Staying Connected: The Future of the Shared-Use Food Facility Industry

Increasingly shared-use food facilities, also known as kitchen incubators or commercial kitchens, are becoming a part of how food is made, bought, and consumed in America. The rise of food entrepreneurship, combined with new platforms for buying and selling food, has created an increased need for industrial kitchen space for small business owners. In response to this demand, a growing number of kitchen incubators are participating in the sharing economy, facing new challenges, and adapting to new business models, environments, and opportunities.

Econsult Solutions recently completed an update of the United States’ only survey for kitchen incubators (previously completed in 2013 and 2015) with collaborators, The Food Corridor, Urbane Development, and Catharine Street Consulting. From this update, we have been able to better gauge how shared-use food facilities approach challenges and identify other industry themes in this emerging sector. While the full report is set to be released in late fall 2019, analysis of the 180 responses has already provided meaningful information echoing key themes. Specifically, as the industry grows kitchen incubators are facing a growing need for connectivity and market maturity.

While the rest of the world grows more connected through the Internet and social media, and more business than ever conducted online, shared-use food facilities are still limited in terms of who they connect with beyond a local level. Our research indicates that these facilities are more spread out than in previous years, popping up in cities as well as in rural areas, and there are few communities for kitchen incubator owners to consult for best practices. As a result, incubator operators fail to receive more regional or national support and guidance from peers, and the industry reports a desire for increased regulation and resources.


National communities and partnerships have the potential to go beyond local networking – although that is an important piece – and provide a platform for connecting facilities to resources. With emerging business models such as ghost kitchens and exclusively online distributors, incubators are looking for new strategies to assist those kitchens and grow their market share. Large companies with venture capital backing are starting to build out facilities that meet these specific space needs. Current and future shared use food facilities will have to learn to compete with these larger and more capitalized firms for users and tenants.

However, shared-use food facility operators can collaborate to find strategies to differentiate themselves through their community-oriented experiences, established history of helping users, and providing additional services such as technical assistance and procurement services. These kitchens are microcosms of the local food system in which they operate, connecting producers, processors, services providers, and consultants in the food production and manufacturing world, all in one place. With collaborative platforms, incubators can learn different models to better adapt to this wide range of users.

In addition to adapting to emerging models, the growing incubator industry is currently lacking advocacy on both a national and local level. Challenges for many respondent facilities are tied to the need to further establish the shared-use food facility industry. The industry reports a desire for increased awareness, consistency in regulations, and more financing opportunities. Most of the respondents do not receive any tax credits, and many voiced a need for increased access to grant support. There was a great desire to raise awareness among financers in order to raise capital for their facilities or operations. By maintaining a more official network of incubators, the industry as a whole may receive credence among legislators and financial institutions, and could be better equipped to advocate for those needs.

Another key component of fostering a formal kitchen incubator industry is the establishment of standardized metrics. While certain mission-oriented facility operators stated that they track the outcomes of their users, most survey respondents stated they do not track any outcomes of their users. The industry currently lacks benchmarking to measure tenant success, for instance when a business begins to mature and requires different needs such as additional financing. Established benchmarks will further help formalize the industry and provide financial reputability to businesses in the industry seeking financing. Collaboration among incubators would help further develop such metrics, as many facilities could participate in crafting a system of tracking success and provide tools previously used to attain funding.

This is not to say that collaboration does not already exist among kitchen incubators. Nearly half of survey respondents have sought out relationships with other organizations. But many also noted that forming additional partnerships would be useful to them in the future. Partnerships may provide the opportunity to create a more established industry that helps mentor new incubators and connect regional food hubs.

Shared-use food facilities must leverage online resources like The Food Corridor, a software management platform for shared kitchens, and the Network for Incubator and Commissary Kitchens (NICK), the nation’s largest network of shared kitchens, and work together to develop this connectivity. Already, the NICK has become a leader for connectivity, hosting its second Food Incubation Summit for a sold-out audience of facility operators from around the country. As incubators grow and expand, collaboration will be necessary to ensure better access to resources, best practices, clear regulation, and metrics for success for the industry as a whole. With more connected consumers comes the need for a more connected network of kitchen incubators.

 

Nina Olney was a Drexel University Co-Op with ESI from April-September 2019. Ms. Olney is studying Economics, minoring in Environmental Studies and Sustainability in the Built Environment.

 

 

Ashley Colpaart, PhD RD is the founder and CEO of The Food Corridor, a platform that connects food entrepreneurs with commercial kitchen space. The Food Corridor is the first and only fully integrated software platform that manages scheduling, compliance, time tracking, billing, and client communication in the emerging shared-use kitchen industry.

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