Asacommunityinvestment,aculinaryincubatorkitchenisacapitalintensiveinvestmentprojectrequiringfundingforfacilityplanning,developmentandequipmentacquisition.Forthisstudy,areviewofculinaryincubatorsoperatingwithintheregionandaroundthecountryreveledthatcapitalinvestmentandequipmentcostswithinthepast11yearshaverangedfromapproximately$400,000(BusinessIncubatorCenterinGrandJunctionColorado)to$8milliontobuildandequiptheNewJerseybasedRutgersFoodInnovationCenter.
Intermsofoperation,culinaryincubatorkitchensaroundthecountryvarywidelyinthetypeofcookingresourcesofferedintheirkitchens.Someincludealimitedamountofspaceandequipmentforanarrowrangeoffoodpreparationswithoutbusinessornetworkingsupport,whileothersincludemultiplepreparationareasforrawfood,wetfood,dryfood,meatsanddairy,refrigeratedstorage,drystorage,specialclimatecontrols,24/7secureaccess,comprehensiveequipmentresources,packingroomsthatbeusedforspecialdietaryrequirementsincludingglutenfreefoodpreparationandpackingandextensivebusinessandtechnologytraining.
Becausetherangeofopportunitycanvarywidelybetweenfacilities,thesquarefootspacepertenantisequallyasvariable.BasedonasamplingofUtah,IntermountainWestandseveralnationalculinaryincubatorkitchens,theaveragenumberofannualtenantsforanincubatoraroundthecountryrangesfromapproximatelyonetenantpersquarefootofkitchenspaceto14tenantspersquarefootofkitchenspace.
ECONOMICOPPORTUNITY
22
AndalthoughdatatrackingonjobscreationislackingformostUSculinaryincubatorkitchens,someculinarykitchensarekeepingtrack,andbasedonasamplingoftheseincubatorkitchensitisestimatedthatannualjobsperyearrangefrom.5jobsper1000squarefeetofkitchenspace,to25jobsperyearper1,000squarefeetofkitchenspace.Averagejobcreationisapproximately6.4FTE’sofjobsannuallyper1,000squarefeetofkitchenspace.Usingthisinformationandassuminga4,000squarefootkitchen,26jobswouldbecreatedannually.ForaSaltLakeCityincubator,carefulscreeningofapplicantscombinedwiththerequireduseofbusinessfinancetraining,andefficientaccess,willhelpincreaseannualjobsinthelocalmarket.
Asanexample,LaCocina,a4,000squarefootfacilityinSanFrancisco,reportsthatitsupported39businessesthatcreated110jobsand$3.35millioninrevenuein2012.Thesetotalsonbusinessandjobcreationalongwithtotalrevenueindicatethatapproximately25jobsper1,000squarefeetofspacewerecreatedfromtheLaCocinaculinarybusinessincubator.
WithintheIntermountainWest,ownersofseveralUtahfoodservicebusinesseswhowereinterviewedconfidentiallyforthisstudy,statedthattheywereestablishedinthepastfiveyearsandprojecthiringanaverageof20‐25employeesoverthenextfiveyears.Additionally,accordingtoJasonTalcott,DirectoroftheSaltLakeCommunityCollege,CulinaryArtsProgram,thisprogramhasanapproximateenrollmentof250studentsperyear,andgraduatesabout60studentsannually.Manyoftheseculinarystudentsareconsideringfutureopportunitiestostarttheirownfoodbusinesses,andhestatedthataculinaryincubatorkitchenwouldbeagoodplaceforthemtobegin.
ECONOMICOPPORTUNITY
23
SPINOFF
Economicactivity,suchasnewfoodbusiness,startsachainreactionthatgeneratesmoreeconomicactivityinacommunity.Moneyspentintheeconomydoesn’tjuststopwiththefirsttransaction,butinsteadstaysinthecommunitywhereitfiltersthroughtoaccelerateopportunityatmanylevels.Economistscallthisamultipliereffect,andinthelocalfoodservices,thisisevidencedbylong‐termconnectionslinkingbetweenproducers,distributors,processorsandconsumers.InUtah,researchconductedbyUtah’sOwnshowsthatevery$1.00spentonlocalproductshastheeffectofadding$4.00to$6.00intotheUtaheconomy.Becausethistypeoffoodconnectionissolocalizedithastheadditionalbenefitofreducingthecarbonfootprint.
Inadditiontospecificfoodbusinesses,localjobsandbusinessopportunitiesgeneratedthroughthecreationofasuccessfulfoodservicebusinessincubatorinclude:
FoodGrower/Suppliers–Foodservicebusinesseswillpurchasefoodproductsandwherepossiblewillideallybuyfromlocalgrowersandsuppliers
Marketing–Emergingfoodbusinesseswillpurchasemarketingservicesformarketingtoolssuchaslogoandwebsitedesign,productbrandingandplacement
Printing–Foodservicebusinesseswillpurchaseprintingservicessuchasproductlabels,businesscards,advertisementcardsandflyers,bannersorposters,etc.
Packaging–Foodservicespurchasepackagingproductssuchasbottling,boxes,wrapping,sealingproducts
ProfessionalOrganizations–NewfoodbusinessownerswilljoinlocalbusinessorganizationssuchasVestPocketBusinessCoalition,ChambersofCommerce,WomeninBusiness,UtahMagazine,etc.Partneringwithlocalretailoutlets–Newfoodserviceproductscanbeplacedinexistingretailoutletstoincreasesalesforboththeexistingretailoutletandthenewfoodserviceprovider.Forexample,bakedgoodsmaybesoldinalocalcoffeeshoptoexpandthemarketappealofthecoffeeshopandprovideavenueforsalesofanewfoodproduct.Historically,evensmallfoodoperationsareabletoselltheirproductstoretailoutlets,wholesaledistributors,restaurantsandinstitutions
LocalRestaurants–Newfoodbusinesseswillsupportexistingfoodservicebusinessesasthepurchasefoodforworkpantries,employeemeals,meetingsandevents
ECONOMICOPPORTUNITY
24
CONCLUSIONSaltLakeCity,likemostmidsizedAmericancitiescontainsassetsthatgiveitadvantagesinfoodservicedevelopmentsuchasimporting,storing,processing,wholesalingandfooddelivery.SaltLakeCity’smetropolitangeographiclocation,arobusttransportationnetwork,alargeworkforce,centralwholesaledistribution,technologyinfrastructure,farmersmarkets,localrestaurants,marketsandcafes,anoverallstronglocalbusinesseconomyandadiversepopulationareallbenefitstosupportingaculinarybusinessincubatorkitchen.Inaddition,locatedinSaltLakeCityisthestatesflagshipuniversity,aswellas,colleges,non‐profitentitiesandtechnicalassistanceavailabletoassistwithdevelopmentandtraining.Manykitchenincubatorsthatofferculinaryandotherbusinesstrainingalongwithnetworkingarerunthroughcommunityandeconomicprograms,suchasuniversityfoodtechnologycentersornon‐profitsandarerarelyfinanciallyselfsustaining.Inordertoencouragenewentrepreneursintheseprograms,rentalratesusuallyarenotsufficientlyhighenoughtocoveroperationalcosts.Furthermore,inordertocreatesmallbusinessesandincreaselocalemployment,akitchenincubatormayhavetoabsorbpartoftheproductioncost.Ahighnumberofkitchenincubatorsaroundthecountryrelyongrantsandotherfundingtobreakeven.Manyofferadditionalservicessuchascommunitycookingclasses,demonstrationcenters,facilityrentals,consulting,andresearchanddevelopmentforexistingbusinessestohelpsupporttheongoingoperations.Privatekitchenincubatorscanbeveryprofitable,butmostoftendonotprovideculinary,businessandtechnologyassistancealongwithknowledgesharingthatisneededformostsmallfoodbusinessestogrowandsucceed.ConditionsinSaltLakeCityarefavorableforaculinaryincubatorkitchen.Thefollowingisasummaryof“bestpractices”learnedbysharedculinarybusinessincubatorkitchensaroundtheCountrythatmayservetoguideaSaltLakeCitybasedfacility:
SizeandOperatingHours–Thekitchenshouldbesufficientlylargetoaccommodatemorethanonetenantatatimeandbeavailableforrent24hourssevendaysaweek.Forallhours,akeyless–secureentryisbest.BasedonSaltLakeCity’sdemographicandeconomicevaluationforthisreportakitchenwithatleast3500sfofkitchenspaceisrecommendedforaSaltLakeCityculinaryincubator.Focusgroupparticipantsandthosesurveyedexpressedadesireforawiderangeofkitchenopportunitiesincluding,meatanddairyprocessing,aswellascontrolledpackingspaceforallergens.Afacilitythatsupportsnaturalproductmanufacturing(tinctures,oils,lotions)processingwouldbeanadvantage.
Storage–Insufficientstoragecanlimittheabilityforexistingtenantstofunction,
andcanlimittheabilitytoaddnewtenants.Storageshouldincludecoldstoragewalkinrefrigerationandfreezing,aswellasasignificantamountofdrystorage.Akitchenspacetodrystorageratioof2:1upto1:1isneeded.
CONCLUSION–BESTMANAGEMENTPRACTICES
25
KitchenSpace–Equipment–Inadditiontotheequipmentlistprovidedbyfocus
groupandsurveyparticipants,additionalitemssuchasapastamaker,heatbandsealer,weighinpackingmachines,juicepulper,grinder,aswellashighbayaccessandvehiclestorage.
Population–Kitchensinareaswithlargerpopulationsgenerallyhavean
advantageoverkitchensinsparselypopulatedareas.SaltLakeCityhasapopulationreachofover1.5millionpeoplewithina60‐minutedrivetothecity.
ModelforSuccess–Commercialkitchensthathavefollowedthebusiness
incubatorconcepthavebeenthemostsuccessfulovertheyears.Kitchensthatfollowtheculinarybusinessincubatormodelprovidesupportsuchasculinary/recipeassistance,businessandtechnicaltraining,connectionstogrowersanddistributors,accesstocapital,andnetworking.
FDA/USDAApproval–AlmostallfacilitiesareFDAapprovedandsomeareUSDA
approved.Itiscriticaltohaveafacilitythatallowsformultipletypesoffoodbusinesstenants.
RentalRates–Rentalratesgenerallyrangefrom$5.00‐$24perhourtoashigh
as$1,750.00perday.Somefacilitieshavevaryingand/orslidingfeeratesdependingonthehoursofuseoreconomiccircumstancesofatenant.Tenantswhousemorehoursmaypayalowerhourlyratecomparedtothosewhousethekitchenlessfrequently.Basedonexperiencesofotherkitchens,arentalrateofapproximately$15.00‐$20.00perhourwasimportantforakitchensabilitytomaintainfinancialsecurity.
AnchorTenants–Manysuccessfulkitchenshave“anchortenants”(cateringand
mobilefoodvendors).Anchortenantsprovidesustainedrentrevenueandstabilitytothefacility.Generally,ananchortenantrentsafacilityanywherefrom15–150hourspermonth.Catererscanbeagoodsourceforanchortenants.
Management–Inadditiontoexcellentbudgeting,fundraising,andgrantwriting
techniques,thesuccessofasharedculinarykitchenincludesexcellentmarketing.ManytenantscurrentlyusingsharedcommercialkitchensinSaltLakeCitysaidthatittookthemaconsiderablelengthoftimetofindasharedkitchenduetopoormarketingbyexistingcommercialkitchens.Marketingtechniquesforthekitchenneedtomirrorthoseforaprofitorganizationusingcommunicationssuchasnetworkingandpresentingwithexistingbusinessandnon‐profitorganizations,aggressiveradio,earnedTVandprintmediaaswellassocialnetworkingstrategies.Inadditiontothesetechniques,cleanlinessandsafetymustbeapriority.Asafe,secureenvironment,alongwithmaintainingcooperationamongtenants,andassuringregulatorycomplianceandcleanlinessismandatoryforthedevelopmentofaculinaryincubatorinSaltLakeCity.
CONCLUSION–BESTMANAGEMENTPRACTICES
26
AppendixASurvey,February2013
AQUICKSURVEYTOASSESSINTERESTINTHE
SALTLAKECITYCULINARYINCUBATORKITCHENPROJECT
Whichbestdescribesyourrelationshiptofoodpreparationproduction?
Iama:
_____ValueAdded(Farm)Producer _____Restaurant
_____Catering _____FoodTruckVendor
______StreetCartVendor _____Baker
______Specialty/GourmetFoodProducer ______Government
______Organization _____ChurchorCivic
Group
______InterestedInBecomingaNewFoodEntrepreneur
______Communitymembersupportingfood _______Other(describe)
Whattypeoffoodcategoriesareyoupreparingnow,orwouldyouliketopreparein
thefuture?
(CHECKALLTHATAPPLY)
PreparingNowInterestedInPreparingintheFuture
BakeryGoods _______ _______
Jams/Jellies/Syrups _______ _______
APPENDIXA–INCUBATORKITCHENUSERGROUPSURVEY
27
Salsa/Sauces/Condiments _______ _______
CannedFoods _______ _______
ValueAddedProduce _______ _______
Pasta _______ _______
DryMixes _______ _______
CateredGoods _______ _______
SidewalkFoodVendor _______ _______
FoodTruckVendor _______ _______
Juices,orotherbeverages _______ _______
Beer _______ _______
Other_____________
IfaCulinaryIncubatorKitchenisdevelopedinSaltLakeCity,whereisagoodlocationforthistypeoffacility?Why?________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Whattypeofequipmentdoyouorothersneedforfoodserviceproduction?Checkallthatapply.
StandardOven FillingandPackagingEquipment
ConvectionOven DryStorage StandardRange/Cooktop WalkInCooler/Refrigerator Mixer FreezerStorage Grill Dishwasher Fryer StainlessSteelTables SteamJacketKettle Other CommercialMixer
______________________________________ FoodProcessor ‐
_______________________________________ Dehydrator
28
Doyouknowifanyoftheseregulatoryagenciescreatechallengestostartingorcontinuinglocalfoodprocessingbusinesses?
UtahDepartmentofHealth UtahDepartmentofAgriculture SaltLakeCountyHealthDepartment UnitedStateFoodandDrug
Administration SaltLakeCityBusinessLicensing UnitedStatesDepartmentofAgriculture
Wouldanyofthefollowingresourcesorplanningtoolsbeofinteresttoyouoryourgroup?
PreparingaBusinessPlanforfood Sales orvalue‐addedpackingandprocessing Distribution Marketing Obtainingandusingloanfundsfor
foodSafeFoodHandling business UnderstandingFoodNutritionStandards InsuranceandLiability LabelingRequirementsandDesign TrainingwithProfessionalChef Packaging Other
AdditionalComments______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Yes,IaminterestedinstayinginvolvedintheSaltLakeCityCulinaryIncubatorKitchendiscussion.Pleasekeepmeinformedbycontactingme.Name______________________________________________________________Phone:AreaCode()______________________Email___________________________________________
THANK YOU
29
SurveyResults
Which best describes your relationship to food preparation and production?
My Relationship Is
Community Member Supporting Food 16
Value Added (Farm) Producer 14
Organization 9
Interested in Becoming A New Food Entrepreneur 7
Specialty/Gourmet Food Producer 4
Government 2
Baker 1
Church or Civic Group 1
Catering 0
Street Cart Vendor 0
Restaurant 0
Food Truck vendor 0
Other 9
NON-PROFIT
MEDIA
FARMER 2
CSA
STUDENT 3
COMMUNITY GARDER
30
0 5 10 15 20
Jams/Jellies/Syrups
Salsa/Sauces/Condiments
CannedFoodsBakeryGoodsValueAddedProduce
PastaDryMixes
JuicesorotherBeverages
BeerCateredGoodsSidewalkFood
Vendor
FoodTruckVendor
Other
NumberofResponses
TypeofFoodPreparation
WhatTypeofFoodCategoriesareYouPreparingNow,OrWouldLikeToPrepareintheFuture?
N=41SaltLakeCitySurvey2013
PrepareintheFuture
PreparingNow
02468101214161820
Standardrange/Cooktop
Dehydrator
FoodProcessor
WalkInCooler/
Refridgeratorstorage
StainlessSteelTables
FreezerStorage
Mixer
Dishwasher
StandardOven
FillingandPacking
Equiptment
DryStorage
CommercialMixer
ConvectionOven
Grill
SteamJacketedKettle
Fryer
Other
NumberofResponses
TypeofEquipmentNeededforFoodServicePreparation
WhatTypeofEquipmentDoYouNeedforFoodServicePreparation?
31
UtahDepartmentof
Health26%
SaltLakeValleyHealth19%
U.S.FoodandDrug
AdministraFon15%
SaltLakeCityBusinessLiscensing
14%
UtahDeptartment.ofAgricultureand
Food14%
U.S.DepartmentofAgriculture
12%
RegulatoryAgenciesThatCreateChallengestoStarVngorConVnuingLocalFoodProcessing
N=41SaltLakeCity2013
0
5
10
15
20
25
LabelingRequirem
ents
andDesign
Packaging
Obtainingandusing
loanfundsforfood
business
SafeFoodHandling
Preparingabusiness
planforfoodorvalue‐
addedpackagingand
Distribution
Insuranceandliability
Marketing
Trainingwith
professionalchef
Sales
UnderstandFood
NutritionStandards
Other
NumberofResponses
BusinessResourcesorPlanningToolsThatAreofInterest
Table1:KitchenIncubatorsName Location Average
#ofMonthlyTenants
AverageMonthlyUsage(Hours)
RentalRates
TypeofFoodProcessing
KitchenSpace(sq.ft.)
StorageSpace/StorageRentalRates
FundingSupport
PercentSubsidized
BonnerBusinessCenter
Sandpoint,ID 12 120‐150 $13.75/Hr. FDAApproved
7
1,400 DryStorage$825/month
No 0%
BlueRidgeFoodVentures
Candler,NC 12‐148 NA $24/Hr. FDAApproved
9
12,000 Dry,Wet,Refrigerated
Yes 40%
BusinessIncubatorCenter
GrandJunction,CO
$10/Hr.+$35monthlyprogramfee
FDAApproved
2,500 Dry,Wet,Refrigerated
Yes 25%
CacheBusinessResourceCenter(CRBC)
Logan,UT 38 NA $25/4Hrs.$50/8Hrs.$500depositw/lease
Bakedgoods,jams,jellies,salsa,candy
NA Limited Yes NA
KitchenCru Portland,OR 3810
NA Variable11 FDAApproved
4,80012 Dry,Wet,Refrigerated,Climate
controlledforcandymaking
No 0%
LaCocina SanFrancisco,CA
50 629 $13/Hr. USDA&FDA
Approved13
4,400 RefrigeratedandDry
StorageRates‐$50‐
%100/month
Yes 46%14
CommunityActionKitchen
Provo,UT 3‐4 80 $25/4Hrs.$45/8Hrs.
FDAApproved
15
900 BakersRack4CabinetsNoCharge
Yes 90%
RutgersFoodInnovationCenter
NewBrunswick,NJ
NA NA $750‐$1,750perday
USDA&FDA
Approved16
23,000 Dry,Wet,Refrigerated
Yes 40%
UtahStateUniversity
Logan,UT Variable Freefor1st6months
Jams,jellies,sauces,bakedgoods
1,000 Limited Yes NA
7Anythingbutrawmeat.Canusepre‐cookedmeat.8170clientssinceinceptionin2005(110/8=13.75)9Anythingbutrawmeat.Canusepre‐cookedmeat.10Doesnotrenttomobilefoodvendorsunlesstheyaremovingtowardabrickandmortarbusinesssetting.11Tenantrentalrateisvariabledependingontimeofdayandtenantsbusinessexperience123,200sq.ft.commercialkitchenspaceand1,600sq.ft.bakerysectionandclimatecontrolforcandymaking.Alsohasasmalleventspacetohostfunctionsincludingachef’sbarandaprivatediningareathatseatsupto40peoplefordinnerevents,teachingclasses,tastingsamplemenus,corporatefunctions,etc.KitchenCrukeeps100peopleemployedthroughthebusinessesusingitsfacilities.13CouldnotreachanyoneatLaCocinatoconfirmUSDAapproval,buthavelaunchedbusinessesusingmeatsuchasgroundbeefintostadas.Launchedsuccessfulbakedgoods,candies,full‐servicerestaurants,sauces,hummus,etc.businesses.14Break‐outoftotal(100%)funding:Foundations–25.7%;Individuals‐8.2%;Corporations–6.7%;Government–5.7%;Events–24.5%;RetailSales–13.9%;IncubatorProgram–13.7%;CartsProgram–1.7%15Anythingexceptrawmeatsanddeepfry16Candoalltypesoffoodprocessing–includingrawmeats
APPENDIXB–INVENTORYOFCULINARYINCUBATORKITCHENS,USA
33
Table 2: Funding Sources Common Funding Sources
United States Department of Agriculture United States Economic Development Administration State Department of Agriculture State Economic Development Administration Local Cities CDBG Grants Private Donations Foundations Corporations Various Government and Non-Profit Grants
Theseareexamplesoffundingsourcesaccessedbyculinaryincubatorkitchenswhooperatewithinthenotforprofit,highereducation,and/orcommunityandeconomicdevelopmentcentersmodels.Private,forprofitculinaryincubatorkitchensdonottraditionallyrelyoncontinuedfinancialassistance.Private,forprofitskitchensmayasacoarseofgeneralbusinessexpansionobtainbusinessdevelopmentloansthroughbanksorotherbusinessdevelopmentfinancialinstitutions.
APPENDIXC–COMMONFUNDINGSOURCESFORUSACULINARYINCUBATORKITCHENS
34
Resourceinformationforthisreportisdrawnfromoneinpersonandphoneinterviewswithculinaryincubatorkitchenandhighereducationdirectorsandstaff,andthefollowingsources.
1. AgriculturalMarketingResourceCenter,www.agmre.org/business_development/strategy_and_analysis/analysis/blue‐ridge‐food‐ventures
2. Mintel
3. NationalAssociationfortheSpecialtyFoodTrade
4. NorthAmericanIndustryClassificationSystem(NAICS)http://www.census.gov/cgi‐bin/sssd/naics
5. NortheastCenterforFoodEntrepreneurship,necfe.foodscience.cals.cornell.edu
6. OrganicTradeAssociation
7. PhoneinterviewswithDirectorsandSupportStaffofallCulinaryIncubatorKitchensreferencedinthisAppendixB
8. PhoneinterviewwithJasonTalcott,DirectorofCulinaryArts,SaltLakeCommunity
College
9. PhoneinterviewwithUtahbasedfoodenterprises
10. 2010,USCensusandAmericanCommunitySurvey,census.gov
11. SaltLakeCityCensus2010Atlas,Downen,John;Perlich,Pamela,Bureauof
EconomicandBusinessResearch,DavidEcclesSchoolofBusiness
12. SaltLakeCommunityCollege,CulinaryArtsProgram
13. SaltLakeCitySchoolDistrict,StudentDemographicData,www.slcschools.org
14. USDepartmentofCommerce
15. USDepartmentofAgriculture,www.usda.gov
16. UtahDepartmentofAgricultureandFood,DivisionofRegulatoryServices
17. USFoodandDrugAdministration,FoodGuidanceRegulationwww.fda.gov
18. UtahCode4‐5‐9.5
19. UtahDepartmentofWorkforceServices
20. TheNationalBusinessIncubationAssociation
21. TheRiseoftheCreativeClass,Florida,Richard,2011
ENDNOTES