GATEWAY CULINARY INCUBATOR

PHASE 1 FINDINGS

JOHN DESTEFANO, MAYOR

DECEMBER 10, 2012

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 WHY FOOD?
The urban food sector is dynamic and asset-rich, representing a powerful job
engine and driver of economic development

Diverse and > Cities are home to large young adult and immigrant populations, which comprise a large, diverse
growing and expanding market for food products
population > In 2010, 82% of the US population lived in urban areas compared to just 64% in 1950

> Most American cities contain assets that give them competitive advantages in importing, storing,
Strategic processing, wholesaling and delivering food, including central locations, historic public markets,
food assets transportation infrastructure, vacant buildings, and a large workforce

> Increasing awareness among policy makers is driving changes in procurement and reporting,
instigating local food production and influencing waste policies in every market
> Emergence of low cost infrastructure such as shared kitchens along with increasing demand for
Shifting food niche offerings like local products present food entrepreneurs with strong market-entry dynamics
policy and
culture > As the culture of fresh, local foods has become more prominent, institutional procurement officials
are looking to establish regional connections along the food chain
> Increasing diverse and immigrant populations are shifting the demand for raw ingredients and
ethnically influenced products

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 OVERVIEW OF NEW HAVEN FOOD INDUSTRY
The existing food industry in New Haven spans the value chain and represents an
increasingly important component of the local economy

> Although there are a few > There are ~14 food wholesale
processors in New Haven, these businesses located in New Haven,
companies have little representing 270 jobs
integration with local > New Haven Food Terminal is home to
producers several wholesale businesses

End Customer
Agricultural Intermediate Grocery Wholesale /
/ Retail /
Producers Processing Manufacturing Distribution
Restaurant

> New Haven County has > New Haven is home to ~15 food > Several of New
~1,800 harvested acres manufacturing companies, Haven’s current
with a strong shellfish representing 506 jobs, that prominent food
industry as well produce finished dessert items, manufacturers (e.g.,
packaged meats, ready-to-eat Palmieri, Chabaso)
sauces, etc. began as cafes
and/or retail stores,
and moved into
product manufacturing
Source: Ninigret Partners, 2007 US Census Data, Dun and Bradstreet data

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 STRENGTHS OF THE NEW HAVEN FOOD SECTOR
A survey of the New Haven food industry reveals a range of strengths
1. Growing cohort of food entrepreneurs
as well as established manufacturing
and restaurant sectors in New Haven
2. Broad network of organizations in other
parts of the food chain (e.g., distributors)
that could serve as critical partners /
support the food entrepreneurs
Commentary
> Primary research indicates that there is a growing number of home
chefs, food trucks, and small ethnic businesses that have inquired
about commercial kitchens available for rent. For example, we were
able to identify over 30 food trucks located in downtown New
Haven and/or Long Wharf
> Additionally, there are several facilities in New Haven (e.g., Ultimate
Foods) that have proven quite successful at providing
complementary services (e.g., co-packing) to growing small food
businesses that produce sauces, salsas, and other canned products
> There are a wide range of organizations (both public and private)
that we perceive have a vested interest in the success of emerging
food businesses
> For example, the greater New Haven area is home to several large
wholesale and food service distributors (e.g., Bozzuto’s, Thurstons,
Burris), which may be interested in cultivating a pipeline of local
suppliers
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 GAPS IN THE NEW HAVEN FOOD SECTOR
Additionally, there are a series of gaps in the New Haven market that have impeded
the launch and growth of food businesses
Commentary

1. Currently there is little > While some food entrepreneurs have rented restaurants or other
infrastructure in the greater New Haven certified food service kitchens for their production / processing
area to support early stage food businesses needs, there are currently no shared commercial kitchen located in
who have needs beyond co-packing Connecticut that are dedicated solely to small food businesses

> The nearest shared kitchen facilities are located in New York City,
Lexington, NY, or Providence, RI

> The success of complementary food processing facilities in the New

Haven area (e.g., Ultimate Foods) speaks to the broader demand for
food processing / manufacturing

2. Expansion options for existing food > While there are other strategic food assets in the market, it is our
manufacturers and processors are limited understanding that space for food manufacturing is at a premium due
due to infrastructure and regulatory to restrictions on existing locations (e.g., Mill River)
constraints

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THE OPPORTUNITY FOR NEW HAVEN
The existing commercial kitchen, classrooms, and offices at the Gateway Long
Wharf Campus represent an opportunity to address some of the gaps in the New
Haven market for food entrepreneurs

Unmet Needs of New

Haven Food
Entrepreneurs

Gateway Culinary
Incubator

Existing
Food Assets in the Infrastructure at
New Haven Area Gateway Long
Wharf Campus

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 WHAT IS A CULINARY INCUBATOR?
There are a wide range of culinary incubator models in the market; however, most
incubators are designed to provided food entrepreneurs with the tools and support
required to successfully launch their business
Core Components

> Key services include subsidized rent for a shared kitchen that includes access to
Services
equipment, hot and cold storage space, staff members’ expertise, and office space
Provided to
Businesses > Incubators are increasingly providing technical assistance (e.g., business training,
mentoring, etc.) to tenants to increase their likelihood of success following “graduation”

> Typically a fee-based model that charges tenants on an hourly and/or monthly basis
for use of the kitchen, equipment, and other shared spaces
Economic Model
for Operators > Many incubators are run as non-profits by universities, quasi-public organizations, etc.
> Accelerators, which are run by experienced business owners and/or investors, may
take an equity stake in tenants

> Incubator graduates have the potential to create jobs in the local community,
Benefits to the serving as a driver of economic growth
Community > Creates an opportunity to connect to and strengthen other food assets in the
market (e.g., local agriculture, distributers, etc.)

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CHARACTERISTICS OF SUCCESSFUL INCUBATORS
Leveraging our experience in the incubator space and secondary research, we have
identified several common themes among successful incubators

1. Gain support early from local public and private stakeholders, as well as regulators

2. Leverage local food assets and connect to local agriculture as potential sources for raw
ingredients / produce

3. Identify value-added services and alternative revenue streams (e.g., technical assistance,
business education, product development, etc.)

4. Thoughtfully develop a detailed operational and financial plan – both for the incubator’s
launch and for ongoing operations

5. Tightly manage overhead costs (e.g., rent, utilities, incubator staff / management, etc.), while
focusing on quality investments

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PROFILED INCUBATOR: LA COCINA
San Francisco-based culinary incubator La Cocina works primarily with women
food entrepreneurs from low income communities

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PROFILED INCUBATOR: CARBONDALE CENTER
The business below - Babunya’s – is a start-up that successfully launched out of the
Carbondale, PA Kitchen Incubator

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 GATEWAY TECHNICAL BUILDING AT LONG WHARF
Gateway College’s move to downtown presents a unique opportunity to reuse the
former site on Long Wharf for education and technical training

Context

> Gateway Community College and the

Board of Education, along with Economic
Development partners, are working on a
reuse plan to include:

– Hyde Foundation School: Focus

on health sciences and sports
medicine

– Gateway Automotive: Relocate

from North Haven and build state-of-
the-art training center at Long Wharf

– Gateway Technical Institute:

STEM focused learning environment
focused on New Haven’s growing
economic sectors

– Culinary Incubator: Support food

entrepreneurs in the New Haven area

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GATEWAY CULINARY INCUBATOR CONTEXT

• Support small business growth and entrepreneurs, particularly in

the food sector, and to generate job creation in New Haven and,
more broadly, Connecticut
Vision / Rationale
• Create opportunities for Gateway students and the broader
community to gain hands-on experience working in a commercial
kitchen and the necessary training to launch their own business

• Home to a commercial kitchen, which already has much of the

infrastructure and equipment required to launch an incubator

• Located along major transportation corridors (e.g., I-95) with

Strategic Assets
access to many distribution channels

• Buy-in from key government stakeholders who have also

convened key stakeholders across the food chain

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GATEWAY PHASE 1 FINDINGS
Phase I of the Gateway Food Incubator Project assessed the feasibility of
establishing a culinary incubator in the Gateway Long Wharf commercial kitchen

Summary of Key Findings from Phase 1

1. Demand for Incubator: Research and conversations with experts highlighted demand for a
shared commercial kitchen from a range of individuals and companies (e.g., home chefs, caterers,
food trucks, larger operating companies)

2. Valuable Preexisting Assets: The facility’s underlying assets (e.g., existing commercial kitchen,
equipment) will enable the project to manage many of the economic risks typically associated
with culinary incubators

3. Opportunities for Expansion: Additionally, the incubator may have the opportunity to expand
into adjacent rooms (e.g., cafeteria kitchen, classrooms) as the incubator grows

4. No Insurmountable Roadblocks: While identified several risks / key questions for additional
vetting, we believe that the Gateway culinary incubator has met the burden of proof from
economic, regulatory, and demand dimensions to be given the green light to proceed

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 ASSESSMENT OF EXISTING FACILITY
When evaluating Gateway’s space, we considered both what can be done with
relatively little investment to the current kitchen as well as how the concept could
expand after the model is proven

Gateway Commercial Kitchen Cafeteria Kitchen Adjacent Rooms

> Suitable for basic cooking education, food > Quick cooking and > Office and / or class
preparation, dining / meals production, and prep space space for tenants
Capabilities baking with some basic office and storage and additional dry
space storage

> 3 stoves, 2 deck ovens, 2 standalone > Small walk-in freezer, > TBD
refrigerators, 1standalone freezer, 2 Hobart grill, deep fryer, and
Equipment mixers, 1 proofer, and 1 grill deck oven
> Shared dishwasher and ice machine with
cafeteria

> Limited number of hot stations > Transportation of > Coding requirements
Possible > Minimal dry and cold storage goods / prep to if used for storage
> Poor heat / humidity control commercial kitchen and / or prep
Challenges
> Loading and transport of goods to kitchen

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 TENANT PROFILE
We have identified a preliminary profile of Gateway’s “target” tenant based on our
understanding of market demand and limiting factors resulting from the facility’s
existing infrastructure

> Based on Gateway’s existing infrastructure, there are

some limitations on the types of businesses that could be
supported in the incubator (without significant fit-out) Profile of Possible Tenants

Limiting > As there are several successful co-packing facilities

Factors located in New Haven area, the incubator should not > Catering companies
focus on high-volume production of sauces and salsa > Low-volume bakeries
(e.g., cookies, pies,
> It is important to identify “anchor” tenants that can be cupcakes)
relied upon to use the facility consistently
> Food trucks who need
prep space
> Larger companies in need
> The facility should focus on attracting entrepreneurs of test kitchens for
from both New Haven proper and its surrounding product development
Geographic
Breadth counties, including Fairfield and Hartford, which jointly
have a population of over 2.6 million

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SERVICE OFFERING
The incubator’s service offering would be based on a core membership model that
includes training and a baseline number of kitchen hours with additional a la carte
kitchen hours and technical assistance available to members and non-members
Service Offering Core Components

> Receive 15-20 hours of kitchen use a month, but not inclusive of storage
> With membership, tenants receive select business and kitchen training; additional
Membership
training / technical assistance purchased separately
> If adjacent classroom(s) are utilized, could offer businesses shared work / office space

> Members and non-members can purchase additional hours to use hot and prep space
Hours a la > Accurately assessing how many hours members and other users will require will be a
carte critical part of tenant intake
> Consider allocating a select percentage of prep space hours for food trucks

> Dry: Sell shelf space, lockable cages (small and large) and pallets
Storage > Cold: Offer shelf space and lockable cages within the standalone refrigerators and
freezer for members and non-members

Technical assistance (e.g., business education, kitchen training) for members and non-members

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TECHNICAL ASSISTANCE OFFERING
Discussions with stakeholders have highlighted the importance of incorporating
technical assistance – e.g., business education and kitchen training – as part of the
culinary incubator’s service offering
Examples of Potential Education / Training

• Business plan development

• Finance and accounting basics (e.g., QuickBooks)
Business Training • Marketing and branding expertise
• Assistance navigating licensing / food regulations
• Technology training

• Food safety training (e.g., ServSafe)

• Equipment use and training
Kitchen Training • Product testing
• Nutritional analysis
• Storage training for raw / finished products

• Peer mentoring and networking

Business • Connections to financing assistance / capital resources
Development • Internship opportunities
• Industry workshops

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QUESTIONS AND COMMENTS: WAYS TO GET ENGAGED

> Sector round table meetings (sign-ups available)

> Comment cards

> Personal tours of Gateway available (ask EDC staff)

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