What comes to mind when you think of shared incubators? For many of us, it conjures up an image of an old warehouse or downtown office facility used to serve as a low-cost, collaborative space for entrepreneurs and businesses. But there’s more sophistication to it than that.
There’s an emerging trend sweeping across America and it’s changing the game of the culinary landscape. Over the past few years, kitchen incubators have sprung up in 39 states and have grown above 50 percent to more than 200 facilities. According to a recent study released by ESI, American Communities Trust and Urbane Development, a kitchen incubator can be defined as “a culinary production facility that can accommodate multiple tenants and is dedicated to growing early-stage wholesale, retail, and/or catering food businesses”. What was initially thought to be a temporary solution during the recession has started to become a new way of working in the food industry.
This isn’t your average kitchen facility. This newly growing phenomenon of shared food space is a catalyst for something dynamic and promising. Kitchen incubators provide a low-cost and low-risk opportunity for aspiring “foodpreneurs” to turn their vision into reality. They serve as an experimental ground for individuals who are not ready to establish and operate on their own and give them the space to grow their businesses in a supportive environment while foregoing expensive startup capital costs.
With over 12 million employed in over 700,000 food establishments, the food industry is a predominant sector of the U.S. economy, but the road to starting a food business is paved with many hurdles from licensure and inspection requirements to expensive equipment and training. By breaking down these barriers to entry and providing access to essential amenities, kitchen incubators contribute to diversifying the local economy. One of the unique benefits to collaborative working space is the birthing of innovative ideas and the development of business acumen. Kitchen incubators are no different. Most people have a great product but no idea how to make it into a viable business. Statistically speaking, two out of three startups fail within the first five years but 87% of businesses that began in an incubator are still viable after 5 years. This is where incubators and accelerators can help cultivate it into something meaningful not just for the budding culinary entrepreneur but for the community as a whole.
Indeed, what makes this an enriching development for internal users as well as the surrounding community is its ability to create a social movement where artisans come together and leverage the power of collaboration and shared values.
Beyond the provision of workspace, supplies, business mentoring, and skill-building, many qualitative benefits ensue. Kitchen incubators enable a strong sense of community among foodpreneurs who might otherwise be navigating the puzzle pieces of a food startup on their own. Being an entrepreneur in any new venture can be daunting and isolating. Thus, being surrounded by those with similar entrepreneurial spirits can take some of those hardships away.
ESI’s industry snapshot depicts that a significant number of kitchen incubators tend to be located in urban areas and on average, over 53% of tenants are female while 28% are minorities. Tenants, who range from experienced professionals having worked in the food industry before to artisans with a culinary school background to aspiring foodpreneurs new to the food culture, have a unique environment to exchange ideas, learn different food production techniques and offer counsel in a way that cannot be found elsewhere. For food industry newbies, incubators are a good way of testing the waters of what it takes to run a successful and sustainable food business. From figuring out the right pricing strategies to testing business ideas and concepts, the space provides much needed insight.
In addition to the opportunity for culinary professionals to network with each other, the neighborhood can also benefit from community ties. Kitchen incubators can empower local residents by utilizing vacant land and property and renovating them to produce locally grown food.
Many incubators engage in workforce training programs while others share the space in a non-food related capacity. Our study shows that 40% are involved with at least one partnership. A powerful advantage kitchen incubators have is its affiliations with local colleges and universities. It is beneficial for both the educational institutions as well as students who can gain technical skills and even land an internship or job in their field of interest.
The endeavor is promising but doesn’t come without its unique set of challenges. Many respondents report that cleaning, maintaining the facility, and finding new customers are the greatest challenges. In the subsequent years, kitchen incubators can focus efforts on how to maximize its economic and social impact and spread its knowledge to others. One key area for growth is in its financial status. While many incubators are profitable and receive grant support, many of them are also losing money, particularly in rural communities.
Nevertheless, kitchen incubators are on an upward spiral. They can help change the public perception of shared spaces, and of how they can be used for productivity, enabling increased competitiveness which can drive the local economy. They can inspire other sectors of the economy on how shared spaces can be used to birth new ideas and work collaboratively under a set of common values. While the economy and the world of work is changing rapidly, kitchen incubators are capitalizing on this dynamic by turning challenges into opportunities and we can expect to foresee a continuation of this trend. Kitchen incubators and accelerators will play an important role in economic growth in the form of job creation and the fostering of social and economic innovation.
Uma Rajeendra is a Marketing Assistant at Econsult Solutions. She is responsible for generating content for the company website, designing marketing campaigns, assisting with proposals, tracking and growing ESI’s traditional media and social media presence as well as assisting with business opportunities.