Startup in­cu­ba­tors link up with food in­dus­try

Lead­ers say or­ga­ni­za­tions will help Bal­ti­more’s eco­nomic health

Baltimore Sun - - FRONT PAGE - By Sarah Mee­han

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 seem 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 than10 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.

KIM HAIRSTON/BAL­TI­MORE SUN

Na­cole Lee, owner of Fru­ca­sion Fruit Bou­tique, and her hus­band, Robert Lee, work in B-More Kitchen in Home­land, one of sev­eral food in­cu­ba­tors in Bal­ti­more that pro­vide mem­bers with low-cost com­mer­cial kitchen space and ser­vices.

KIM HAIRSTON/BAL­TI­MORE SUN

Max Reim, owner of Pie Time, mixes peach pie fill­ing at B-More Kitchen for desserts he will sell the next day at the Bal­ti­more Farm­ers’ Mar­ket and Bazaar. An­other in­cu­ba­tor, Bal­ti­more Food Hub, broke ground on its five-build­ing cam­pus Tues­day in East Bal­ti­more.

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