Growing a Food Business

cropcircle

More Than a Recipe and a Good Idea
by Cynthia Graber

The Happy Pig Salumi guys are zealous in their enthusiasm for locally sourced, ethically raised, delicious charcuterie. From their home base in Somerville, they look out and see a wide open New England market, one that hasn’t yet been saturated with competition, for their fresh bratwurst, breakfast sausage, sopressatta, andouille and kielbasa.They’ve also focused their creative juices on the requisite bacon, offering slabs redolent with hazelnut, lemon and coriander, gin, Chinese five spices, hops, even one cured with Taza cacao beans and smoked over cacao shells.

But though the pigs in their products may indeed be happy ones, the business owners aren’t yet quite as ecstatic as their name might imply.  A new food business, particularly one that works with curedmeat, needs access to a commercial kitchen that meets a slew of local, state and national requirements. The kitchen must contain industrial equipment both for preparation and for cleanliness. Some products must be maintained at a constant 60–62° F. Others need to be stored at temperatures below 40° F.

Building a suitable kitchen for themselves would cost the fledgling company hundreds of thousands of dollars. “And the rent for commercial kitchens is pretty dire,” says Happy Pig co-founder Dan Meyers.  “Kitchen space is limited and ridiculously expensive.” (Not to mention time-restricted: People who manage to rent space in restaurants have to work in the off-hours. For Christine Oliver, who founded Lion’s Share Food, that can mean chopping cabbage at 3 or 4am to make her mouth-tingling kimchi.)

Local residents have already begun clamoring for Happy Pig products, their appetites whetted at Boston’s Beer and Bacon festival at the SoWa market this past spring. The owners, however, can’t fill all the product requests with the time they manage to steal at hospitable restaurants.

“We’re trying to stop people from ordering, because they’re too enthusiastic!” exclaims Matthew Stein, the salumi-maker. He laughs. “It’s a good problem to have.”

The problems faced by Happy Pig Salumi exemplify those of other small-scale food companies in the Boston area and around the country.  Often, the founders start out making their baked goods, jams, sauces or meats as a hobby, and are then encouraged by friends and fans to expand.  They quickly come up against a maze of local, state and, depending on the product and where they’re selling, federal regulations.  Rules may differ from city to neighboring city: Some don’t let wholesalers sell to farmers markets; some don’t let producers share kitchens.  If a producer moves because they’ve found a better price or time slot at a kitchen in another town, they have to start the whole local process over again.

The rules also differ for frozen goods, fermented goods and baked goods. And would-be business owners confront kitchen and equipment costs that can price many out of the market before they even begin.  Luckily, an increasing number of services are sprouting to help them out.

Space to Share

The kitchen clangs with activity at Crop Circle Kitchen in Jamaica Plain. The owners of Batch ice cream unload paper pint containers in a rhythmic thump, providing a bass line for the hiss of tomato sauce on the stove and the calls of cooks as they navigate around one another.  Crop Circle is a community kitchen, an incubator for small food businesses.  “There are barriers to entry and barriers to growth,” says director JD Kemp. Kemp had worked at a technology incubator, and he’d also participated in the early stages of 11 companies and co-founded four. But he had always been interested in food, and in fact had worked briefly as a chef in graduate school. He decided to take his practical business experience and apply it to his passion: “I was starting to see patterns… I wanted to solve the problems, and allow people in the food business to stay in the food business and not worry so much about all the other details—access to facilities, resources and support to build their businesses.”

Kemp and a small, equally committed team rescued the now-defunct Nuestra Culinary Ventures community kitchen, which had not been able to solve financial and management challenges. Kemp and his colleagues spent a year investing in renovations, negotiating with the City of Boston and creating a business plan that would allow the organization to become financially secure. The former NCV now houses Crop-Circle Kitchen.

Today, the space contains dry storage with locked cages for equipment, ingredients and glassware. The kitchen has six cooking stations, stoves and ovens, access to fryers, stainless steel tables, a prep sink, a wash-down sink. There’s a walk-in cooler and freezer. All this is compressed into 4,600 square feet, with nearly two-thirds of it devoted to the main kitchen.

“Any kitchen with multiple health permits is a huge pain for the health department,” says Kemp. “We’re hugely inspected. They’re willing to deal with that because we’re creating jobs, and turning people out who go off and work in commercial kitchens.”

CropCircle currently provides its kitchen services to approximately 30 nascent companies. “We’re graduating two companies this month,” says Kemp. One of them, the popular Clover Food Truck, has relied on the kitchen at CropCircle to prepare its sandwiches, fries and snacks.

The company is moving into its own commercial space later this year.  Batch ice cream is another recent CropCircle Kitchen success story; the two founders say they couldn’t have considered starting a food business without access to CropCircle’s facilities. “We were taking a chance doing this,” says co-founder Susie Parrish. “We were coming out with a new ice cream, and there are a lot of ice cream producers in Boston. Are people going to be into [our product]? This way, we didn’t have to lease a space and outfit it with all the things you need to be classified as a commercial kitchen.” They also relied on assistance from Kemp in navigating the Boston licensing requirements, and utilized business coaching provided by the local beer company Sam Adams.

Batch quickly had to contend with another problem: How should they get their ice cream onto the shelves of the stores willing to stock it?  Larger stores demand large amounts of inventory. The distributors who act as the middleman between producers and vendors also tend to take on clients that supply hefty volumes of product to large stores, and distributors usually charge a significant markup for their services. This eats into a food business’s thin profit margin.

Smaller stores might be willing to take a chance on a handful of samples from a new, local producer. But would the Batch owners have to deliver ice cream around the city, store by store, themselves? Would they have to buy a truck with freezer capacity? Who would then make the ice cream?

“We lucked out,” says Parrish.

Kemp was already aware of this distribution problem as one of many brambles that could snag a food business. He devised a new system, which he calls “a cross between FedEx and Ebay.” The outfit, called the Northeast Food Exchange, operates six trucks that drive routes throughout New England and allows small food companies to negotiate directly with stores. Producers pay only shipping fees. Batch ice cream pints regularly hitch a ride on these new delivery trucks.

Kemp says he’s getting a wave of emails from people expressing interest in renting time at CropCircle, which assures him that they’re meeting a need. But, he says, the community kitchen is still relatively small: “We have more demand than we’ve got space to deal with it.We want to support and provide services to the people who need it.”

He has dreams for the future, including a secondary space where a couple of larger companies that have outgrown CropCircle’s facilities could park themselves for four to six months as they further nurture the growth of their business and save up to open a commercial kitchen of their own.

And he’s hoping that a new community kitchen on the other side of the river might also help meet the local food demands.

Cambridge’s Own

One evening in September, at a large double room at Lesley University in the Porter Exchange, residents pack in to learn more about the planned Cambridge Community Kitchen. Founders hope that it will be a shared space for cooking education, for nascent companies, for caterers in search of commercially certified stovetops and ovens, and for the occasional need to, for instance, can a massive amount tomato sauce or cook for a huge party. In addition to the kitchen, founders also hope to provide a market space for these companies to sell directly to consumers.

Board members—including Stein and Meyers of Happy Pig Salumi—sit at the front of the room and explain the various goals of the proposed kitchen, which is still in search of a physical home. Then they split the room into groups to brainstorm about location, fund-raising, outreach and partnership, education and operations. Attendees eagerly share ideas for locations and explain their own future needs.

“People have been coming out of the woodwork, getting in touch with us, because they want help getting their businesses started,” says Meyers. “Caterers and people who make jams and hot sauce and people who want to do curing and smoking.”

Kemp hopes to provide expertise, so that the Cambridge founders can leapfrog over his own learning curve with CropCircle Kitchen. He also hopes the two facilities will each have particular strengths. For instance, there’s a desperate need for space for caterers, but CropCircle can’t clear everyone out for high-volume catering times, such as Fridays in June before wedding weekends. Kemp expects that the Cambridge Community Kitchen may be able to fill that niche.

JJ Gonson, on the board of the Cambridge Community Kitchen, has grand catering plans. She can’t cook out of her own kitchen for clients; there’s no way to legally certify a home kitchen in Cambridge. (In other cities such as Somerville or Watertown, this is theoretically legal but often prohibitively expensive.) Instead, Gonson cooks at her clients’ homes as a personal chef. “I’m eager to have a place where I can go to prepare food that I’ve stored there,” she says, “so I don’t have to carry 40-pound boxes of potatoes to someone’s house, to cook to make mashed potatoes for a party.”

Building a kitchen incubator and community space is significantly more expensive and complicated than putting together a technology incubator. The costs for space and equipment, and the challenges in meeting all the necessary health and safety requirements for a wide variety of food production needs, can be daunting.

Plus, in order to meet the needs of the Happy Pig Salumi company for meat preparation—and for any other budding company hoping to process local meat for wholesale—the facility will have to fulfill USDA requirements. This adds another layer of both logistical and financial complications, as these regulations were originally set for major slaughterhouses and meat-processing facilities, not for artisanal meat production.  Still, the board members are all optimistic that the group will be able to raise the necessary money, find a location and build out the space within a year. Adds Stein, “When you look at bridging the gap, jumping from being a small-scale producer for orders for friends and family to being able to sell on a wider scale—this can make that difference.”

Cynthia Graber is an award-winning print and radio reporter based in Somerville.