The ups and downs of sharing commercial kitchen space

Shared commercial kitchen spaces and food incubators have become a growing force in an era when more entrepreneurial foodies are turning their food and beverage specialties into businesses selling direct-to-consumers and via retail and foodservice outlets.

The kitchens foster a sense of community that can result in lasting ties, which come in handy when something happens to break up the group. Sometimes a business is just ready to move into the next phase and grow into a bigger space. Other times, change is thrust upon them when the facility they’re operating in closes abruptly, as happened at Pilotworks in Brooklyn, N.Y., last year.

As of 2016, there were more than 200 food incubators in 39 US states, a 50% increase from just three years earlier, according to a report by Econsult Solutions. Sixteen of those facilities were in the New York-New Jersey-Jersey City, N.J., market, including Pilotworks.

Pilotworks, which began life as Brooklyn FoodWorks, boasted 11 kitchens in 10,000-square-feet in the borough’s Pfizer building. At its peak, the facility leased space to about 175 small companies that used the place for cooking, packing, storage and distribution.

The incubator grew fast, with plenty of venture capital backing, including a $13 million infusion last year, but it also grew overextended as it expanded rapidly to new cities including Chicago, Dallas, Newark, N.J. and Providence, R.I. Last October, the company suddenly notified tenants that the facility was closed and gave them about three days to remove their equipment and product.

The community shifted into high gear, organizing and helping each other connect with resources to help them find new digs and keep going.

“It’s taken an interesting kind of turn since then,” said April Wachtel, founder of cocktail mixer company Swig + Swallow. “All the chaos seems to have sorted itself out and people realized they were in charge of their own fate.”

For some there was further disappointment after another company launched plans to acquire and reopen the space, only to scrap the idea.

“They started reaching out to the former people to see if we were interested in going back in,” said David Roa, whose Superlost Coffee had been a tenant. “Then about a week [before it was supposed to open], they backed out. From then, I heard rumors of people trying to get together and see if they could rent the space.”

Superlost was largely using the space for cold brewing and storage of its products before they were delivered to area retail outlets. The company had also been working with a coffee roaster in the Bushwick section of Brooklyn, and it had enough inventory on hand to serve customers through the transition. Now, Superlost is preparing to move into its own facility.

Similarly, many of the startups that were operating in the Pilotworks facility landed on their feet, with some finding other commercial kitchen space and others ready to open their own spaces, Roa said.

Shared kitchens, shared experiences

The Pilotworks story may be more the tale of a venture-backed startup that tried to grow too fast than an indicator of the state of food incubators and shared kitchens in general.

According to a May 2017 report by The Food Corridor and the Network for Incubator and Commissary Kitchens, 82% of US incubators had booked revenue increases over the previous three years and 76% were either breaking even or making money.

For the Pilotworks tenants, the connections made during their time working in the shared kitchens and their entrepreneurial spirits meant they wouldn’t be down for long.

Wachtel found space with another company that has a facility in the Pfizer building, so she’s near her old digs and she still sees some of the entrepreneurs she used to share space with, she said. She has also gotten involved in a group that offers mentoring services to other women entrepreneurs.

Both Wachtel and Roa shared some advice for startups considering going into shared kitchen space.

“Community is the most important thing,” Roa said. “It’s important to surround yourself with others who are doing similar things.”

When the abrupt end came, that sense of community meant people immediately began sharing resources to help each other survive and figure out what came next, he said.

Typically, shared kitchens and incubators can be one of the best ways to get a new venture off the ground and form a network of others who are in similar shoes, Wachtel said.

“There are lower costs and access to professional tools and kitchens that are already approved by the Department of Health and the Agriculture Department, and it’s also good being around other entrepreneurs and being able to talk things through.”

For businesses that succeed, though, there comes a point when it’s time to move on and move up, she said. Wachtel knew before Pilotworks closed that that time was fast approaching, and the abrupt end forced her to take that next step and move to bigger digs.

That particular kind of upheaval is unusual at most shared spaces, Wachtel said, but entrepreneurs have to be prepared for whatever comes.

“There will always be these moments of distress. In an ideal world, you have considered the alternatives ahead of time, so you’re not completely shaken when it happens.”

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