Spices and ingredients for food companies
The Kitchen Coop founder and executive director Jeff Greenberg saw a way to solve the chicken-and-egg dilemma for local food startups as they attempt to go from great ideas in small kitchens to full-fledged food manufacturers. The recently hatched company provides startups with manufacturing, packing and other services like business consulting, food scientists and even ingredient sourcing to make the transition for promising food brands easier.
Greenberg's background in operations management consulting included work with food companies with revenues up to $30 million. After working with a $300,000 company, he found there was a quality difference in terms of available services small companies received. The smaller company worked in a commissary with about 12 other companies and had no onsite access to co-packing or warehouse facilities or operations help.
"They were all struggling,” Greenberg . "Co-packers are not interested in small companies. I saw it as an opportunity to create kind of an in-house consulting service in a food manufacturing environment.”
The Kitchen Coop launched fully launched in April 2013. The 20,000-square-foot facility has five production kitchens, a test kitchen Greenberg says can be used for production "in a pinch.” One of its two packaging facilities is gluten-free and the other is conventional.
"The response has been very strong,” Greenberg says. "There are a lot of people interested in working with us that might be either too small, or undercapitalized, or both.”
As of January 2014, The Kitchen Coop has 14 clients, among them: Seafood Specialties, Hot Dang, Poparuba, Zaza Raw, Pie in the Sky Bakery, Bella Gluten-Free, Braaap Nutrition, Saquito Mix, and Cholaca.
"The exact part of the market and the way we're going about this is unique in that we're targeting the under $1 million market,” Greenberg asserts. "In terms of scale of facility and level of professionalism in the the company, there's nothing like it for these companies.”
The Kitchen Coop supports clients with classes and newsletters, he says. Two clients have already graduated out of in-house programs. "One of them was a nut-butter company and one was a pancake-batter company. They had no distribution,” Greenberg says. Now they're using larger co-packing facilities and the pancake batter company will be in about 1,000 stores, he adds.
"We still have capacity, we're mostly running days. We still have nights and overnights available and some days,” Greenberg explains. He says that the company could probably have more clients, but does not want to spread it too thin.
"The ones we are helping are growing at a faster rate and doing better than we anticipated,” Greenberg says. Some clients saw sales grow 250 percent within two or three months of joining The Kitchen Coop as distributors picked them up. "We've gotten high scores on our audits, distributors are happy to work with us because of it and it's helped propel their [clients'] growth.
Challenges: One challenge is explaining the model to clients. Another is evenly sharing the The Kitchen Coop's staff of food experts' time with clients. "It's still a challenge to make sure they get the same amount of hours every week,” says Greenberg.
Opportunities: "I think there's a huge movement toward local food,” Greenberg says. "Whole Foods is growing at 10 times the normal food market. It's the only part of the food market that's growing.” He adds that there's also an opportunity for more investment, as similar incubators could be built in other markets in places like Austin, the mid-Atlantic seaboard, and San Francisco.
Needs: "More independent mentors with our clients and for more of the industry to know we exist,” Greenberg says. The company also needs a large anchor client and more downstream relationships with sales and grocery stores, he adds.