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Greater San Francisco Bay Area Food
The number of food entrepreneurs in the Bay Area is growing dramatically.
Local food events such as the Underground Market, Eat Real Festival, and
La Cocina’s Street Food Festival are drawing larger crowds every year.
There are hundreds of food entrepreneurs in the greater San Francisco Bay
Area who make great food products that their friends, family, and customers
already enjoy. Many dream of transforming their love of making and sharing
food into a full-time career. In order to do that, they face a number of
barriers to entry including lack of access to the right commercial kitchen
space, limited financing, a lack of professional skills and few relationships
with co-packers, distributors and retailers.
One of the biggest challenges for food entrepreneurs is access to a
commercial kitchen space that meets their food production and storage
needs. In addition to having the right equipment and infrastructure at the
right price, many food entrepreneurs also may need other resources to scale
and commercialize their products for regional, then national, sales and
distribution. This could include forming relationships with co-packers,
distributors and wholesale brokers to help them expand their production.
Meanwhile, the market demand for locally produced foods is skyrocketing.
According to the National Association for Specialty Food Trade’s 2012
Industry Report, the U.S. Specialty Food market grew by 19.1% from 2009-
2011, far out-pacing most other sectors of the U.S. economy. Furthermore,
three quarters of retailers say that “local” is the most popular product claim
with consumers and the majority think that it will continue to be the most
popular and fastest-growing product category for the next few years.1
Highlighting the pro-local trend, USDA registered farmers markets grew by
1 Tanner, Ron. 2012. National Association for the Specialty Food Trade. “The State of the
Specialty Food Industry 2012”.
9.6% in 2012.2
This survey, funded by the Business & Entrepreneurship Center at Napa
Valley College (http://www.becatnvc.com), was designed to help
entrepreneurs and established businesses develop kitchens and other services
that meet the needs of food entrepreneurs. We hope it improves success rates
for food entrepreneurs and shared-use commercial kitchens.
Developed on SurveyMonkey.com, the survey was designed by the author
and vetted by eight reviewers from a range of professional backgrounds.
After performing initial outreach, some additional questions were added to
provide supplementary information. To better understand some of the survey
results, anonymous phone interviews were conducted with ten of the
With the help of numerous Bay Area non-profit, government, and private
organizations, an extensive outreach effort was performed from July-
September 2012. A goal was set for a minimum of one hundred completed
surveys for the purpose of basic statistical analysis. The focus is on the 100-
mile Bay Area ‘foodshed’, as defined by the San Francisco Bay Area
Foodshed Assessment (2008)3
. The target market respondent self-identifies
as a “food entrepreneur” and lives within 100 miles of the San Francisco.
162 people started the survey, 119 fit the target market, and of that, 104
completed the full survey.
In addition to descriptive statistics, the author used SPSS software to assess
statistically significant preferences for certain attributes, services or
challenges. Results were deemed significant enough to reject the null
hypothesis if it had a one-sided p-value of .05 or less (two sided of .10 or
less), meaning that there is a 95% chance that one can reject the null
hypothesis that there is no preferential value or rating.
The results and conclusions drawn from the survey and interviews are
based on the perceptions of the respondents. No effort was made to assess
whether the entrepreneurs’ perceptions were consistent with the on-the-
ground reality. If inconsistent, more outreach to entrepreneurs of existing
kitchens and other opportunities may be warranted.
2 U.S. Department of Agriculture. Agricultural Marketing Service. 2012. Farmers Markets and
Local Food Marketing. Farmer’s Market Growth: 1994-2012.
Edward M. Thompson, Alethea Harper and Sibella Krauss. 2008. Think Globally ~ Eat Locally:
San Francisco Foodshed Assessment. American Farmland Trust.
Who is the Bay Area Food Entrepreneur?
The most popular food categories of respondents are Baked
Goods (25%), Confections & Chocolate (15%), Prepared
Foods & Meal Replacements (11%), and Fermented &
Preserved Products, Vinegars and Oils (10%).
Despite the fact that each respondent identified his/herself
as a “food entrepreneur" only 56% currently use a
Follow-up interviews with ten respondents suggest that some depend on
exemptions from kitchen requirements (like coffee roasting) or first started
selling their products through Underground Market events and “under the
table” venues. With the passage of The California Homemade Food Act
(AB1616), otherwise known as "the cottage food law", some of the
interviewed entrepreneurs said they would work from home until they could
better develop their products or planned to use the law to work part-time
from home. Others, though, prefer the larger scale of production and
additional services that commercial kitchens provide.
The vast majority of respondents are self-funded.
On a scale of 1-7, how challenging are these aspects of running your food
business? (1 = Not At All Challenging; 7 = Extremely Challenging)
How Challenging? (1-7 scale) Challenging (5 - 6)
Challenging (7) Combined
Access to the RightCommercial Kitchen 29% 46% 75%
Financing/Funding my Business 27% 45% 72%
ProductMarketing/Sales 30% 25% 55%
Skilled,ContractLabor to Help Produce 27% 18% 45%
Operations/QA/Production Efficiency 30% 15% 45%
Shipping/Distribution 27% 22% 49%
Access to the right commercial kitchen and Financing/Funding my business
are the two biggest challenges faced by food entrepreneurs. Statistical
analysis infers that respondents find these two, plus Product
Marketing/Sales, as significant challenges (mean >4).
What are their Commercial Kitchen Needs?
Of those that currently use a commercial kitchen, 71% pay
less than $25/hour and 44% pay less than $20/hour.
The largest segment of responses (38%) will travel no more
than 30 minutes. Only 26% will travel over 30 minutes.
67% of respondents would (or do) use a kitchen for less than five
4-hour shifts per month. Of ten phone interviews conducted,
two plan to run part-time food businesses.
Few entrepreneurs need more than 1000 square feet of space.
In hindsight, the survey over-estimated spatial needs.
40% of respondents do not need freezer space.
92% need at least 4 square feet of refrigerator storage.
21% need at least 30 square feet of refrigerator storage.
Note: These dimensions do not tell the whole story. In order to protect stored
items from theft, shared use kitchens often build in lockers and other
deterrents, which can take up additional space.
On a scale of 1-7, how important are these on-site features to your needs?
Features Important (5-6) Extremely Combined (>4)
Dry Storage 33% 57% 89%
Refrigerator Storage 21% 65% 87%
Freezer Storage 14% 27% 41%
Organic Certified 15% 18% 34%
USDA Certified 18% 23% 41%
Pallet Jack 7% 9% 15%
Forklift 7% 7% 13%
Dock High Loading 5% 5% 10%
Roll-up doors 8% 9% 16%
A majority of respondents view Dry Storage (57%) and Refrigerator
Storage (65%) as Extremely Important. One-Third of respondents view
an Organic Certified kitchen as important to their business.
Phone interviews and anecdotal conversations suggest that entrepreneurs
think that many shared-use commercial kitchens lack adequate cold and dry
storage and/or charge high rent for use of such space. The results also
suggest that most entrepreneurs do not know how to value features
important in shipping/distribution, such as a Forklift, Dock-High Loading,
Pallet Jack and Roll-Up Doors. A number of respondents simply gave each
of the four the same rating, usually low.
What typee s o f major equipment do yo u need?(Check all that apply)
Answe r Options
Rotary Mixer 26.0% 27
Spiral Mixer 17.3% 18
Single-arm mixer 31.7% 33
Double arm mixer 7.7% 8
Deck convention oven 21.2% 22
Rack convention oven 51.9% 54
Tunnel oven 3.8% 4
Stove-top burners 66.3% 69
Tilt Skillet 9.6% 10
Steam Kettle 12.5% 13
Fryer 10.6% 11
Food Chopper 28.8% 30
Food Processor 55.8% 58
Proofers 8.7% 9
Sheeter 14.4% 15
Dough Dividers 11.5% 12
Depositors 12.5% 13
Fillers 18.3% 19
Bottling line 13.5% 14
Packaging machine 45.2% 47
Slab table 31.7% 33
Chocolate tempering machine 18.3% 19
Dish and pan washing system 63.5% 66
Other Equipment Needs? (be specific) 34.6% 36
answered question 104
Other/Additional R e s p o ns es :
1 Coffee grinder, space and electricity for a dehydrator, table and counter space, and
2 scales for weighing mixes before bagging.
5 FireMixer (Savage brand)
6 Chocolate melter, lots of speed racks, 1-2 metro racks for dry goods, 4-5 metro racks for packaging, tension pad
7 Hobart 20 qt. and/or larger mixerConvection double deck ovens
8 label applicator for jars and bottles.
9 dishwashing machine/sterilizer for bottling
10 smoker, meat grinder, sausage stuffer, vacumn sealer
11 deck oven
12 Convection oven holding 10 full sheet pans each
13 I am pre start up just processing spices, not sure what's most appropriate and washing system.
14 confectionery hot cooker for caramels, toffees, fudge, etc
15 Chamber Vacuum packer
16 Jar canning equipment
17 Not really sure. I'm a personal chef who would like to make homemade breads and rolls for my customers.
18 Commercial pour-over coffee brewer. (I already own one.)
20 Candy cooker with automatic mixing and temperature control
21 cake/pie portion slicer (e.g., Food Tools) for round cakes and possibly also for rectangular cakes. Manual or se
23 Coffee roaster, vacuum packaging equipment
24 i am not sure what I need. i have never done this before but am looking into it.
25 Immersion BlenderFood Mill
26 Would rely on copacker's equipment
27 dehydrator (racks)
28 Counter space
29 An area to clean and prep meat
30 All types of utensils and pans
34 dishwasher/sanatizer for re-used packaging
35 bread slicer
Survey responses and conversations with entrepreneurs suggest that existing
shared use kitchens lack certain key equipment needed to produce their
products. While no one kitchen can likely provide every item that every food
entrepreneur needs, kitchens could consider differentiating themselves by
providing goods and services aimed at specific segments of entrepreneurs.
If interested in equipment needs specific to a segment, contact the author at
55% plan to continue to produce their products in-house.
38% plan to switch (or already use) a co-packer.
Of packaged food entrepreneurs, 43% plan to switch to a co-packer.
Of those who have not already, 58% of respondents plan
to convert to a co-packer in the next year.
69% of respondents were Likely-to-Extremely Likely (mean
score of 5 on 1-7 scale) to pay for additional skilled contract
labor to produce their products.
Follow-up statistical analysis of the sample infers that entrepreneurs are
showed expressed willingness (mean > 4) to consider paying for
professional services that provide (1) Skilled Contract Labor, (2)
Sourcing/Operations/Shipping, and (3) Food Broker/Wholesaler assistance.
More research is needed to assess whether entrepreneurs would also pay for
New Product Development expertise.
Are Food Entrepreneurs Willing to Use Kitchens
that Incorporate Agri-Tourism?
66% are "Somewhat" or "Very" willing to provide
on-site demonstrations to tour groups.
68% are "Somewhat" or "Very" Likely to work in
a kitchen that allows tourists to view the
1. Finding a "commercial kitchen space that fits your needs" is the biggest challenge
facing early stage food entrepreneurs.
Prior to conducting the survey, early conversations with entrepreneurs suggested that
there were very few shared-use commercial kitchens available. But after a few
conversations with commercial kitchen owners, it was apparent that there is vacant rental
space in a number of bay area kitchens. Thus, there is a disconnect between what
entrepreneurs believe commercial kitchens have to offer and what they need.
Survey responses and follow-up interviews suggest that entrepreneurs have trouble
finding the right services at the right price. Since many early stage entrepreneurs have
limited financing, they are wary of wasting it using the wrong kitchen and may get turned
off from a potential kitchen based on hearsay. Nonetheless, according to those who claim
to have researched the options, the three most common responses are that many shared-
use kitchens are either 1) too expensive, 2) in a very dangerous neighborhood, 3) lack
affordable cold/freezer/dry storage space or a combination thereof. They are also
concerned with cleanliness and theft. Considering that most of the entrepreneurs
surveyed pay less than $25 per hour to use commercial-grade equipment, it is also
possible that their perception of expensive kitchen rates is a function of poor financial
planning, including inefficient use of kitchen space and/or unmet sales expectations.
2. San Francisco Bay food entrepreneurs view "funding/financing my business" as
one of the two greatest challenges, yet place little value on paying for "financial
The survey shows that "financing/funding my business" is one of the two greatest
challenges faced by early stage food entrepreneurs. Interviews and secondary research
suggests that many early stage food makers do not know their cost of production, nor pay
themselves a salary for their work, or have financial plans for managing and monitoring
their businesses. This makes strategic decisions like choosing the right commercial
kitchen, deciding whether to use a co-packer and/or whether to hire someone to distribute
or wholesale their products that much more daunting. Most micro-financiers,
commercial banks, and other traditional lending sources require that a business operate
profitably for a few years before financing a young business. This leaves early-stage food
entrepreneurs with few options to find outside financing, which explains why greater than
81% of respondents are self-funded.
Meanwhile, when asked which professional services entrepreneurs were willing to
consider paying for, "financial management" ranked last. This suggests that they perhaps
don't understand the value of well-documented finances or feel there are more immediate,
higher-priority needs. Either way, many entrepreneurs interviewed could benefit from
educational classes or services to help them better manage their finances.
3. Cold Storage Space is Highly Valued:
Survey responses and interviews suggest that entrepreneurs highly value cold and dry
storage space. Conversations suggest that some entrepreneurs perceive that kitchens do
not provide enough of these amenities or charge too much for them. In an informal
conversation, one entrepreneur lamented that there was no commercial kitchen space that
specialized in freezer space where he felt he had the on-site storage capacity to grow his
business over time. As previously mentioned, one solution could be for commercial
kitchens to differentiate themselves from their competitors through providing equipment
and amenities specific to one or more segments of food makers. Nonetheless, the
purchase and utility costs of cold storage space may make it difficult for commercial
kitchen owners to provide as much space as entrepreneurs need.
4. Commercial Kitchens could consider specializing or better marketing
themselves to best meet the needs of a specific segment of entrepreneurs and
differentiate themselves from the competition.
Anecdotal conversations and follow-up interviews with entrepreneurs suggest that they
perceive existing shared-use kitchens to be better designed for catering than packaged
production, relying on a “one size fits all” approach to satisfying a very diverse clientele
with a variety of needs. Not only does this pose challenges for entrepreneurs, but also
might also make it more difficult for kitchen owners/managers to differentiate
themselves and build loyalty with specific clientele. One solution could be for kitchens
to take stock of existing and easily acquired resources, and market their offerings toward
certain types of entrepreneurs. In addition, secondary research suggests that Bay Area
kitchens could do a better job of using social media to market themselves to clientele.
Hopefully this survey will allow kitchen owner/managers to assess their individual
strengths vis-à-vis their customers and differentiate by marketing to those segments.
About the sponsor: The Business & Entrepreneurship Center (BEC) at Napa Valley College
works with private, public and non-profit resources to build strong, sustainable and successful
businesses resulting in wealth creation, job creation and retention, and better economic health in
California. For more information: http://www.becatnvc.com. Marie Bianco, a consultant with the
BEC, first spearheaded this project and was an invaluable resource and advisor in ensuring its
success. She can be reached at firstname.lastname@example.org.
About the author: Frederick Smith attained a Master of Business Administration (MBA) degree
from UC Davis Graduate School of Management in 2012. He also holds a previous M.S. in
Environmental Studies from the University of Montana - Missoula (2003). Prior to his MBA
studies, Frederick spent nine years in environmental advocacy, most recently as the Executive
Director of the Environmental Action Committee of West Marin from 2007-2010. He currently
works as an independent consultant performing market research and helping food and agricultural
entrepreneurs with business planning and strategy. He can be reached at email@example.com or via