Kitchen incubators are popping up to help new food-preneurs

03/03/2014 1:25 AM

03/03/2014 8:05 AM

Clara Botero, a self-proclaimed health foodie, has been baking for others since she was a child. So when she needed extra income after a divorce, she began looking for shared commercial kitchen space for her burgeoning company, Dulce Bean.

Two months ago she found it in a nondescript former restaurant in North Miami Beach, where she whips ups gluten-free products like Organic Wheat and Gluten Free Chocolate Ganache Peanut Butter Cake and Dark Chocolate Almond Thins to sell online and to local coffee shops and health food stores.

Her dream: “To eventually have a place of my own.”

Across town, Eva Alcaraz-Arango rents space from a commercial bakery in far West Kendall for her business Gazpacho Alcaraz, the Drinkable Salad. Her gazpacho, a cold, tomato-based Spanish soup that features green peppers and cucumbers, has done well enough that her work space has grown to include her own room — she still shares a large refrigeration unit — a special blender she brought from Europe, and an industrial vegetable peeler.

Her product is sold by Epicure, The Fresh Market, Delicias de España and other gourmet coffee shops, bakeries and markets, and her business was selected as one of 100 finalists in the FedEx Small Business Grant Contest, which recognizes innovators and start-ups. She, too, dreams of a place of her own.

As South Florida’s food trade simmers into national recognition and food-preneurs try to catapult their products into bigger markets, companies are cropping up to provide shared kitchen space and advice on everything from license applications to social media marketing.

Dubbed kitchen incubators, these spaces enable a new business to make and package foods that meet strict preparation and sanitation standards for a fraction of what it would cost a starting entrepreneur to outfit her own commercial kitchen.

Equipment for a very basic commercial kitchen costs at least $150,000, according to Kefren Arjona, managing partner of Commercial Kitchen 305, the North Miami Beach incubator where Botero bakes and packages her sweets. Arjona rents the use of his 1,500-square foot facility starting at $17.50 an hour. Other commercial kitchens charge similar prices, from $20 to $25 an hour. Most usually require a minimum block of hours and a lease.

There is no definitive count of how many kitchen incubators exist in the area, and food-preneurs complain that South Florida lacks a public-private consortium to help start-ups, which many other cities have.

Alcaraz-Arango, for example, searched off and on for almost nine years for the right rental arrangement, and found it only after a conversation with a neighbor. A friend, who was going to partner up with her own food company, gave up.

According to Econsult Solutions, a Philadelphia consulting firm, there are about 150 kitchen incubators nationwide. Of the 40 that responded to a recent survey, more than 30 had been in business for five years at most.

At Commercial Kitchen 305, which is less than a year old, tenants include a half-dozen caterers and four bakers as well as a handful of local restaurants that use Arjona’s equipment on an as-needed basis to test new menu items. Most of his tenants began their businesses at home, and now want to expand with minimal capital. “This gives them options without the big investment,” Arjona said.

Under Florida’s “cottage food law,” anyone can make certain food products — namely, cakes, cookies, breads, candies, fruit pies, jellies and jams — in an unlicensed home kitchen if sales do not exceed $15,000 a year and if the products are sold directly to the consumer.

That makes certain settings, such as farmers’ markets, a popular, if limited, venue for new food businesses to introduce their wares to the public. (Other products, such as the Gazpacho Alcaraz, which is made entirely of fresh produce, must always be made and packaged in a licensed commercial kitchen.)

For a product to be sold wholesale or over the Internet, however, or when sales surpass $15,000, the law requires it to be produced in a licensed kitchen.

The food-production business attracts lots of part-timers who hold down other jobs, particularly single parents — like Botero — who are trying to supplement their incomes. “Most of our clients are moms, single parents, baby boomer ladies,” Arjona said. “It seems that for whatever reason these ladies found cooking and baking the answer to their need or dream.”

Kitchen incubators are also popular in urban areas, where rent is high and sharing space is the easiest way of keeping overhead costs down. Adam Zwingler, a yacht chef, has been running the numbers for his new business, Zwacoz Tacos, for almost four years and hopes to launch it in April or May, beginning in the Aventura corporate center.

But the concept — delivering gourmet lunches to offices — only works in highly dense commercial areas of a city, where a new business usually can’t afford an expensive lease.

“When you’re starting out,” said Zwingler, another Arjona tenant, “you have to figure out a way to keep all costs down. You do everything yourself. But with an incubator the system is already set up to help you along.”

Not all those who call themselves kitchen incubators are created equal, however. Some provide only space, rented at an hourly, daily or monthly rate often determined by the length of the lease. Most, but not all, provide all the necessary equipment. A few throw in advice, either as part of the rental agreement or for an extra fee.

Well-informed advice often makes the difference between success and failure.

At Commercial Kitchen 305, Arjona requires all tenants to sign a kitchen booking agreement, similar to a lease, that details the initial requirements to rent space, including providing copies of business licenses from both the city and the county, food management or handler certificates, and a food vendor license from either (or both) the Florida Department of Business and Professional Regulation or the Department of Agriculture.

In addition, the business owner must fill out a detailed questionnaire that asks a variety of questions, from the company’s target market to its social media presence.

“People have a good product but have no idea of the business side,” said Eligia McKenna, Arjona’s business partner. “We’re here not just to rent the space. We’re also here to offer guidance from A to Z, and we want to know what you need, what your experience is and where you want to go.”

Botero, 33, likens Arjona and McKenna to sports coaches. They teach her the ropes, push her to succeed and provide encouragement when she’s down. “They’re always on my back,” she joked. “Kefren is after me, ‘Did you do this? Did you do that?’ ”

At Chefs4You, an incubator near the Mall of the Americas in West Miami-Dade, chef and restaurateur Edgar Ariza seeks to provide a similar environment for the two tenants, both bakers, who rent his commercial kitchen during off-hours, when he’s not using it for his own restaurant and catering business. He requires a one-year lease. And, like Arjona, he also pre-screens new businesses.

“We are very anal who we sign up,” he said. “I’m not interested in somebody doing this once a week as a hobby or something. We want people who are serious about growing their business.”

As a kitchen incubator, Ariza faces two recurrent issues: People want to sign up for minimal hourly rates or a short lease while continuing to make their product at home, an illegal practice that he does not condone. “We don’t want somebody getting sick on a product that has been made in our kitchen,” he said. “Our license is on the line.”

And second: He often meets prospective tenants who “have no clue about the numbers, about what it costs them per unit, the number of employees they might need or how long it takes to produce. You can’t run a business that way.”

Even with the growing demand, kitchen incubators themselves sometimes don’t succeed. Kitchen953 in Oakland Park, which billed itself as a culinary consulting and event programming business, is no longer open. Its phone has been disconnected, and an automatic reply email states, in part: “Any arrangements you have with us prior to our closing will be honored and we will continue to be effective until the date of purchase.”

Because there are so few local incubators providing guidance, most food-preneurs are forced to rent space wherever they can find it, and often don’t get the guidance they desperately need. Their path to success is riddled with missteps. One common mistake: New food business owners don’t realize they need to include nutrition information on a label if a product is to be sold in a supermarket.

But some succeed. Perhaps one of the most talked-about success stories is Zak Stern, who apprenticed in the art of making bread in Europe and Israel before returning to his hometown with the idea of launching his own business, called Zak the Baker. He began making artisan sourdough bread about two years ago in a friend’s garage, where he had installed a pizza oven. His bread became so popular that long lines formed at farmers’ markets and he would sell out by midmorning.

Six months into the venture, “when I was leaving dough on the doorknobs and I had run out of capacity,” he moved to a shared commercial kitchen near Miami International Airport, where he went from baking 20 to 30 loaves a day to 300, mostly for wholesale distribution. In the next couple of months he will move his operations to his own place in Wynwood. Although the front of the site will be a retail cafe, the bulk of his business, the one he hopes to grow further, will remain wholesale.

Success has come at a price. “I’ve aged 10 years in these two years,” Stern joked. “I’ve lost a lot of hair.”

Stern laments that there is little professional support in South Florida for new food entrepreneurs, who must slog ahead on their own. Although he sought advice from other food businesses, an uncle and such business groups as SCORE, most of what he learned was through trial and error. “I ended up making a lot of mistakes because of that,” he said. “It was like I was reinventing the wheel when I really didn’t need to.”

He believes the area needs a food entrepreneurship support system that provides help to both new and existing businesses, much like the state agriculture extension programs based at public universities. “When it comes to craft food and local productions, we’re a little behind the times,” Stern said. “If we’re serious about wanting to have a food culture, we need to be willing to grow it.”

Many second that sentiment. Alcaraz-Arango said that when she called the Florida Department of Agriculture and Licensing to investigate the regulations for making gazpacho, the person at the other line blurted, “What’s that?”

“When you’re making a product that is not typical, it’s that much harder,” she said. “A baker looks for a commercial kitchen and she’s going to find the equipment in place. For me it’s been a process of struggling through and educating others along the way.”

Making the product, she added, is often the easy part. “There’s so much more — the business side, the legal side, the product-development side, the marketing side. In the end, you can have the best product in the world, but if people don’t know about it or you can’t get it to them, you’re not going to succeed.”

Florida International University offers an academic incubator for its hospitality students in the campus restaurant-management lab, but it’s not open to the public, said Mike Hampton, dean of the Chaplin School of Hospitality and Tourism Management. Miami Dade College’s Miami Culinary Institute offers cooking courses for food enthusiasts but does not have a kitchen incubator. However, other cities, including San Francisco, New York, Boston, Chicago and Atlanta, have entities that offer varying levels of support, often through public-private partnerships. La Cocina, a San Francisco non-profit, provides funding, kitchen space and operational support to help low-income people start their own food businesses. In New York, non-profit Union Kitchen offers similar support to beginning food-preneurs. And in Kennesaw, a town in the Greater Atlanta metropolitan area, The Edge Kitchen provides shared commercial kitchen space plus support services to culinary start-ups.

Some have taken note of the need in South Florida and are doing something about it.

By the end of the year John Kunkel, the CEO of 50 Eggs Inc., which operates several award-winning Miami restaurants, including Yardbird Southern Table & Bar and the chain Lime Fresh Mexican Grill, expects to open his own incubator on the ground floor of a Biscayne Boulevard building that will also house his corporate offices.

He hopes to operate as a continuing-education venue for both beginning and experienced chefs, restaurant owners and other food business workers by providing workshops and classes with the help of Florida International University, Johnson & Wales University and the James Beard Foundation. The focus: culinary innovation and job-creation.

“The talent pool in South Florida is good,” he said, “but students are graduating local culinary schools and leaving the area. We want to change that.”

Carolina Rendeiro, CEO of Right Space Management, is a serial entrepreneur who has introduced the shared-space concept to other professions. She plans to do her version of the kitchen incubator from a Coral Gables restaurant she hopes to close on in the coming weeks.

She has a ready market: 43 home-based food companies in the Gables. In addition to commercial kitchen space, she plans to provide advice in the form of workshops and private consulting.

Although Miami is ready to become a foodie mecca, it has a long way to go. “Compared to other cities, we haven’t been born yet,” she said. “We’re in the womb, but we have a lot going for us.”

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