Recently we celebrated Streat Helsinki, a great festival on a mission, Streat Helsinki “develops diversity in food culture”. It sees street food and its makers as a part of the city food chain and as a part of a lively, inspiring city. In addition to events and yummy street food, it concentrates on street food development in Finland. It also has many interesting workshops and adjacent events. In one of those we had a chance to listen and talk to one of the world’s street food pioneers, Geetika Agrawal of San Franciso’s La Cocina.
La Cocina is the non-profit behind the arch-famous San Francisco Street Food Festival.
The mission of La Cocina is to cultivate low-income female food entrepreneurs as they formalise and grow their businesses. This is done by providing affordable commercial kitchen space, industry-specific technical assistance and access to market opportunities. La Cocina’s vision is that entrepreneurs gain financial security by doing what they love to do: “creating an innovative, vibrant and inclusive economic landscape”.
The food industry has a high cost of entry: the fees for licensed and insured commercial kitchens, the start-up costs to open a restaurant, the standards set to compete for shelf space at specialty stores and large retailers… food entrepreneurs face an uphill battle for success (take it from me, been there!). And it’s an uber-crowded market. La Cocina provides a platform for these motivated people to hone their skills and successfully transition into the highly regulated and competitive food industry.
For this, it follows the model of a business incubator, providing community resources and an array of industry-specific services (e.g. affordable commercial kitchen-space, technical and legal assistance, business expertise) to these low-income women entrepreneurs in order to launch, grow and formalise a food business.
Incubating great food entrepreneurs. Simply delicious
At La Cocina, each qualified kitchen user is a separate business entity. This means that each business must have its own license, insurance, staff, business records or tax returns and each business owner will also be responsible for complying with the city, state and federal regulations concerning licensing, food safety and sanitation, taxes, employment. And so forth.
The cycle of the incubator model looks something like this:
1. Application and Enrolment; 2. Qualified Applicants selected; 3. They join the Pre-Incubation: A 6-month period where program participants receive technical assistance to establish the foundations of their business in the areas of Product, Marketing, Finances, and Operations; 4. Incubation: Program participants whose first 6 months have been successful continue to receive technical assistance in all of those areas and have access to affordable commercial kitchen space to grow their sales; 5. Graduation and Alumni: Program participants reach all established incubation benchmarks and expand their business out of La Cocina’s kitchen while remaining part of the alumni community.
Creating market access… by the numbers!
What La Cocina is in effect doing for these women entrepreneurs is lower entry barriers (costs), bring market opportunities and help create high-value sales. In parallel, they provide expert food business consulting at affordable prices, training and access to capital. Let’s have a look at the numbers to understand the value it delivers. The average cost to start a restaurant business in the San Francisco Bay Area is $750K; there is a three year wait to get a stall at a farmer’s market; 70% of food business owners are men; it costs $35 an hour to rent commercial kitchen space vs $13 at La Cocina’s kitchen; 5-8 permits are needed to operate a food business in San Francisco and, oh… 100% of contracts are in English (don’t forget La Cocina works mainly with immigrant women entrepreneurs, many of which lack English language skills).
So, in comes La Cocina’s support. They bring down start up costs by offering massive savings in kitchen space rentals ($22 per hour in savings); they bring capital via partnerships with community development institutions and find investors (almost $1M annual in investor capital); they connect business to sales opportunities (stores, farmer’s markets or popups, more than 270 market access opportunities last year alone!) and, of course, they train: over 140 volunteers train entrepreneurs and assist them in design, cooking, accounting, legal issues, business development, and many other areas.
Clearly, it works. In 2014 La Cocina’s 41 businesses generated a revenue of $3.6M and 155 jobs. They operate in over 100 stores all over the US, including WholeFoods Market and the SFO airport and are present in 12 farmers markets in the San Francisco Bay Area. Impressive!
Street food development came as a natural extension of the work conducted at La Cocina, with an innovative goal of bringing together diverse people “Anyone, Anywhere”, building “Connection & Community” and fostering “Diversity & Creativity”. The result, a food festival that assists the development of a vibrant economy and the making of “Great Cities”. In their own words, “street food has the power to tell stories, create opportunities for all, connect diverse people and shape our cities”.
The movement is growing and is a fascinating example of ingenuity, solidarity and business savvy put to good (and tasty) endeavours. Stay tuned with them on Facebook and Twitter and also watch out for Finland’s street food development following Streat Helsinki on Facebook. Bon appétit!