Kitchen Incubators Are Popping Up To Help New Food-preneurs

By Ana Veciana-Suarez
The Miami Herald.

Clara Botero, a self-proclaimed health foodie, has been baking for others since she was a child. So when she needed extra income after a divorce, she began looking for shared commercial kitchen space for her burgeoning company, Dulce Bean.

Two months ago she found it in a nondescript former restaurant in North Miami Beach, where she whips ups gluten-free products like Organic Wheat and Gluten Free Chocolate Ganache Peanut Butter Cake and Dark Chocolate Almond Thins to sell online and to local coffee shops and health food stores.

Her dream: “To eventually have a place of my own.”

Across town, Eva Alcaraz-Arango rents space from a commercial bakery in far West Kendall for her business Gazpacho Alcaraz, the Drinkable Salad.

Her gazpacho, a cold, tomato-based Spanish soup that features green peppers and cucumbers, has done well enough that her work space has grown to include her own room — she still shares a large refrigeration unit — a special blender she brought from Europe, and an industrial vegetable peeler.

Her product is sold by Epicure, The Fresh Market, Delicias de Espana and other gourmet coffee shops, bakeries and markets, and her business was selected as one of 100 finalists in the FedEx Small Business Grant Contest, which recognizes innovators and start-ups. She, too, dreams of a place of her own.

As South Florida’s food trade simmers into national recognition and food-preneurs try to catapult their products into bigger markets, companies are cropping up to provide shared kitchen space and advice on everything from license applications to social media marketing.

Dubbed kitchen incubators, these spaces enable a new business to make and package foods that meet strict preparation and sanitation standards for a fraction of what it would cost a starting entrepreneur to outfit her own commercial kitchen.

Equipment for a very basic commercial kitchen costs at least $150,000, according to Kefren Arjona, managing partner of Commercial Kitchen 305, the North Miami Beach incubator where Botero bakes and packages her sweets.

Arjona rents the use of his 1,500-square foot facility starting at $17.50 an hour. Other commercial kitchens charge similar prices, from $20 to $25 an hour. Most usually require a minimum block of hours and a lease.

There is no definitive count of how many kitchen incubators exist in the area, and food-preneurs complain that South Florida lacks a public-private consortium to help start-ups, which many other cities have.

Alcaraz-Arango, for example, searched off and on for almost nine years for the right rental arrangement, and found it only after a conversation with a neighbor. A friend, who was going to partner up with her own food company, gave up.

According to Econsult Solutions, a Philadelphia consulting firm, there are about 150 kitchen incubators nationwide. Of the 40 that responded to a recent survey, more than 30 had been in business for five years at most.

At Commercial Kitchen 305, which is less than a year old, tenants include a half-dozen caterers and four bakers as well as a handful of local restaurants that use Arjona’s equipment on an as-needed basis to test new menu items.

Most of his tenants began their businesses at home, and now want to expand with minimal capital. “This gives them options without the big investment,” Arjona said.

Under Florida’s “cottage food law,” anyone can make certain food products — namely, cakes, cookies, breads, candies, fruit pies, jellies and jams — in an unlicensed home kitchen if sales do not exceed $15,000 a year and if the products are sold directly to the consumer.

That makes certain settings, such as farmers’ markets, a popular, if limited, venue for new food businesses to introduce their wares to the public. (Other products, such as the Gazpacho Alcaraz, which is made entirely of fresh produce, must always be made and packaged in a licensed commercial kitchen.)

For a product to be sold wholesale or over the Internet, however, or when sales surpass $15,000, the law requires it to be produced in a licensed kitchen.

The food-production business attracts lots of part-timers who hold down other jobs, particularly single parents — like Botero — who are trying to supplement their incomes.

“Most of our clients are moms, single parents, baby boomer ladies,” Arjona said. “It seems that for whatever reason these ladies found cooking and baking the answer to their need or dream.”

Kitchen incubators are also popular in urban areas, where rent is high and sharing space is the easiest way of keeping overhead costs down.

Adam Zwingler, a yacht chef, has been running the numbers for his new business, Zwacoz Tacos, for almost four years and hopes to launch it in April or May, beginning in the Aventura corporate center.

But the concept — delivering gourmet lunches to offices — only works in highly dense commercial areas of a city, where a new business usually can’t afford an expensive lease.

“When you’re starting out,” said Zwingler, another Arjona tenant, “you have to figure out a way to keep all costs down. You do everything yourself. But with an incubator the system is already set up to help you along.”

Not all those who call themselves kitchen incubators are created equal, however.

Some provide only space, rented at an hourly, daily or monthly rate often determined by the length of the lease.

Most, but not all, provide all the necessary equipment. A few throw in advice, either as part of the rental agreement or for an extra fee.

Well-informed advice often makes the difference between success and failure.

At Commercial Kitchen 305, Arjona requires all tenants to sign a kitchen booking agreement, similar to a lease, that details the initial requirements to rent space, including providing copies of business licenses from both the city and the county, food management or handler certificates, and a food vendor license from either (or both) the Florida Department of Business and Professional Regulation or the Department of Agriculture.

In addition, the business owner must fill out a detailed questionnaire that asks a variety of questions, from the company’s target market to its social media presence.

“People have a good product but have no idea of the business side,” said Eligia McKenna, Arjona’s business partner. “We’re here not just to rent the space. We’re also here to offer guidance from A to Z, and we want to know what you need, what your experience is and where you want to go.”

Botero, 33, likens Arjona and McKenna to sports coaches. They teach her the ropes, push her to succeed and provide encouragement when she’s down. “They’re always on my back,” she joked. “Kefren is after me, “Did you do this? Did you do that?’ ”

At Chefs4You, an incubator near the Mall of the Americas in West Miami-Dade, chef and restaurateur Edgar Ariza seeks to provide a similar environment for the two tenants, both bakers, who rent his commercial kitchen during off-hours, when he’s not using it for his own restaurant and catering business. He requires a one-year lease. And, like Arjona, he also pre-screens new businesses.

“We are very anal who we sign up,” he said. “I’m not interested in somebody doing this once a week as a hobby or something. We want people who are serious about growing their business.”

As a kitchen incubator, Ariza faces two recurrent issues: People want to sign up for minimal hourly rates or a short lease while continuing to make their product at home, an illegal practice that he does not condone. “We don’t want somebody getting sick on a product that has been made in our kitchen,” he said. “Our license is on the line.”

And second: He often meets prospective tenants who “have no clue about the numbers, about what it costs them per unit, the number of employees they might need or how long it takes to produce. You can’t run a business that way.”

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