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News & Observer - Piedmont startups find kitchen aid

June 8, 2014
In The News

By Tammy Grubb

HILLSBOROUGH — In the chaos of the kitchen is where food entrepreneurs strike it hot, or get burned trying.

Three of every four culinary startups fail within a year, experts say, but at the Piedmont Food and Agricultural Processing Facility, entrepreneurs say they’ve found help staying out of the fire.

In fact, four companies using the center have grown so large, they are now looking for commercial space to lease. That’s a problem in Orange County, where economic development officials say the available space is either too small or too expensive.

Most small producers also don’t have $60,000 to $80,000 to equip a professional kitchen, said Matthew Roybal, the center’s executive director.

Roybal declined to name many clients, citing privacy concerns. One looking to move is LunaPops owner Jon Mills, whose Wilmington company was one of the first clients at the center when it opened. In three years, they’ve outgrown the space and could move by next year, he said.

Orange County’s economic development director Steve Brantley said several other clients have developed overseas business, including Vintage Bee, which exports its gourmet honey to China.

The center “is gaining a statewide reputation as a model for food and ag processing,” Brantley said.

The independently operated nonprofit, which opened in 2011 on Valley Forge Road in Hillsborough, has 34 clients and 30 more in the planning, orientation and training stages. The center could easily fill double the existing freezer and storage space it now has, Brantley said.

Getting started

Durham resident Modupe Hassan, 62, has been in business for a while, but she’s still getting started.

The Nigerian-born cook moved to America 42 years ago for college. When she was laid off six years ago from GlaxoSmithKline, Hassan tested her Ownjeh Rice Sauce on friends and started producing it with the help of a co-packing company. Co-packers help small-scale producers package their products for a fee.

Hassan found out about the Piedmont center just as she was about to lose her co-packer. The center gave her an affordable place to continue making her product, but it also gave her a boost of confidence and a place to go for ideas and advice, she said.

Until now, her focus has been making samples of her sauce and getting certified by state regulators so she can sell it at A Southern Season and on the company’s website. Her first full-scale production is this month, she said.

“Individually, none of us can build a business like that,” she said. The center provides “that for you at a reasonable price.”

Multi-county partnership

The center is a partnership among Orange, Durham, Chatham and Alamance counties. It grew with $1.5 million in seed money, plus numerous state and federal grants. The kitchens rent for $25 an hour, with free time before and after a scheduled appointment for cleaning and sanitizing.

Roybal was hired shortly after the center opened and recently hired facility manager Rob Gardner to help oversee its operation. Both are passionate about what they do, and the spirited debates they have about the center’s direction has sparked new ideas, the men said.

They expect the books to be in the black by year-end, just in time for Roybal’s first official report to the Orange County Board of Commissioners.

The plan has always been to build a self-sustaining center that could provide entrepreneurs and local farmers with new markets and grow the region’s agricultural economy. The center regularly hosts school tours and other groups.

The center also is seeking grants to avoid raising client fees and to save for future needs, Roybal said. In a perfect world, they would add a regional food truck and catering services center in Durham, Chatham and Guilford counties, and a meat-processing facility, he said.

Chapel Hill chef Beau Bennett has run his company, Beau Catering, out of the space for two years using produce from Hillsborough farmers. The chef and his team were working hard last week as ’80s hair metal blared from a kitchen radio.

“This place has been a dream for us,” Bennett said.

Learning curve

Roybal and Gardner sometimes offer advice, but clients are responsible for their own business decisions. Every client that finishes orientation doesn’t start a business right away, but for those who do, the learning curve has been cut by six months, they said.

Carrboro resident Beth May enjoys sharing the kitchen with other people and learning from experienced entrepreneurs. While the center is short on storage space, it has been good for her business, and the staff helped her get ready for the U.S. Department of Agriculture inspectors, she said.

May started making tempeh while in graduate school studying bio and agricultural engineering, and before starting her own business, she made her tempeh for the Chapel Hill restaurant The Pig. She now sells it to the Fiction Kitchen in Raleigh, Little Dipper in Durham and Weaver Street Market in Hillsborough, Carrboro and Southern Village.

The mother of two sons – ages 8 and 10 – spends five hours at the center making each batch. She starts by cooking 200 pounds of beans from an organic grower in Rocky Mount and treats them with a fungal culture. The beans then go through a double fermentation process in a heated cabinet for nearly three days. The tempeh develops a milder flavor and dense, tight texture that’s immediately frozen to preserve the freshness, May said.

Roybal and Gardner said they encourage new clients to draft a business plan and learn from their strengths and weaknesses. The men watch new clients work and help them correct problems during at least the first three visits. Roybal said that’s not the case at every food incubator, and other operations have been shut down because of a client’s mistake.

“They’re entrepreneurs, risk-takers, and have to have that sense of confidence,” Gardner said. But “it’s an enormous risk.”

Training and record-keeping are very important, especially when the Food and Drug Administration, the state Department of Agriculture or the county’s environmental health division regularly drop in for inspections, they said. Government rules vary among the agencies and can be complicated for smaller companies, because they were written for large-scale food producers.

Roybal, an Army reservist who has worked for Whole Foods and other private companies, said it’s been interesting to work with county governments. As members of the center’s board of directors, local leaders bring a variety of skills, but few have food service experience, he said.

Orange County’s staff has been the most supportive, helping identify economic development opportunities and secure more storage space, he said. The commissioners recently approved spending $3 million to renovate the Cedar Grove Community Center, including the addition of a loading dock and extensive dry storage space for the center’s clients.

Mills said LunaPops, which now has 12 employees, could sell 1.2 million to 1.4 million frozen treats this year. The company recently contracted with Harris Teeter to market its juice pops made 28 at a time by hand, he said. They recently shipped 15,000 pops to a new buyer in the Middle Eastern country of Qatar, he said.

LunaPops outgrew the center’s freezer long ago, forcing Mills to rent storage space in Morrisville. From there, the pops are shipped to a New Jersey warehouse rented at a third the cost of Triangle warehouse space, and on to clients and stores, he said.

Still, the center saves them roughly half a million dollars each year in capital and technology costs, Mills said. It also allows him to maintain strict quality standards that larger producers can’t meet, he said.

“We do believe in small batches. We do believe in making it ourselves,” Mills said. “That’s part of knowing what you produce and what you make.”

But the greatest thing about the center is the collaboration and caring, he said. When the freezer died last year – with LunaPops’ biggest order ever inside – there were multiple hands ready to help, including a tenant who brought a forklift and a licensed driver to move 20 pallets of frozen pops to a Sysco refrigerator truck.

Sysco, a restaurant supply company, left the truck running in the parking lot for a week to keep the pops cold, he said.

“The food business is tough,” Mills said. “I like to think that I’ve helped a lot of people in the food business, but a lot of people have helped me.”