Kitchen incubators, de-risking and a little indignation

July 10, 2017 by
de-risking

People often ask, ‘what kinds of things do your customers sell?’ I’ve always told them that it’s a mix: about a third make products for wholesale to cafes and independent grocers, another third sell products online through their own websites (or Food By Us now), and the last third sell through a market stall or food truck.

But actually, the reality is a lot more fluid than that. Diversification and experimentation with products and services is one of the characteristics of the kind of food business that begins in an incubator kitchen.

These food makers transform their businesses at a pace not easy for most bricks and mortar. They use our resources flexibly, pivoting their focus if a particular product doesn’t sell well, or to shift from one farmers market to another or from markets to catering events or from catering to pop ups, in an attempt to find their groove and best business model mix. They’ll jump at opportunities that lay outside their original plans, because they can. They don’t have that much holding them back – no shopfronts costing them money every week, little in the way of expensive equipment going under-utilised, no hundreds of thousands of dollars worth of commercial kitchens to pay off.

So it’s always a little troubling for me, I have to admit, when I get kick back from customers about the cost of the kitchens ($14 – $22/h) or if I try to set minimum hourly requirements (like 8 hours a month at the moment). Take this email for instance, received last week (and edited to maintain anonymity):

“It’s been 2 weeks since we were in your kitchen when we made 60 boxes, and over these 2 weeks we’ve sold 8 through the markets and 3 online. With 49 boxes still to sell, we don’t need to come back in for a few weeks… How are we supposed to move the business forward when you’re our largest expense?”

Emails like this tickle the scratchy spot of indignation I keep just between my shoulder blades for occasions like this. I don’t know how to word it exactly… perhaps it’s the lack of recognition at the opportunity that’s been given to them? That I’ve spent hundreds of thousands of dollars on creating a facility that’s even made it POSSIBLE for them to lose a couple of hundred at the start of what is hopefully a very long business road.

Or maybe it’s just because I’ve got the hindsight that comes with someone who has lost a lot of money in starting up. I can now see what a little ‘losing’ does for the soul. Lose some money, so you know what it’s like to free fall, to have to make decisions on the fly and with a strong hold on reality and resolve and resilience. Lose some money, so you can be grateful that you haven’t lost even more. Lose some money so you HAVE TO GODDAM PIVOT or market, or rethink your tastebuds, or diversify, like the rest of us. And then MAKE IT BACK. But don’t blame me for the fact your projections aren’t meeting reality. Just join the club. Share your woes. But take responsibility for them. Lean into it like the rest of us and keep going.

There. Scratch has been itched.

 

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