Progress 09/01/17 to 08/31/18
Outputs
Target Audience:Our target audience this reporting period was primarily community based entrpreneurs who were in initial stages of beginning a small food based business and were seeking a low cost commercial kitchen where they could lease time on an hourly basis to produce their food product. The commercial incubator kitchen that we operate, Kitchen on the Bluff, is the home base for 31 food licensed businesses. On the average, 15 entrepreneurs use the kitchen each month, paying for the time they use at an horly rate raning from $10-25 per hour depending on the number of hours they use. A secondary target audience during this period were immigrant farmers, with a group of 8-12 Hmong immigrant farmers participating in a value added training program sponsored by a partner in the project, the Hmong American Farmers Association. In addition, staff at the kitchen produced two feasibility studies to evaluate the potential of creating a farmer owned vegetable processing business process locally ground vegetables for sale through retail stores in canned production form or to distribute fresh cut processed raw vegetables to commercial and institutional kitchen and restaurants in buk form. Of the 42 individuals participating, 33 were Asian, African or Latino immigrants, or African American residents. Changes/Problems:The most significant challenge we faced early in the project was the disillusion of our primary partner in the project - the non-profit organization Urban Oasis. LEDC has contracted with Urban Oasis to manage the incubator kitchen. In addition, Urban Oasis was an anchor tenant in the kitchen where it operated a food production business primary focused on local catering. The organization was not able to maintain its funding based and closed suddenly in the Fall of 2016. This partner was also providing a primary match for dollars available to the project through the CFP grant. The closure of our partner in this project created a serious crisis and set back out operations significantly. LEDC made efforts to recruit a new partner in the Hmong American Farmers' Association. LEDC collaborated with HAFA in their program to educate Hmong farmers in the potential for vegetable processing. HAFA leased time in the kitchen, operated a training program for young Hmong sou chefs and referred several of their farm clients to use the kitchen in processing of their crops. But HAFA continue this relationship for only one year, and then withdrew their participation. LEDC contracted with a former employee of Urban Oasis to manage the incubator kitchen operations, recruiting new clients to use the kitchen and stabilizing the financial operations of the kitchen which were under stres as a result of the failure of Urban Oasis. In late 2018, LEDC began discussion with the Director of the Good Acre, to establish a collaborative project to proceed with a vegetable processing trail. Our goal is to engage in a tst processing season to clarify the cost of production for a variety of processed products. In addition, we expect to test various markets with limited prouct. Evaluating the results of the production and market tests will inform a decision of whether to proceed with the formation of an ongoing business to process locally grown vegetables primarily produced by immigrant farmers. This was one of the primary purposes of launching this commercial kitchen and for securing the CFP grant. We expect to request an extensin on the grant period through March of 2020. Vegetable harvest by local farmers will not begin until July of 2019. To complete a full test of processing and marketing selected products, we will need to process during the most important months of harvest which extend into early October, past the current end date of this grant. What opportunities for training and professional development has the project provided?Kitchen on the Bluff provided kitchen space to the Hmong American Farmers' Association to conduct a training programg for young asian desiring to secure employment as sou chefs. An experiened Asian chef directed the training which was fund by a grant from the Minnesota Department of Employment and Economic Development. LEDC staff and the kitchen manager provided technical assistance on a one-to-one basis to six of the entrepreneurs leasing time in the kitchen. How have the results been disseminated to communities of interest?Results of the feasibility studies for value added production, have not yet been communicated to the broader community. What do you plan to do during the next reporting period to accomplish the goals?The Kitchen on the Bluff has been expanding its client base in offering the opportunity for low income community residents to launc food based businesses. We expect to expand our technical assistance programming to these individuals to help them expand their operations. LEDC has entered into a formal partnership with The Good Acre, another incubator kitchen and local produce distributor, to launch a fresh cut and value added production test and market test of a variety of products to further evaluate the viability of forming a farmer owed vegetable processing business to benefit Lation and Hmong vegetable farmers in our service area. The feasibility studies that we conducted revealed the significant challenges that would be encountereded in the goal of establishing a value added vegetable production business. We revised our plans to begin full scale production in the third year of the grant program and will engage in several production tests and limited market tests to further evaluate the economic viability of a farmer owned vegetable processing business.
Impacts
What was accomplished under these goals?
During the grant period of this report, 15 community based leased kitchen time at the Kitchen on the Bluff incubator kitchen, producing a product that each business sold to a variety of cusmers depending on their business type. Examples include Sweet Scienc, a manufacturer of high end certified organic ice creams that were sold wholesale and through a retail site that the business opened in 2018. Amazing Dining Services, an Ethiopian owned business provided daily meal service to a charter school with 180 students serving primarily African children. Asian Flame provided meal service to a senior care center. Union Kitchen is a catering business that provided servic to special events and luncheons. A total of 31 entrepreneurs secured licenses through the kitchen. The licensing process can be complicated depending on the customer base, and technical assistance was provided to most of these business ownrs by the kitchen manager. Two feasibility studies were prepared to evaluate whether it was practical for farmers to lsunch a vegetable processing business. Co-op retail markets were surveyed through interviews with grocery buyers, and 8 small businesses engaged in small scal vegetable processing operations in other parts of the country were interviewed to secure information based o their experience in launching a processing business. The conclusion of the study to pepare product to sell through retail stores led the project to be very cautious in taking a step towards business launch without a test production run and markt test. A second feasibility study was conducted to evaluate the potential for a fresh cut vegetable operation to supply institutional and commercial kitchens and restaurants with partially process fresh vegetables. We haveidentified a partner produce distributor who has agreed to collaborate with our project in testing thi concept in the next year.
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Progress 09/01/16 to 08/31/17
Outputs
Target Audience:Our target audience during this reporting period are small businesses in a start-up phase that are launching food manufacturing or catering businesses. The clients using the kitchen are a broad ethnic mix that include Asian, African, Latino and Anglo members of the community. We currently have 12 small business clients actively engaged in use of the kitchen to produce their product. A second target audience is immigrant farmers who have a desire to process vegetables to expand their market or to extend their sales season. Changes/Problems:The major focus of our project has been the support of small business clients from the neighborhood who are initiating their food business operations or expanding from their initial phase of development, often in their home. We had initially contemplated supoort for the development of a processing business servinglocal immigrant farmers that are seeking additional markets and income. Our research of pootential markets and the feasibility study we conducted raise serious questions as to whether such a small scale operation processing vegetables for local farmers could be financially viable. This conclusion was based on information we secured from other small scale producers in other cities. While there was interest expressed by retail grocers in locally processed vegetable products, when we calculated the cost of production, we concluded that to provide income that equalled the price received by farmers for fresh produce, the sale price on the retail shelf would need to approach $8.00 per unit for 12-16 ounces of product. Our conclusion was that this price range would be too high to generate sufficient sales volume to support a processing business. We have directed our attention to processing of vegetable products that are produced in bulk for restaurant and institutioional kitchen use, and are provided in a fresh or refrigerated form. We will test a range of products, that focus on condiments, to determine if this processing approach would be financially feasible. The principle crisis we experienced was the dissolution of the partner organiztion, Urban Oasis, that we had depeneded on to manage the kitchen facility and to provide an anchor tenant to provide steady income for the facility. We have been unable to identify another partner organization yet. The manager that LEDC contracted to manage the kitchen, has stabilized operations after a year of management and has succeeded in recruiting a total of 12-15 small business clients who lease time in the kitchen. This group of tenants is providing enough income to the kitchen to pay for the operating costs of $5-6,000 per month. The kitchen lost money throughout the past year of oeprations. We are beginning to see sufficient income generated by leased kitchen time to conclude that the project can be self-sustaining in the long term. What opportunities for training and professional development has the project provided?A partnership with the Hmong American Farmers' Association provided kitchen facilities for a training programfor members of the community that are seeking careers to work asSous chefs. The Kitchen on the Bluff also hosted a series of food business orientation sessions for individuals with interest in opening food business. As mentioned above, individual business owners were provided consulting guidance in secruing license to operate food businesses from the Minnesota Department of Agriculture. How have the results been disseminated to communities of interest?The feasibility study for small scale vegetable processing is being written up to provide detailed conclusions for a decision to proceed slowly and carefully with the launch of a farmer owned processing business. When completed, this study will be made available to other organizations considering similar projects. We found it very difficult to get detailed information from similar business operations (even though they were in other areas of the country and could not be considerd competitors) either because the owners did not want to reveal financial data, they did not have carefully collected data and only could supply anecdotal information, or they wanted to be paid consulting fees for providing such infomration. We will readily provide information that we have prepared with financial support provided through this gratn. What do you plan to do during the next reporting period to accomplish the goals?We will test a variety of specialty products that are common in the Latino community since most of our farm clients are Latino farmers. Our propose dproduct is a list of condiments used by nearly every Mexican restaurant. Our plan is to produce these condiments in bulk quantities, eliminating the high cost of packaging and the multiple mark-ups for wholesale distributors and retail stores which raise the shelf price of retail products to levels that we do not believe are marketable in significant volumes if a fair production price is paid to farm producers, who are the ultimate propose beneficiary of our project.
Impacts
What was accomplished under these goals?
A feasibility study was conducted to evaluate the probability of success of a farmer owned vegetable processing business. This study involved interviewing a selected target market of buyers for cooperative gorcery stores operated in the Twin Cities area with total sales of over $170 million annually. These stores focus on a customer base that seeks locally grown products and has a preference for supporting other cooperatively owned businesses. The buyers suggested a preliminary test series of products that was tomato based. Recipes were tested by a chef contracted to develop a sereies of products. Basic material costs were calculated. In addition, a contract employee surveyed other small scale tomato processors to learn from their experience. The production costs were high, requiring high shelf prices for retail products, seriously limiting the price that could be paid to farmers for raw products. The conclusion of the feasibility study was that we should be very cautious about investing capital in the start-up of a small scale vegetable processing company that produced a product for sale at a retail level. The same staff contractor evaluated the feasibility of fresh cut processing of raw vegetables for sale in bulk quatities to restauarants and institutional kitchens. This study was conducted for a group of Hmong farmers. While this evaluation produced a more feasible result, the price that could be paid per pound for raw vegetables was typically less than $1.00 per pound, but not significantly less. The farmers concluded that they would rather sell fresh produce througha farmers market system that paid a higher price becasue ti was a direct sale and involved no cost of processing. The incubator kitchen did meet the goal of providing leased kitchen time to small business owners who needed access to kitchen processing facilities. The majority of the users of the kitchen also were assisted in securing operating licenses to process food from the Minnesota Department of Agriculture with the kitchen manager providing consulting srvices to clients in this regard. The kitchen is currnetly leasing kitchen time to 8-12 small business operators with use of the kitchen depending on the season.
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Progress 09/01/15 to 08/31/16
Outputs
Target Audience:Kitchen on the Bluff, an incubator kitchen established by Latino Economic Development Center, opened for operations in November of 2015. Kitchen production time is being leased toseven small business entities which include African Delight, a manufacturer of hot sauce and ginger beer; Mama C's Salsa; Sweet Science, an ice cream manucturer; Victoria's Cookies; Oijkra Catering; Kerry's Donuts; and Urban Oasis, a caterer and craft condiment manfacturer. In addition, the Hmong American Farmers Association has been using the kitchen to train a dozen Hmong farmers in value added production processes. Two of the business owners are African, one is Hispanic and all of the farmers are Asian immigrants. Urban Oasis provided 4cooking training classes to community residents for a total ofn 28 people. LEDC provided a canning class for a group of 8 Latino farmers and other individuals. The Hmong American Farmers Association provided a canning class at Kitchen on the Bluff (as a client/tenant of the project) for over 25 members of the CSA that is served by their farmer membership. Changes/Problems:A major challenge has been the closing of our primary non-profit partner in theproject that was a sub-awardee and managed the day to day kitchen operations. Though initially this organization was well funded, it was unable to secure ongoing funding to sustain its operations. LEDC has identified a new partner organization: the Hmong American Farmers Association, that shares the goals of LEDC in working with immigrant Hmong farmers and has received funding to create a similar farmer owned processing facility. LEDC has worked closely with this organization in the past and believes they are a good fit as a partner to collaborate with us in fulfilling the objectives of this grant. What opportunities for training and professional development has the project provided?The project has provided small business training to five small business entrepreneurs preparing to launch a business. It has provided kitchen lease time to seven small businesses to produce their processed food product. These include an ice cream manufacturer, an Africna hot suace producer, a donut maker, a cookie baker, and three catering businesses. How have the results been disseminated to communities of interest?The availability of the small business training and the opportunity to lease kitchen time were broadcast by a neighborhood radio station and advertised on a Latino station, as well as the placement of notices in several local neighborhood based publications. Four community based economic development organizations with a strong base of clients were also contacted. What do you plan to do during the next reporting period to accomplish the goals?The program is actively recruiting additional kitchen tenants to use the kitchen for their food manufacturing businesses with an anticipation of reaching a full kitchen with 10-12 tenants leasing time in the kitchen. LEDC has been developing the framework for a farmer owned vegetable processing business that will be launched this year. A feasibility study has been completed and a business plan is in the process of being developed to guide this processing cooperative. The targeted markets are local food cooperative grocery stores with three tomato based products: ketchup, marinara sauce and diced tomatoes. Tomatoes are a product with a high percentage of seconds that do not have a ready market and are frequently composted by our immigrant farmer client base. Creation of this product will provide additional income to these farmers and will provide a locally produced product for local consumers. A second market is an institutional market for lightly processed fresh vegetables and instituional sizes of the processed tomato products.
Impacts
What was accomplished under these goals?
The project developed a curriculum to train small food business entrepreneurs. This curriculum consists ofeight 2 hour classes that cover the basics of running a business including regulations, accounting, marketing and finance; and specialized courses in food manufacturing areas including food business licensing, food safety certification, HACCP plan development, food marketing options. Five entrepreneurs enrolled in the first class that was offered and completed the courses. Kitchen on the Bluff opened for business as a commercial incubator kitchen in the Fall of 2015. It is currently leasing kitchen time and the use of the facilities to seven small business entrepreneurs. A feasibility study to establish a farmer owned food processing business has nearly been completed. Market research was conducted to identify the vigorous co-op gorcery market as a target market for processed vegetables grown by local immigrant farmers. This potential market of 12 stores has total sales of $160 million annually. Product research was conducted through interviews of grocery buyers at six of the co-op stores with the preferred product to be launched being one of three tomato based products: ketchup, marinara sauce and diced canned tomatoes. The objective of the processing business is to create a market for "seconds" that are produced in volume by local immigrant farmers. Approximately 1/3 of the tomatoes raised by these farmers are reportedly composted becasue of the lack of buyers. The project is preparing to form a business to launch an initialproduction run at the height of the harvest season in 2017.
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