Aspiring Food Entrepreneurs Add Value to Economy

Current health regulations prevent Rhode Islanders from using unlicensed kitchens to prepare and sell food for public consumption, but could a law like the one recently passed in California create jobs in Rhode Island?

By KARINA LUTZ/ecoRI.org News contributor

Stroll through one of Rhode Island’s wintertime farmers markets — there are currently eight from Portsmouth to Pawtucket — and it's easy to be awed by the array of local food available. Even if you trudged through four-month-old snow banks to get there, you'll still be greeted with fresh overwintered root vegetables, cold-storage apples, mushrooms and greenhouse greens.

Seafood, meat, dairy and eggs continue year-round, and maple syrup season beckons. Canned pickles, jams, sauerkraut and salsas and baked goods abound. The farms and small businesses that “add value” by processing and preserving these and other foods are critical to fleshing out the local food system's year-round viability, and recent efforts are making it easier for such businesses to start up here.

It might seem that local food entrepreneurs have grown in recent years, popping up like food trucks. According to the Brown University student-run Providence Foodshed Justice Mapping Project, 2,863 people work for 352 Rhode Island-based food processors. Farm Fresh Rhode Island lists 303 "artisan food producers" in the state.

But both accountings likely include some businesses that no longer are in operation and feature companies that have been in business for many years, such as the venerable Virginia & Spanish Peanut Co., which has been grinding peanut butter in an old industrial area of West Elmwood for a century. Yacht Club Bottling Works, which will celebrate a century in business next year, found new life when the family’s younger generation hooked up with the local food movement. Venda Ravioli, the Federal Hill pasta-maker, went upscale as its deli home on Atwells Avenue became a foodie haven.

And while many of Farm Fresh's listed producers make local food for the local market, not all source their ingredients locally, and many are happy to sell outside of the region, being more foodie than transition townie.

Even if local food entrepreneurs seem to be growing, only 1 percent of what Rhode Islanders catch and grow in state is consumed in here, according to The Rhode Island Foundation's Make It Happen report. Everyone agrees there is room for much growth in one of the state’s strongest economic sectors, and that food processing and preserving are key to the local food movement's long-term success. The movement is powered by the imminent necessity of creating a robust local food system before the industrial food system collapses.

Meanwhile, cracks in the system yawn — rising prices worldwide in tandem with oil's price shocks, thousands of food miles made possible only by oil subsidies and lax environmental protections, food deserts in the most food-rich country in the world, pests increasingly immune to pesticides, the slightly regulated introduction of genetically modified organisms, abuse of antibiotics and factory-farmed animals, and the depletion of aquifers.

The Rhode Island Foundation and the local food movement have been working to identify and overcome the barriers to food processing and preparation for entrepreneurs who would like to start or expand a business. One large barrier for small businesses has been a lack of access to Department of Health-certified kitchens, which are required by state law and restrict cottage food production. The law requires non-farmers to be certified in food safety and licensed as food processors, and to work out of certified kitchens.

Uncertified farm kitchens can only preserve or produce a handful of foodstuffs. Bringing a home or farm's kitchen up to code compliance and certifying it can cost tens of thousands of dollars, and buying the needed equipment can be prohibitive for cottage businesses and small startups.

Sharing the cost 

The 115-page Make It Happen report and the Rhode Island Food Policy Council have identified ways to drive down these costs, such as shared commercial kitchens, shared equipment and business incubators. All three strategies are now beginning to take form in Rhode Island.

Sandywoods Farm, a co-housing development in Tiverton, launched a commercial kitchen to support the development and its broader community about a year ago. “The need for these incubator kitchens is greater than ever,” said Russ Smith, Sandywoods Farm's program coordinator.

Lisa Davis of Community Bread was able to start her baking business because of the Sandywoods kitchen’s accessibility and affordability. “You know, 85 percent of new businesses fail. It would cost $250,000 to start a bakery,” she said. “So, I thought, if I'm going to fail, I don't want to fail big. I wanted to fail small.”

Using the farm’s kitchen and equipment — industrial-sized mixer and ovens — drastically reduced her start-up costs. To raise capital, she applied the community-supported agriculture (CSA) model to her kosher bakery: customers subscribe to her service, pay up front and receive a basket of what she bakes that week — every Friday afternoon in time for Shabbat.

Sandywoods Farm’s kitchen has been open since April 2013 and has already fledged one of the businesses it incubated. June (Lawton) Love’s English Cakes and Baked Goods started at the farm and recently moved to larger quarters in Middletown.

“June Love is our first success story,” said Sandywoods Farm kitchen manager Sandra Dugan. “Her business really took off and she's such a nice lady. We couldn't be prouder.”

Sandywoods currently has three entrepreneurs working out of the kitchen and is seeking more applicants.

As a Rhode Island Food Policy Council report found: “New processing infrastructure and commercial kitchens are springing up around the state, such as mobile poultry processing (and) the Hope & Main shared-use kitchen and business incubator. ... This infrastructure can be leveraged by and promoted to farmers and other food entrepreneurs seeking to add value to local foods through processing.”

Hope & Main’s shared commercial kitchen and food business incubator is poised to open in June, and the business is now accepting applications and providing workshops to teach prospective entrepreneurs what it takes to start a food business in Rhode Island.

The multi-kitchen facility on Main Street in Warren will be able to provide work space for 40-50 people at a time, will have both cold and dry storage, will feature a small garden cared for by New Urban Farmers, and will host a farmers market.

Another shared commercial kitchen is in the works at the old Eastern Butcher Block factory in the Olneyville section of Providence.

Help is out there

Davis received assistance in planning and launching her business from the small-business mentoring program SCORE. She learned the importance of having a solid business plan, and being prepared to respond to the unexpected.

“You have to run your numbers, and have stuff that's measurable," she said, but the inevitable surprises mean "you have to be flexible and change to customers' needs."

Her persistence pushed through delays and troubles. "It's the most amount of work that you'll ever do for the least amount of money, but it also gives you flexibility,” she said. For single-mom Davis, that meant the ability to follow her dream of being a baker without having to go to work in the middle of the night. Instead she arranges her schedule around her kids' school day.

Food preservation or preparation businesses must comply with several food-safety regulations besides using a certified kitchen. The entrepreneurs themselves must be certified by the state Department of Health (DOH) in safe food handling ("ServSafe" certification), be licensed in the type of food they produce, and — here's another instance when shared kitchens help out — have at least one certified food-safety manger employed on site.

The state and municipalities require business licenses. Shared kitchens require businesses to carry liability insurance as well.

The state’s incubator programs hope to help prospective entrepreneurs sort out the requirements and plan their businesses. Farm Fresh’s Open Kitchen project connects entrepreneurs with shared commercial kitchens such as Hope & Main, Sandywoods and the Dartmouth Grange. The Open Kitchen website includes a good list of what is needed to become a food processor in Rhode Island, and describes how the program supports local food entrepreneurs with a variety of resources.

Hope & Main is offering a workshop series on how to get started with business planning and certification.

Incubators make the process less daunting, and the rewards are many. As June Lawton said about the cakes she sells at farmers markets, “It's a lovely thing to do. And you meet the nicest people. At the end of the season they give me a big hug and say, see you next year.”

Cottage rules

One possible way to lower the barrier to entry into the local food sector would be to relax the law restricting cottage food industries, the way California recently did.

In New England, University of Rhode Island food-safety expert Lori Pivarnik last year studied the laws and regulations in each state designed to protect the public from food-borne illness. She found most are similar to Rhode Island, except Vermont. Otherwise, she said, “what impressed me was how limited they all were.”

Rhode Island law restricts cottage food to farms, and even there to only a handful of items that Pivarnik calls “very, very low-risk foods,” such as jams and jellies, vinegars, yeast breads, fruit pies, maple syrup and dried herbs. Even pickles, which producers can make and sell in Connecticut after they receive training, can’t be sold here except by certified and licensed food processors.

Pivarnik, like all the policymakers and most food entrepreneurs ecoRI News spoke with, believes Rhode Island’s law makes sense.

“Vermont is a disaster waiting to happen. As a food-safety person, it's pretty scary what they do allow. And there's no enforcement capability,” said Lisa Raiola, Hope & Main's founder and president. She believes Rhode Island’s regulations are on the right track. “The state is already struggling to inspect its restaurants and food producers.”

Many believe greater numbers of less-regulated home-based businesses would stretch beyond control. In fact, Raiola found DOH Food Systems Coordinator and Food Safety personnel made the certification and permitting process easy.

Others said the last thing the local food movement needs now is an outbreak of tainted food that could have been prevented. “Being required to follow the food code isn’t a big deal because I understand the value of having those laws in place,” said Daniel Sheehan, founder of bakery startup Humble Pie in Providence. “The laws that govern my practices are but constraints. I know that most of these constraints are really in place to protect us from abuses of the industrialized food system.”

Sandywoods Farm has been through the process of certifying its facilities as a commercial kitchen under the DOH, and helps the entrepreneurs they are incubating get their certifications and business licenses. Dugan finds the Department of Health “very helpful. And they help with ideas about how to sell and package your product.”

Only one of the entrepreneurs ecoRI News spoke with found the state less than helpful, saying the information on the DOH website is "very confusing."

However, support of current regulations isn’t unanimous. Many avoid them completely, selling on the Internet or through word of mouth. Most farmers markets require their sellers to have DOH certification.

One entrepreneur said if she had to do a certified kitchen, she couldn’t “help older folks stay in their homes by offering them reasonably priced home cooking.” Another said, “I know what to do to keep food safe. I probably do a better job than some of these people (his customers) do at home.”

Pivarnik finds this mentality dangerous. “People think they know how to do it safely, and they don't.” Most food-borne illness is cooked up at home, she said, by people doing what they think is safe. She also noted a Harris Poll on food safety that found 73 percent of 2,400 Americans randomly sampled want more government intervention in food safety.

“Multiple studies show that consumers want no risk,” Pivarnik said. “They want to know when they buy something from the market they aren't going to get sick.” (You may also want to know when you preserve your own harvest that you aren’t going to get your family and friends sick. To that end, Nicole Richard and Sejal Lanterman of URI Extension offer workshops twice a year on safe food preservation for home and farm, including cold-pack and pressure canning.)

“Is there a way to protect the public and to allow these small cottage businesses to get started?” asked Community Bread's Smith. “It's a balancing act between encouraging small business and protecting public health.”

Local food entrepreneurs will give a public talk hosted by the Rhode Island Food Policy Council in May.