At The Food Corridor, we have the privilege of working alongside innovative leaders in the food system during a time of mass disruption. Societal trends like the rising cost of real estate, the access economy, the gig economy, flex-lifestyles, digitization of business services, last-mile advancements, and a sustained consumer love for craft and specialty foods are blending to create the perfect conditions for a new paradigm in the food system. Taking stock of what we see from The Food Corridor’s place in the ecosystem, we built our list of 5 food system trends we anticipate for 2019.
1. Shared kitchens
In 2018, we saw significant growth in the number and type of shared kitchens across the country (and internationally!). And we see this food system trend continuing in 2019 with increased fervor. A shared use kitchen, also known as a commissary or incubator kitchen, is a commercially-licensed space for chefs, bakers, caterers, food trucks, and other culinary professionals. These makers typically pay for a membership, or by the hour, in order to rent out cooking space alongside other food entrepreneurs. They also get to share otherwise expensive resources like cold storage, equipment, and cleaning supplies.
A shared kitchen is an emerging food system trend that plays well with another economic trend: access. Increasing access to infrastructure lowers the overhead cost it takes to start a business. Some of the top shared kitchen concepts in the for-profit category are:
- Food truck commissaries, like Food Truck Central in Kansas City, that provide parking with power, grey water dump station, potable water source, grease dumpster, and convenient access to the interstates and downtown.
- Ghost kitchens or delivery-only commissaries, like Kitchen United, that provide restaurant operators a turnkey way to expand their delivery services by providing commercial kitchen space, business intelligence, and resources to build optimal food delivery programs.
- Culinary flex spaces, like Crafted Kitchen in Los Angeles, that offer state-of-the-art test kitchens, shared use kitchens, and private kitchens to support culinary entrepreneurs at any stage of their business.
- Incubator kitchens, like Kitchentown in San Mateo, California, that use strategic partnerships to connect emerging brands with food industry consultation, growth capital, and access to technology, manufacturing, and a community of like-minded founders.
Non-profits and social benefit organizations are also leading innovators in the shared kitchen industry. We love seeing incubator kitchens with unique programs focused on underrepresented or underserved populations — another food system trend. Many partner with economic development agencies, family foundations, and social service departments aimed at building and sustaining vibrant communities through food. Here are some of our favorites:
- Detroit Kitchen Connect – Detroit Kitchen Connect, an Eastern Market Corporation program, supports a diverse group of entrepreneurs doing what they love and contributing to Detroit’s growing good-food system. In collaboration with local partners, they are connecting food entrepreneurs with a network of neighborhood commercial kitchens they can use to launch their business.
- La Cocina – Touted as one of the most important food organizations in San Francisco, La Cocina incubated 39 businesses in 2017, creating jobs primarily for women from communities of color and immigrant communities. Their vision is that entrepreneurs gain financial security by doing what they love to do, creating an innovative, vibrant and inclusive economic landscape.
- Hot Bread Kitchen – On the east coast, Hot Bread Kitchen in East Harlem is a commercial bakery that takes a 4-pronged approach to support emerging food businesses: 1. commercial kitchen access; 2. business development support; 3. culinary community; and 4. market access. Their Bakers in Training Program is an intensive, paid on-the-job program for women seeking economic mobility.
- Spice Kitchen Incubator – run by the International Refugee Committee in Salt Lake City, Spice Kitchen Incubator is a food business incubator focused on creating opportunities for refugees and disadvantaged individuals. Their model begins with an application and enrollment period, a pre-incubation phase (4-6 months) to learn business foundations, an incubation period (6 months – 4 years) where enrollees retain access to the commercial kitchen as well as access to capital and resources to grow, and graduation (ongoing). All graduates become part of the alumni community and many continue to rent space and access resources. Their catering and food truck programs give direct market access to entrepreneurs while providing SLC access to the best ethnic food you can find.
- The Hatchery – newly launched, The Hatchery in Chicago is a non-profit food and beverage incubator. The 67,000 square foot facility is one of the largest incubation spaces in the U.S. with 56 private production-ready kitchens and a large shared kitchen. The facility is a partnership between Accion and the Industrial Council of Nearwest Chicago. In addition to supporting entrepreneurs grow their businesses, The Hatchery will also train and place job applicants in the food and beverage industry, creating a new pipeline of talent for food companies looking for employees.
2. Food halls, courts, and rallies
Let’s face it, the suburban mall food court used to be the place to be! You could grab an Orange Julius, Hot Dog on a Stick from a woman in a silly hat, and a slice of pizza from Sbarro. Something for everyone. The concept of communal eating is not a new phenomenon, but with suburban malls going the way of MC Hammer pants, we have seen a rise in new food hall and food court concepts. We predict this food system trend is 2 legit 2 quit in 2019.
Food halls in cities have seen a resurgence – many started in the early 1900s and harken back to the street markets of yesteryear. Many are still a place to grab grocery staples like freshly caught seafood, gourmet cheeses, loaves of bread, fresh fruits and veggies, and cut flowers. Modern versions host an array of food trends from hip purveyors and restauranteurs, delicatessens, and authentic cuisine, alongside cold brew, kombucha, fresh pressed coffee and juice, craft beer, and wine, and plenty of seating to meet up with friends and colleagues after work or to grab lunch during the work week. Entertainment like cooking demos, musical acts, comedy troupes, and other seasonal events aim to bring foot traffic in on the weekends.
The Travel Channel put together a great list of 10 of the Most Delicious Food Halls in America – which aptly includes the Findlay Market in Cincinnati which is the oldest public market in Ohio (160 years!). We love Findlay because they also have a shared use kitchen and allow their clients to sell in the market. Some unique versions and trends we see are:
- Food truck rallies – also known as festivals, rodeos, or gatherings, a food truck rally is an event where multiple operating trucks gather in one location to provide lunch break options to workers or dining service to events and festivals. Essentially a pop up food court.
- What’s old is new again – food halls are an amazing opportunity for redevelopment of old historic buildings in urban centers. For example Melrose Market in Seattle housed in an old automotive building, Ponce City Market in an old Sears, and Roebuck and Co. store and warehouse in Atlanta. We hope you aren’t tired of exposed brick yet.
- Launch pads – Avanti Food and Beverage is a “collective eatery” that rents 7 commercial kitchens made from shipping containers to restaurant concepts providing a lounge, centralized bar, communal dining areas, and a rooftop bar overlooking downtown Denver. Chefs can test restaurant concepts, menu items, and brands with discerning diners before making the expensive leap to brick and mortar. After two years of success, Chef Kevin Grossi recently moved his restaurant (The Regional) from Avanti to downtown Fort Collins, Colorado. Perhaps the “lean startup” mentality has come to the food industry. Given the high failure rate in the hospitality sector, we welcome this approach and are eager to see more.
3. Food delivery
Delivering food, whether as hot meals, prepared meals, kits, or as groceries, is a food system trend that is far from slowing down. The innovation (and the investment) happening in this space is hard to keep a pulse on. Shopping and ordering from a mobile device are now as common as texting. And who would have thought the pizza industry was so far ahead of the game? Domino’s Pizza was first to let people order pizza via a Tweet or a virtual assistant named Dom (a pizza bot for Facebook messenger).
The food delivery players (Deliveroo, GrubHub, and UberEats) continue to build market share through land grab, acquisition, and technological advancements. Supportive hardware and software like Galley Solutions, Ordermark, and Toast are taking notice. Platforms like The Kitchen Door are helping restaurants who are looking to relocate their delivery operations and find rentable commercial kitchen space in their area. The flurry of activity is exciting but significant questions remain around sustainable business models and unit economics.
In 2019, the last mile distribution will be what to watch. Expect to see progress in delivery with robots, drones, and on-demand workers leveraging the gig economy. Will Rosie the Robot from the Jetsons be moving in any time soon? I don’t know but we are eager to watch as this area heats up.
Further up the food chain from last mile distribution are innovations in supply chain logistics. No place in food will see as much disruption as traditional distributors. Micro distributors can be found in emerging markets, where markets are fragmented and leveraging partnerships makes sense for large corporations to implement. Emerging food brands in the U.S. are eagerly watching Amazon to see what the acquisition of Whole Foods will mean for the old way of doing distribution. In Colorado, we have two local specialty distributors – Loco Foods in Fort Collins and FoodMaven in Colorado Springs. Deemed “alternative distributors,” both companies focus relationships with hyperlocal brands, valued partners, and social responsibility. Another notable stand out is Shelfmint out of New York City. They are empowering brands to connect directly to their network of smaller-scale retailers without traditional slotting or listing fees, potentially leading to better unit economics for the brands. Connect to a food-centric drop shipping platform or alternative distributor, and the need for a large distributor may be a thing of the past.
The increased ability to sell online may be the biggest cause for disruption in distribution. The shift towards e-commerce, referred to as Amazonification, is providing (or perhaps is forcing) an opening for workarounds in distribution and the creation of collaborative digital environments. For example, NatchCom is an ‘un-conference’ based in Boulder, Colorado that is helping the natural and organic product industry master e-commerce in the age of Amazon. Timely, right? Evidently so, since their last gathering in October 2018 sold out. We see this conference selling out again in 2019.
5. Food ecosystems
The final food system trend we see taking root in 2019 is a spike in food ecosystems. Colorado is home to Naturally Boulder, the largest membership-based organization for natural food professionals in the country. Their mission is “to nurture conscious growth, leadership and innovation in the Colorado natural products community.” They do that by leveraging a strong industry sponsorship program, hosting networking and educational events, providing educational resources, and connecting industry professionals with jobs and services via their online directory. Every year culminates in the annual Pitch Slam, showcasing the region’s top emerging brands and Autumn Awards (past winners include The Honest Stand, Wild Zora, Bhakti Chai, and EVOL Foods). In 2018, Naturally Boulder leased the model to a group of industry leaders in California to help launch Naturally Bay Area. Word on the street is 2019 will see a few additional cities added to the Naturally lineup and we are eager to see which food cities will emerge.
Other food ecosystems exist to provide a space for industry professionals to grow and learn in digital communities. On Facebook, The Food Corridor moderates two lively networks: the Network for Incubator and Commissary Kitchens and the Network for Food Business Entrepreneurs. ChefsTalk has always been a core resource for food business professionals to ask questions and identify resources. Our newest favorite that launched in 2018 is Foodboro, who is building a trusted digital community for food and beverage makers. (Full disclosure: we are friends with the Foodboro folks). Aside from their fantastic news rounds ups and super relevant content (Visual Merchandising For Small Brands; Must Watch Food and Beverage Makers in Every State; Ask a Distribution Expert: Chris Wren), Foodboro membership also includes access to their Toolkit which provides discounts on common food business ecosystem services like Squarespace, Bench, ShipStation, and VistaPrint. As food businesses spring up all over the country, food ecosystems are becoming more relevant and critical to their success. We think 2019 is prime time for some household names to start emerging.
So, that’s our list of food system trends! We’d love to hear what you think. What trends are you seeing? What are you excited about in 2019?