Economic Development News & Insight

logo-horizontal

Higher ED Blog: What’s cooking in the world of food incubation

Rian Omollo / February 17, 2015

Tags: , , ,

Higher ED Blog: What’s cooking in the world of food incubation

Food startups face notoriously high failure rates and numerous barriers to entry as they seek to become established in the industry. Entry into the food sector typically requires a high initial capital investment and industry-specific knowledge such as an understanding of licencing and regulation. Most people are not equipped with either of these, and would therefore benefit from the services of a food incubator.

Food incubators are a possible solution to the high failure rate of food businesses because they enable startups to overcome barriers and challenges by offering:

  1. Working space and commercial kitchen equipment
  2. Business guidance and advice with regards to sales, marketing, and distribution
  3. Insight into licencing and legislation within the food sector

While food incubators are established and growing in the Unites States, with over 100 such facilities, food incubation appears to be in its infancy here in Canada. To understand why this is the case, I chose to interview key individuals engaged in microenterprise and economic development in Oxford, Middlesex, Elgin, and Perth counties during my time in the Local Economic Development master’s program at UWaterloo.

I was able to determine that despite the huge importance of food and agriculture in these counties, food incubation is yet to be established. The absence of culinary incubators within the area, however, is not reflective of attitudes towards the practice. Firstly, the consensus was that these facilities have the potential to enable food microenterprise growth, and in turn, create employment opportunities both directly and indirectly. Second, it was noted that supporting the growth of food microenterprises would enable Canada to explore external markets and increase its exports. Additionally, it was highlighted that food startups represent an avenue for reinvention for a region that is still recovering from the departure of several large companies from the manufacturing sector. Lastly, one respondent asserted that while the activities of even a one-person organization are important to the local community, the real impact on the local economy is only realised through growth. Therefore, enabling these ventures to expand their operations ensures that their contribution to the community is maximised in the long-run. Rentable facilities such as community kitchens offer food entrepreneurs space and equipment, but food incubators offer additional services that further ease access to an industry that is heavily regulated and requires a substantial initial capital investment.

Communities interested in establishing a food incubator can look for inspiration south of the border. One great example is La Cocina Incubator Kitchen, located in San Francisco’s ethnically diverse Mission District. La Cocina offers business advice and affordable commercial kitchen rental space to low-income minority and immigrant women in the immediate and surrounding areas. Before the facility was launched in 2005, it was apparent that many of the community’s residents were already creating food start-ups in their home. La Cocina was designed to cultivate this interest in food sector businesses by minimizing risks and barriers. In addition to business advice, volunteers ranging from graphic designers to lawyers offer technical assistance by working with La Cocina clients as they develop their enterprises. Furthermore, the organization connects its users to sales outlets such as stores, events, and farmers markets.

The La Cocina incubation program is split into four sections. During the initial application and enrolment stage, applicants are assessed and admitted to the program based on eligibility factors such as income and ethnicity. Those admitted into the program are then put through a 6-month period during which they receive technical assistance in product development, marketing, finance, and operations. Applicants who successfully establish the foundations of their business get the opportunity to launch their business and take advantage of La Cocina’s network to explore sales outlets. Finally, users typically graduate out of the facility. It is important to note that businesses that are not admitted into the incubation program are still able to apply as commercial kitchen users who do not receive any of the additional offerings. In 2012 alone, the organization supported 39 businesses, created 110 jobs, and generated $3.35 million dollars of revenue.

The theory and practice of microenterprises is dominated by technology incubation, with incubators such as Y-Combinator and Communitech grabbing most of the attention. While technology incubation deserves the spotlight it occupies currently, it might be worthwhile to consider how we can incubate enterprises in other industries. A culinary incubator could be a great choice for areas that are dependent on the food sector as a vital economic base.

The Canadian Acceleration and Business Incubation Association (CABI) clearly recognizes the potential as it is set to launch Food Business Incubators International (FBII), a networking website for the industry, in March 2015. It will be interesting to examine the impact of this endeavour in coming months, and to determine whether it will signal the spark of a food incubator boom in Canada.

About the Author

Rian Omollo is scheduled to graduate from the University of Waterloo’s Master’s Program in Local Economic Development this spring. He developed an interest in examining microenterprise development and its effectiveness as an economic development tool while enrolled in the program. His major research paper, completed under the supervision of Professor Geoff Malleck, is titled: What’s Cooking? An exploration of the present & future of food business incubation in four southwestern Ontario counties. He holds an undergraduate degree in Financial Economics and Sociology from the University of Western Ontario.

Rian was born and raised in Nairobi, Kenya, and is currently based in London, Ontario. He recently completed a contract working with the London Economic Development Corporation (LEDC), the city’s primary economic development agency, as a Research Specialist. He is looking forward to embarking on further opportunities in his career in the economic development field.

  • Academia: https://uwaterloo.academia.edu/RianOmollo
  • LinkedIn: https://ca.linkedin.com/pub/rian-omollo/95/661/651
  • Email: rianomollo@yahoo.co.uk

About the series

Higher ED: Insights for the Next Economy is a platform for students, guest speakers, staff and faculty of the University of Waterloo’s professional and graduate economic development programs to share knowledge with the field at large. The series takes works destined for an academic audience and reworks them into a fresh, easy-to-digest blog article.

Established in 1988, the Local Economic Development program is the only master’s program in Canada devoted solely to local economic development. It offers a balance between theory and practice by combining coursework, a major research paper, an internship, and weekly seminars featuring guest speakers. Students are prepared for careers in local, community, or regional economic development.

The Economic Development Program is a nationally-accredited provider of professional training. It delivers certification programs and seminars that offer a deep understanding of the Canadian context in a convenient block format. Peer learning is combined with informative lectures and practical case studies to provide dynamic instruction that is beneficial for junior and senior-level practitioners.

Comments are closed.