U.S. Kitchen Incubators - An Industry Snapshot

 
1.0 INTRODUCTION
 
Over the past five years a significant number of kitchen incubators have opened around the country, prompting the need for a national survey and industry snapshot. Kitchen incubators are shared-use commercial kitchens that culinary entrepreneurs can rent by the hour or block of time in order to commercially produce food products. The need for a kitchen incubator stems from the fact that in many places it is illegal to run a food business out of a home kitchen. In many jurisdictions food products may only be prepared for wholesale or retail in a commercial kitchen that is licensed by the proper local or state regulatory agencies. Even in areas where certain products may be legally produced from home (per cottage food laws), many products still require a licensed facility, and in addition, most home kitchens cannot accommodate commercial-grade equipment and are not appropriate for running a business enterprise.
 
Entrepreneurs who need licensed commercial kitchens often rent space from a restaurant after hours, use a church basement kitchen, or seek any other type of kitchens that may be available. Often these facilities are not ideal due to a lack of flexibility of when the space is available, inconsistent access, expense, and a lack of adequate equipment. Kitchen incubators/accelerators and shared-use kitchens seek to fill this gap and provide facilities for these entrepreneurs. This report speaks to the difference between a kitchen incubator/accelerator and a shared-use kitchen which will be discussed in a later section.
 
Currently there are at least 135 shared-use commercial kitchen facilities across the U.S. and there has been major attention recently around kitchen incubators. An April 11, 2013 article from Initiative for a Competitive Inner City (ICIC) explains, “First it was food trucks, and now it’s kitchen incubators. They are popping up in cities left and right. Once a novelty, the kitchen incubator seems to have become commonplace.” This interest in kitchen incubators is coupled with a trend of increased investment in the food industry. An April 28, 2013 article in The New York Times explained “In the last year, venture capital firms in the valley have funneled about $350 million into food projects, and investment deals in the sector were 37 percent higher than the previous year…” 
 
Expanding interest in kitchen incubators is not surprising considering recent trends in the culinary industry. Across the nation, local, fresh, organic and artisanal products are gaining market share, as consumers buy into the locavore movement. Additionally, kitchen incubators may be viewed as a type of “maker space,” a term used to describe co-working facilities focusing on a variety of handmade products. Increasingly multi-sector maker spaces are including food-industry facilities or full-scale kitchen incubators in their models.
 
While the concept of a shared-use commercial kitchen is not new, the recent batch of incubators demonstrates diversity and creativity of approaches and models. One of the most significant differentiators is that some facilities’ primary approach is providing space for rent and little else, whereas others are incubators in the true sense of the word, providing business assistance and classes, access to low-interest lending, and supporting entrepreneurs in obtaining sales venues, distribution, and contract opportunities.
 
Based on this observed growth in the number of kitchen incubators, Econsult Solutions, Inc. (ESI) decided to initiate a survey of the kitchen incubator landscape in the U.S. The purpose of this research is to inform operators of existing and planned kitchen incubators to better understand national models of kitchen incubators and approaches to culinary micro-enterprise development. In addition this research will inform ESI’s own work as it advises clients who are developing their own kitchen incubator projects. ESI hopes that this survey encourages additional research into national models for kitchen incubators, in order to better inform the industry and encourage local economic growth and new resources for micro-entrepreneurs.
 

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