Startup incubators for food businesses aim to fuel an industry they say is ripe for job creation.
When Nacole and Robert Lee were searching for a brick-and-mortar shop for their 4-year-old fruit arrangement business, unforeseen costs piled up quickly. Licensing, pest control, garbage removal — the hidden expenses put an affordable retail space out of reach.
At Frucasion Fruit Boutique's new home in B-More Kitchen in Homeland, Nacole Lee has space to carve watermelons for intricate fruit displays without worrying about those extra costs.
Frucasion is one of the first small-scale food businesses to move into the communal work space and incubator, which opened earlier this month among a flurry of similar operations emerging to enlarge the pipeline for Baltimore's food industry. Baltimore Food Hub, which broke ground on its five-building campus Tuesday in East Baltimore, will house a commercial kitchen, office space and manufacturing facilities for local food makers. And R. House food hall will provide space for chefs and food producers to test out new concepts when it opens this fall in Remington.
Nationwide, the number of kitchen incubators increased by more than half — to more than 200 — between 2013 and 2016, according to research by Econsult Solutions, Urbane Development and American Communities Trust, the community development nonprofit leading the renovation of the Baltimore Food Hub site. The proliferation of low-cost spaces for food startups in Baltimore will support the city's economic health overall because the growing food industry provides a swath of jobs that don't require college degrees, said China Boak Terrell, CEO of American Communities Trust.
"That's what makes the food cluster so powerful for job creation, and that's why we think it's really important to be able to connect this campus to the food economy," Terrell said.
Food incubators have seen success in other cities. Union Kitchen in Washington, D.C., has worked with about 200 small businesses since it opened in December 2012. Cullen Gilchrist, one of the incubator's founders, estimates that less than 10 percent of those businesses have failed, while about 40 percent of all new businesses that opened in 2012 have failed since then, according to the U.S. Bureau of Labor Statistics.
Union Kitchen was designed to remove barriers small food businesses face, such as those unexpected costs the Lees discovered in their search for retail space.
"You look at small businesses around the country — that's probably one of the biggest and first hurdles they face that a lot don't get over," Gilchrist said.
B-More Kitchen was modeled after and partners with Union Kitchen, which has about 100 members. B-More Kitchen and Union Kitchen will share a distribution network, making it easier for B-More Kitchen's members to get their products on shelves in stores across the Mid-Atlantic. Eben Altmann, B-More Kitchen's general manager, said his space at 5609 Hess Ave. has also streamlined licensing processes for its members, allowing them to secure a health department license in one day, and plans to bring in marketing and accounting experts to lead seminars and consult with members.
"The first piece is really the facility itself, to give all these folks the proper place to run their business — whether it's getting out of the church kitchen or the weekend rental," Altmann said. "Just as important is developing this community where right now there are a ton of these small businesses in the city and surrounding counties. They all kind of get together, but there's no central organization for these businesses, so we would love to be the hub."
B-More Kitchen has five members working in its facility, with three more moving in this week. The space has capacity for about 60 small businesses. When the Lees were looking for retail space a year ago, the spots they were considering ranged from 150 to 300 square feet at $13-$19 per square foot, or $1,950 to $5,700 per month. Their part-time membership at B-More Kitchen, which allows them to work in the space on nights and weekends, runs $750 per month, an introductory rate, Robert Lee said.
"It's kind of like oxygen for the business because it enables the business to grow," he said. "Then you're kind of grouped with other entrepreneurs and businesses where you can get together and talk through different ideas and see what kind of synergies you have with other businesses in the incubator."
Lee said he's already talked with Bottoms Up Bagels' owners, who also work out of the communal kitchen, about collaborating on events. B-More Kitchen has 5,000 square feet of open retail space, as well as an event venue with space for 300 seated guests upstairs. The Accelerator Space, as it's known, already has weddings booked beginning in October, and B-More Kitchen will offer discounts to those who cater events using food from its members.
R. House, the Remington food hall in a former car dealership, will provide another place for chefs and small food businesses to test out concepts for up to two months. The emporium will house a designated pop-up stall as part of 11 vendor spaces when it opens this fall.
"There's an opportunity for entrepreneurship really to expand and for the resources available in our city to support that expansion," said Deborah Haust, director of Humanim's City Seeds program, which will operate out of the Baltimore Food Hub.
City Seeds is a social enterprise that provides job training in culinary fields for people with barriers to employment. The program launched in July and operates catering services and in-house cafes for a number of Baltimore hospitals and schools. Its 10 employees will expand to as many as 70 in the new space at the Food Hub, Haust said.
Another Humanim program, School of Food, will operate out of the Food Hub as well. It offers business development help for food startups, and its next session launches next week. One of its alumni, dessert maker B-More Tasteful, is moving into B-More Kitchen this week.
The Food Hub will look to employ residents of its Broadway East neighborhood — empowering its neighbors rather than displacing them, said Terrell, of American Communities Trust. The 3.5-acre campus at 1801 E. Oliver St. will restore a historic brownfield site with a $23.5 million renovation, including environmental remediation — the site was a 19th-century city water pumping station — new construction and historic restoration. The first building, the campus' only new facility, will house a commercial kitchen and teaching space when it opens in July 2017, and the remaining four buildings, which will incorporate flex manufacturing space, office space and a year-round market, are on track to be completed by July 2018.