Station Food Hub hungry for tenants
Agri-business centre expands into shared office space, storage
The two entrepreneurs behind the Station Food Hub are doubling down on their investment with the launch of a puréed food operation expected to generate up to an extra half a million dollars in revenue from food now going to waste.
“We’re building a full food production facility in one of the rooms in our building; we start construction in two weeks,” said Rebecca Tran, co-founder and a managing partner of the agri-food centre in Newport Station.
“That will give us the ability to use waste products and add value.”
Farmers typically leave as much as 40 per cent of their crops in the field because the produce simply does not meet the specifications of the big grocery store chains.
“We will pay the farmers to bring it to us and then we will make it into products,” said Tran.
Say hello to Purée Scoops. Tran, a former public health dietician, and her partner, Heather Lunan, founder of the now-closed
Pie R Squared savoury pie and quiche business, hit on the idea of buying the unused food and turning it into single-ingredient purées during the pandemic.
Purée Scoops will be sold in individual packages to allow cooks to make soups.
“Our business model is catered towards institutions: hospitals, nursing homes and correctional facilities,” said Lunan.
“We do not yet have a signed contract but they are very interested.”
The duo estimates the potential annual revenue from Purée Scoops to be roughly $500,000 from an investment of another $150,000 in their agri-food centre’s sister operation, the Station Food Company.
GOT CRACKING WITH EGGS
Through that company, Tran and Lunan also plan to open an egg-grading station in the hub for egg producers in the region with another investment of about $100,000 in equipment. Under current guidelines, egg producers are not allowed to sell ungraded eggs anywhere but on their farms.
“We’ll be providing an opportunity for small egg producers to have their eggs processed in a facility that is regulated by the Canadian Food Inspection Agency,” said
Lunan.
“It’s just a question of building the facility and getting the setup approved.”
The partners created the food hub by buying the former Newport Station District School two years ago with $245,000 of their own money. It took another $250,000 to renovate it.
Among the additions was a storage system with tanks capable of holding 12,100 litres of rainwater from the building’s 17,000-square-foot roof to get better water for the facility’s commercial kitchen. By last spring, it was ready to accommodate tenants in the 700-square-feet former classrooms at a lease rate of $25 per square foot.
Shivani Dhamija, owner of spice and sauces maker Shivani’s Kitchen, moved her business into two of those rooms last March.
Colombian Cravings, a company that makes and delivers Colombian food, and PieceMeal Food Provisions use the commercial kitchen to whip up meals but do not rent space.
Tran and Lunan rent the kitchen in five-hour chunks at prices ranging from $86 to $125 per block, depending on the time of day. It’s up to those renting to have a business permit and liability insurance for the products they make.
REVENUE TIGHT
In its first full year, the food hub brought in about $50,000 in revenue, not nearly enough to break even. According to Tran, the magic number to cover expenses is $15,000 per month, or $180,000 in annual revenue.
Things were ramping up by the end of the year. But, even by December, monthly revenue was only about $9,000.
The fly in the ointment was COVID-19.
The pandemic knocked some prospective tenants out of the game early. Last March, Tran and Lunan had one lined up for four rooms. That lease alone would have been worth an estimated $70,000
annually, but the deal fell through at the last minute.
“Margins in the food industry are slim at best, and for someone to go into a food production business during a year when we had no idea what was going to happen was just too scary,” said Lunan.
Faced with a paucity of prospects, they decided to create their own agri-business production operations, egg grading and purée production through the sister company and have it rent space.
They also branched out into non-food businesses.
One room has been converted into a self-storage facility. Each of its 100-square-foot lockers rents for $180 per month.
In one room, the food hub offers a boardroom, office services and six spaces at $150 per month for other businesses to set up shop. The first tenant in that fledgling business centre is a bookkeeper.
As a startup, the operation hasn’t been able to avail itself of many of the government assistance programs. Canada Emergency Business Account loans of $40,000 and $20,000 have helped.
The pair hope to make headway on another project. The Station Learning Farm, a non-profit operation where they hope to invite residents to grow food on the former school’s soccer field, is intended to be the community mission side of the business.
That farm could be bigger since the property boasts nine acres of land but much of that is wooded and home to wildlife that neither Tran nor Lunan want to disturb.