How to Start a Food Business Without a Commercial KitchenWhether you’re looking to start a brick-and-mortar shop or sell packaged items in grocery stores, here are five alternatives to buying a cooking or baking space.
In 2011, when Julie Busha was looking to take her cabbage-based, relish-meets-salsa condiment Slawsa to market, she explored buying or building out a commercial cooking facility, but ultimately decided to do without.
“When you’re launching an unproven product, especially as unique to the market as Slawsa is, I wanted to first make sure the market response was strong,” she said. “To go into a financing hole building out a space when those dollars were better spent in marketing wasn’t an ideal scenario in my mind.”
Now, five years after she first began producing Slawsa, it is sold in more than 8,000 grocery stores as well as stadiums. To get the product up and running and then expand, Busha has relied on a co-packer, a company contracted to manufacture products on another’s behalf.
Using a co-packer is just one option available to entrepreneurs looking to launch a food business — whether it’s a product, catering company, bakery or other business — without a dedicated kitchen of their own. Here are five to consider.
Contract with a co-packer
A co-packer has its own facility and will manufacture and pack your product for you, so there’s no need to rent kitchen space.
The catch: Most people just starting out can’t make the minimums required by a co-packer, so you may need to choose another option until you build a clientele.
Co-packers free up a lot of time, including hours you would have spent producing and packaging your product, keeping up with certifications, pricing ingredients and managing employees.
Once your business is big enough for a co-packer, Busha recommends spending time to ensure the recipe comes out exactly as you want it. “Sometimes when you scale a production from small batches to larger ones, using different equipment, your existing process may need to be tweaked to fit the larger scale,” she said. “Co-packers are going to follow your recipe, so if it doesn’t come out right, you may need to modify it.”
Rent a commercial kitchen
Many food entrepreneurs, whether they’re testing a product they hope to mass produce or opening a business that doesn’t require a dedicated storefront, such as a catering business, will choose to rent a commercial kitchen. These allow for smaller production sizes that might be too much for a home kitchen and too little for a co-packer.
Commercial kitchens, which are typically rented out by the hour or day or on a short-term basis, are becoming more common in larger cities according to Steve Zagor, dean of the School of Business and Management Studies Program at the Institute of Culinary Education in New York. Such spaces come outfitted with equipment and comply with state and local laws, so all you need to do is secure insurance and permits, depending on where you live.
Just keep in mind that because you’re sharing with other businesses, you might not be able to rent at the last minute or at peak times. Nicole Bandklayder, founder of The Cookie Cups, Minneapolis-based company, has run into time constraints and instances in which she had to share space with another business. “Negotiate pricing and have a clear understanding of the rules,” she recommended.
Rent time in another kitchen
In smaller cities and towns, there may not be a dedicated commercial kitchen available for rent, but there are still options. Zagor suggests inquiring with restaurants, churches, nightclubs, schools and community centers about using their facilities during off hours.
“Any kitchen that sits unused for part of the day, week or month can often be used by someone, whether it’s a baker overnight or a food truck owner in the early morning,” Zagor said.
Opportunities might exist right under your nose. While Rebecca Miller, coowner of Peggy Jean’s Pies in Columbia, Missouri, was building her bakery, a grocery store approached her to start selling her pies. Without a location that was approved for commercial baking by her local health department, she turned to a commercial real estate agent, who put out a call to local facilities. Within an hour, the Elks Club responded.
“We were able to rent at a very reasonable rate, despite not being members of the Elks Club,” said Miller. “For us, it was about thinking outside of the box for the four months until our space opened.”
Join an incubator
Food incubators are trending in major cities. Like commercial kitchens, these offer certified cooking facilities, but they also provide a host of other resources, from marketing consultants to storage areas.
“Commercial incubators are all over the country,” Zagor said. “There’s a cooperative part of this, if you need additional help along the road.” Some offer copacking services aimed at helping budding wholesale entrepreneurs, while others have classes and resources for hiring employees.
According to Zagor, because of the range of services they can provide, incubators typically cost more than renting a commercial kitchen. Some are available by the hour or day, while others require memberships.
Use your home kitchen
It’s harder to navigate from a legal perspective, but commercial home cooking can be done.
In 1980, the late Paul Newman started Newman’s Own in his Westport, Connecticut basement by making a vat of salad dressing he stirred with a canoe paddle. More recently, entrepreneurs Scott Norton and Mark Ramadan tested Sir Kensington’s, their successful line of ketchup, mayonnaise and mustard, by hosting ketchup-tasting parties in their Brown University dorm before taking their product to market.
By cooking at home, chefs and entrepreneurs often save money and have more flexibility. Terry Raimey, co-founder of Black Streak Kitchen, a meal kit service aimed at kids and teens that delivers recipes in the form of comics, uses his Youngstown, Ohio, kitchen to prep ingredients and package kits for nationwide delivery.
“The big pro is low operating costs, and it’s convenient to have our kitchen and home office where we develop and produce our comic recipe cards,” Raimey said.
But, Zagor warns, it’s crucial to make sure you’re complying with local laws. Start with your local health department to see what permits and insurance they require for cottage foods. ServSafe certification, whether it’s required by law or not, is always a good idea.
Until recently, many states banned the sale of any food made at home, according to Zagor. But that is changing. States are responding to the rise of the cottage food industry by making their home cooking rules more lenient.
“We’re in the age of artisanal products, so there’s no shortage of people looking to do inventive things,” Zagor said.