Economic Viability of Shared-Use Kitchens in the North Central Region

Final report for LNC15-374

Project Type: Research and Education
Funds awarded in 2015: $135,819.00
Projected End Date: 01/31/2019
Grant Recipient: Purdue University
Region: North Central
State: Indiana
Project Coordinator:
Dr. Rhonda Phillips
Purdue University
Co-Coordinators:
Jodee Ellett
Purdue University Cooperative Extension Service
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Project Information

Summary:

A shared-use kitchen is a licensed and inspected food processing facility for the production of value-added products, a service that could otherwise be inaccessible for many farmers and food entrepreneurs. Commercial kitchens can save producers and food entrepreneurs from investing in costly equipment to start or run a food business and preserve the season’s harvest to provide additional off-season income. Driven by the increasing demand for locally produced food, shared-use or community kitchens could be considered as an opportunity to support regional food systems and help small farms and local ventures be profitable and thus viable. Their broader impact lies in the development of stronger connections between local producers and consumers, further increasing sales and availability of locally grown food.

Focusing on existing community kitchens, we will evaluate current successful models and design a toolkit for new and existing kitchens, farmers, non-profits, small businesses and others to navigate equipment needs and costs; regulations; return on investment and market potential for products and kitchen use. We will organize visits to existing kitchens with community partners and perform an economic analysis of kitchen viability and the economic contribution on various sectors of the economy.

Project Objectives:

This project involves a two part survey to inform different research objectives, development of an educational toolkit and outreach events and resources to foster learning, collaboration and network development around shared-kitchens in Indiana.

Objective 1: Understand more about shared-kitchens including models, business success, social missions, demographics, funding sources and success. We proposed to survey kitchen owners and managers in the North Central Region to learn more about what they are doing, how they self-identify, why they exist in that location and if they are successful.

Objective 2: Analyze the economic contribution of shared-use kitchens to sectors on the local economy using IMPLAN input/output economic modelling software. We proposed to survey kitchen owners and managers to learn more about where they spend money and how profitable they are to estimate how much they contribute to the local economy.

Objective 3: Engage regional kitchen owners to host tours for farmers, food businesses, technical assistance providers. We arranged three bus tours to nine kitchens in four states to offer peer to peer learning and a firsthand look at the operation and management of different models of shared-use kitchens.

Objective 4: Using the information gained from our site visits, we proposed to create a Shared-Kitchen Toolkit for people who are interested in starting or managing a shared kitchen and the for the organizations who provide technical assistance. We worked with The Food Corridor and Fruition Planning and Management to write and publish a manual that will inform multiple audiences about shared-use kitchen development, management and sustainability.

Objective 5: Create additional outreach materials and opportunities to inform stakeholders of shared kitchen development and management.

Introduction:

A shared-use kitchen is a licensed and inspected food processing facility for the production of value-added products, a service that could otherwise be inaccessible for many farmers and food entrepreneurs. Commercial kitchens can save producers and food entrepreneurs from investing in costly equipment to start or run a food business and preserve the season’s harvest to provide additional off-season income. Driven by the increasing demand for locally produced food, shared-use or community kitchens could be considered as an opportunity to support regional food systems and help small farms and local ventures be profitable and thus viable. Their broader impact lies in the development of stronger connections between local producers and consumers, further increasing sales and availability of locally grown food.

Cooperators

Click linked name(s) to expand
  • Dr. Ashley Colpaart (Researcher)
  • Dawn Meader McCausland (Educator)
  • Dr. Maria Marshall (Educator and Researcher)
  • Tanya Hall (Educator and Researcher)

Research

Hypothesis:

A shared-use kitchen enables small businesses and farmers to add value to raw product, create food products and package them without significant upfront capital investments in a kitchen facility. These rental style kitchens lower the financial barrier to product development and are owned, managed and operated by a variety of people, organizations and communities across the U.S. Little is known about the statistical demographics of these kitchens, nor has there been an analysis of their economic contribution to their locales. In addition to the economic contribution, shared-use kitchens can have a positive impact on the well-being of a community. According to a study conducted in Canada, 81% of the community program participants who used shared-use kitchens reported that they learned how to cook healthy food for themselves and their families. Seventy-five percent appreciated the social value associated with the shared-use kitchen (Fano et al. 2004). Our research was designed to learn more about these kitchens and work with IMPLAN software and the Local Food Economics Toolkit published by the USDA, to quantify the types of kitchens operating in the U.S. and their economic contribution.

Materials and methods:

We designed a two-part, online survey to determine the factors that might enhance viability, sustainability and the economic impact of shared use kitchens. In Phase I, we assessed business characteristics, demographics of kitchen managers/owners, performance of kitchens and kitchen clients and social orientation for success measures. In Phase II, kitchen managers/owners were asked more specific questions about their finances, cash flow and profitability to inform the IMPLAN model.

The survey was distributed to 326 potential kitchen clients using Qualtrics survey software. In addition to the specific email list, a link to the survey was distributed through two national list servs for food systems, and through The Food Corridor newsletter. We received 92 responses (28% response rate) total, and of these, 69 responses were used. Twenty-three responses were excluded from the analysis because they were not kitchen owners or managers, a requirement for the analysis. This small sample size is consistent with two surveys conducted on kitchen incubators by Econsult Solutions in 2013 and 2016, which had 46 and 61 responses respectively.

Farmers: We did not have any kitchens owned by farmers respond to the survey, however, seven kitchens out of 62 (11%) indicated that 21-60% of their kitchen clients are farmers and one kitchen indicated that farmers were 80-100% of their clients.

Research results and discussion:

Profile of owners/managers

Kitchen owners and managers who answered the survey responded to a number of questions about their experience and role in the kitchen. Fifty-seven percent have a bachelor’s degree or higher and 90% are white and 50% are male (n=56). The majority of managers have more than 5 years’ experience in the food industry, with 42% having 5-20 years and 38% with more than 20 years (n=56). Experience in the food industry seems critical, as 79% of kitchen owners/managers provide technical assistance to their clients, including help with licenses and certifications (65%); business counselling (57%); food safety regulation (57%) n=69. The kitchen manager/owner, in turn, seeks technical assistance through the following channels in order of importance (n=69): Small business development centers (67%); University Extension services (54%); University (49%; community development organization (48%); chambers of commerce (42%); community colleges (32%); and consultants (25%). Forty-four percent of kitchen managers/owners receive their primary income from the shared-kitchen.

Profile of kitchens

Our survey sought to understand the structure and longevity of these kitchens. The majority of survey respondents managed kitchens that are non-profit (48%). Shared kitchens represented a variety of business structures including LLC (26%); corporation (9%); sole-proprietorship (6%); cooperative (3%) and partnership (2%), n=65. Eighty-five percent of kitchens surveyed launched in the last 10 years, and most self-describe as a ‘shared-use kitchen’ (32%) or ‘kitchen incubator’ (38%) n=69. There was an equal distribution among kitchens regarding size or square footage that includes storage (90%); shared space (84%); office space (61%); meeting space (50%); loading dock (40%); and store front retail (23%) n=62. Managers described their equipment as basic (52%); specialized (42%) and highly specialized (6%) to support the development of the following types of products (percent of kitchens have equipment for):

88% Sauces

87% Baked goods

87% Jams, jellies

86% Catering

84% Food trucks

77% Candies

52% Fermented food

30% Allergy sensitive

 

Community

Shared kitchens can have a number of roles in a community context, including business incubation, workforce training, food aggregation, food access, health and retail and social enterprise. Sixty percent of kitchens identified that their primary purpose was community oriented, with 29% oriented to profit and 11% to both. Understanding the role of kitchens beyond economic development is an important part of this examination. When asked to describe the function or role of their kitchen, managers/owners included (n=67):

62% Allows specialty food business the opportunity to start up

61% Allows specialty food business the opportunity to grow at their own pace

59% Helps remove restrictive barriers of high cost capital investment associated with leasing or purchasing a kitchen and equipment

53% Reduce risk of failure by removing additional startup barriers associated with limited skills in managing and maintaining and commercial kitchen

44% Offer resources related to distribution, branding, marketing, accounting, insurance, and financing new products

18% Has minimal infrastructure, equipment, and business support

11% Has primary income as a separate business and leases kitchen when it is not in use (i.e. restaurants, function space)

11% Manufactures and packages foods according to other food businesses specifications

Participation Summary

Education

Educational approach:

Our educational approach was to 1) Engage clients one-on-one in tours, learning from kitchen managers/practitioners; 2) Create robust written technical informational materials for widespread distribution and 3) Host a national workshop to train technical assistance professionals from Extension to understand and learn about shared use kitchens. Working with a new startup company, The Food Corridor, and consultant from Fruition Planning and Management, we were able to form a public-private partnership to create a comprehensive guide, and deliver the national workshop.

Written and edited by kitchen managers and experienced professionals in the field, the Shared Kitchen Toolkitis a robust new resource for the development and management of kitchens. It is a free, downloadable pdf. In addition to the Toolkit, we worked with Fruition Planning and Management to create the additional technical resource that specifically addresses the needs of organizations who may be considering opening up their existing kitchen for rental in the 20-page guide: Opening Community Facilities to Food Entrepreneurs: Guidance for Communities and Facility Operators.

In June 2018 as part of the National Association of Community Development Extension Professionals (NACDEP) conference, we presented a full day workshop in Cleveland, Ohio, ending with a tour of the Cleveland Culinary Launch.

Project Activities

Shared-Kitchen Tours (three)

Educational & Outreach Activities

10 Consultations
2 Curricula, factsheets or educational tools
4 Tours
1 Webinars / talks / presentations
4 Workshop field days

Participation Summary

10 Ag professionals participated
Education/outreach description:

TOURS:

Three tours to shared-use kitchens, each day-long trip visited three kitchens.

Illinois Trip: March 30, 2017

ArtHouse – Gary, IN – 2,200 sq. ft. urban kitchen housed in a facility that hosts community-building events and includes an art gallery/exhibition space.

River Forest Kitchen – River Forest, IL – 600 sq. ft. suburban kitchen with an outdoor greenhouse and garden. Offers food business consultation services, indoor and outdoor event space, and kids’ camps.

ETA’s Commercial Kitchen Rental – Highland Park, IL – 1,400 sq. ft. urban kitchen that provides essential kitchen basics for food entrepreneurs.

Michigan Trip: April 11, 2017

CookSpring – Fort Wayne, IN – 2400 sq. ft. urban kitchen located at The Summit, “a shared campus of socially-minded organizations working together to make the community thrive.”

Washtenaw Food Hub – Ann Arbor, MI – Rural food hub that houses a bakery kitchen and a commissary kitchen. A farm market and agricultural education event space are currently being added to the building.

Flint Food Works – Flint, MI – Urban kitchen co-located with the Flint Farmers’ Market, an indoor market facility that operates with 50+ vendors year round.

Kentucky Trip: April 28, 2017

Indy’s Kitchen – Indianapolis, IN – Urban kitchen equipped for catering and pastry preparation.

Incubator Kitchen Collective — Newport, KY — Kitchen collective that fosters a strong sense of community by hosting public events and connecting renters with local resources.

Chef Space – Louisville, KY – 11,000 sq. ft. kitchen space offering multiple specialized kitchens for hot, cold, and pastry prep.

EDUCATIONAL TOOLS:

In conjunction with our collaborators at The Food Corridor and Fruition Planning & Management, a 200 page toolkit to help launch, support and manage a shared-use kitchen is in the process of publication. Along with PDF will be an interactive online wiki, hosted by The Food Corridor.

Learning Outcomes

20 Service providers reported changes in knowledge, attitudes, skills and/or awareness as a result of project outreach
20 Agricultural service providers reported changes in knowledge, skills, and/or attitudes as a result of their participation
Key areas taught:
  • Role of shared use kitchens in a local food economy
  • Shared kitchens make food business dreams a reality, and incubate food businesses for the community.
  • Kitchen managers are a 'rare breed' and provide a number of key services for food businesses, including: connections for sales, commercial kitchen use, marketing and business building, and start-up support.

Project Outcomes

Key practices changed:
  • Participants in our project were shared kitchen owners and food system educators from Extension from the North Central Region. All of them shared how much the tours helped better understand shared kitchens, the challenges of starting and sustaining these kitchens, and the skills, experience and knowledge necessary to manage this type of endeavor.

3 New working collaborations
Success stories:

This is a sample of evaluation results from participants in the Educational Tours. These comments reflect how effective the tours were on learning about the big picture of running a shared kitchen, down to the practitioner details of how to teach kitchen clients better sharing skills.

From Extension professionals and other educators:

“Our Extension office has a commercial kitchen that isn’t regularly used during the week. This was insightful into possibilities for our kitchen”

“To better serve and direct commercial vegetable and fruit producers on the cost-effective idea of shared-use kitchens for value-added products.”

“I teach the ServSafe Certification Class on a monthly basis and I often have class participants that are interested in starting a small business in the food industry. Many share their interest in owning a food truck or opening a booth at a farmer’s market. I attended the “shared-kitchen tour” hoping to gain knowledge to guide this group a bit better and to connect with a network of people that could act as a reference for these students.”

Evaluation also asked what tour participants thought of the role of a shared kitchen manager/owner:

“Owners/managers work to understand the needs of food providers in their service area and then construct shared-use kitchens to meet those needs and provide resources to food providers to help them be more effective in their food system roles. Owner/managers serve as connectors and facilitators of food production processes in their service area.”

“The ability for a small start up to have access to a commercial kitchen for a nominal fee is important for getting small businesses off the ground.”

“They play a major role in creating a sustainable local food economy. They are advocates, educators and help make critical kitchens across the local food system.”

“To empower racial minorities and women, boost local economy.”

“I suggested that for the needs of my community partners – we would be better off working using a church kitchen for the next few years instead of trying to open a commercial kitchen. Our kitchen is needed for educational purposes and the amount of time and money going into a commercial kitchen is not sustainable for us (at this time).”

For practitioners, or those who already manage/own a shared kitchen:

“I’m in the process of opening a commercial kitchen in Minneapolis. I found value in meeting others who are involved with kitchens and learning from the 3 kitchens we visited. The operational intelligence was invaluable. My learnings will help shape how I operationalize my kitchen.”

“We are currently reviewing our pricing structure for storage. We need to update and improve our marketing with pictures of people in them to show community.”

“We’ll adopt some new storage options as well as consider the benefits of putting everything in the kitchen on wheels.”

“To be able to effectively build community within a shared kitchen, it will be necessary to create a system in which the members can communicate with one another outside of the kitchen.”

“The kitchen managers seem to be the “connectors” in terms of how they work to bring the awareness of local foods to those using their shared- kitchens. Taking into consideration the shared-kitchen in Flint, Michigan – Sean, the kitchen manager, talked about walking people through the steps of starting a business. He talked about the importance of having a business model and provided kitchen users with the names of those that would assist in coming up with a solid model. He talked about the importance of having those using the kitchen have the opportunity to sell their goods in the indoor farmers market. This is where the community is exposed to the idea of supporting local foods and local producers. Kitchen managers seem to be passionate about the idea of bringing local foods, the community, and small businesses together for the greater good.”

Recommendations:

This project helps push forward understanding on the operations and benefits of shared-use kitchens as food business incubators and as a way to help producers bring value-added food products to market. By connecting with both organizations and individuals involved in shared-use kitchens, we were able to provide information that otherwise may not have been as accessible, especially for producers. Also, an outcome is the value created by linking Extension to shared-use kitchens across a network in Indiana and other Midwestern states. This serves in turn to help distribute the information to a wider audience of those interested in either establishing or strengthening an existing shared-use kitchen in their community or region, and those who want to access these type facilities for producing their products. Additionally, we think outcomes are impacted by the distribution of the findings of the work conducted in the project, including downloadable resources. ​

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.