Calling start-ups the ‘Uber of Food’ was an irritatingly widespread industry meme until the arrival of UberEats. One sector where it was particularly rife was among platforms that allow home cooks to sell their meals directly to the public. But these would be more accurately described as ‘Air BnBs of Food’ as they allow people to take advantage of their home kitchens for extra cash.
The idea has a storied history, with platforms coming across a myriad of issues involving working with informal home cooks, food safety regulations, and logistics. But with a new wave of tech platforms buoyed by a change in legislation, the cottage food industry is full of hope once more.
Inherent problems persist though. As these platforms are potentially able to deliver farther and wider with the help of food delivery apps, and if the trend of legalization spreads nationwide, the problems are going to scale just as quickly as the platforms.
The question for the shared-use kitchen industry (and the public) to be concerned with is: are we about to see the rise of unlicensed ghost kitchens in the home?
And where does this leave operators of shared commercial kitchens – kitchen incubators, community kitchens, and commissary kitchens – whose owners have invested their savings into a properly regulated, professional facility?
Let’s take a look at the history of the market for home-cooked food, what the law says, and see if we can predict how much of a threat this poses to the emerging shared-use facility industry.
Josephine: A Promising Start for the Home-cooked Food Marketplace
The first real success story in the space was Josephine, a home-cooked food platform founded in 2015. The founders were full of good intentions, aiming to help home cooks in the Bay Area make an independent living feeding their communities.
After initially raising $3 million in funding, Josephine found success providing meals via over 100 home cooks through its online marketplace. Home cooks would make meals for their neighbors to come round and collect themselves. Clearly the sense of community and bonus of meeting new people in the area was worth the inconvenience and the regulatory skirting.
But Josephine was in a constant battle with the health department to legitimize the idea of home cooks selling meals to the public. Some believe Josephine’s mistake was in taking on regulators openly. Disruptors like Uber and Air BnB succeeded by building the platform and community of users first and worrying about regulation later. This strategy wasn’t foolproof, but they’re now big enough to take on legal battles and absorb the cost of fighting legislation that threatens business.
By trying to engage with lawmakers and change legislation early, Josephine shot itself in the foot and ended up drawing more attention to its cooks producing food in unregulated home kitchens, which eventually led to a flurry of cease-and-desist letters and the demise of the platform in early 2018. Josephine isn’t alone. Similar platforms like Sprig, SpoonRocket, and Munchery have all shut down.
You can see the appeal of these services for the community they operate in. It’s a nice idea to have a meal cooked by your neighbor. It can foster a sense of community and support the local economy. And there may be the thought that home-cooked food is more wholesome and healthier than restaurant food.
But at a time when food delivery platforms like DoorDash, GrubHub, and UberEats are thriving and growing like crazy, there’s obviously a huge demand for off-premises eating. So why have so many of these platforms shutdown?
Why Did These Platforms Fail?
This article from the Atlantic does a pretty good job of illustrating the benefits and shortfalls of Sprig and Josephine. (TLDR: “The food was decent but the vibes were dystopian”.)
Here are some of the fundamental problems with the idea.
Home Cooks are Unreliable
Despite what we see on beloved cooking shows, being a chef isn’t about creating one incredibly beautiful plate of food. It is about being a manager of what is essentially a production line of cooks. Even in the fanciest restaurants, success is all about organization, planning, food safety compliance, and efficient execution.
Home cooks might make delicious meals, but they’re not trained to make them at scale or handle the logistics of a busy lunchtime rush. Generally speaking, cooks who want to make a living from the comfort of their home kitchens are not invested in it enough.
Once the initial novelty wears off and the hard work kicks in, they are likely to drop out, leaving the platform with no product.
The Logistics are a Nightmare
The logistics of coordinating orders and pick-ups from multiple restaurants are hard enough. Imagine trying to arrange this from people’s homes. Kitchens tucked away 14 floors up in apartment blocks. Cooks busy juggling cooking and packaging meals without the sophisticated tech systems in place to handle accurate orders.
When you consider the money pouring into more robust food delivery networks and ghost kitchens, it’s hard to see how a home kitchen operation could ever compete at scale.
Consumers are Looking for Convenience
The good vibes of collecting a home-cooked meal from someone in your community can only take you so far. Ultimately, you’re competing against giant tech companies, creating brands specifically for delivery based on consumer demand. They have far more resources and the ability to run at a loss until they dominate the local market.
It’s lovely to get a home-cooked meal from your neighbor every now and again, but do you really want to drive around and pick it up if you can get a restaurant meal delivered reliably to your home or office? All said and done, people are looking for convenience over sentiment. In fact, a potluck organizing platform is more inclined to succeed if sentiment is what the customer is truly after.
Home Kitchens are Difficult to Regulate
The biggest problem for these platforms is the food safety risk is real. Consumers and lawmakers alike show significant resistance to allowing homes to operate as restaurants. This is because restaurants must conform to rigorous safety standards based on scientific best practices and enforced by local health departments that are funded by taxpayers. Customers have come to expect clean and sanitary production of their food and a majority have a hard time with the concept of relaxing those expectations. It’s very difficult for these platforms to guarantee the same standards in food cooked in the home by amateurs.
Some argue home cooks are more accountable for the safety of their cooking. Especially as the platforms have an Uber-like rating system that will quickly expose those who disappoint customers.
But just because it tastes good and the kitchen looks fine at a glance, doesn’t mean food is being stored safely, pets are kept out of the kitchen, or proper temperature monitoring procedures are being followed. It only takes one slip – one case of food poisoning can lead to a death. To leave the kind of peer-to-peer rating system that is easily duped and notoriously unreliable is at best irresponsible.
Where Are We Today?
When Josephine closed, the founders weren’t ready to give up on the big idea of democratizing the food industry. Co-founders Matt Jorgensen and Charley Wang remain part of the team behind the COOK Alliance, which advocates for the cottage food industry and provides resources for home cooks looking to start a business from their home kitchens.
They claim responsibility for the recent push to legalize home kitchens selling meals on delivery apps. In January 2019, The Homemade Food Operations Act came into effect in California. The relevant part of the new law, Assembly Bill 626, legalizes the sale of home-cooked meals to the public. Here’s how it works:
Home cooks must apply for a license and comply with certain conditions including:
- Use calibrated food thermometers to check temperatures
- Successfully complete a Food Managers Certification
- No eating, drinking or smoking during food preparation
- Environmental Health is allowed to inspect your home
- Once a year after you’ve got a permit
- In response to a customer complaint
And you are limited by certain restrictions including:
- Not allowed to sell more than 30 meals per day or 60 per week
- No more than one full-time employee
- One operation per household
- Sales up to $50,000 a year
The rules do seem to deal with many of the issues laid out above. The regulations set safety guidelines and leave room for inspections. However, by design, the operational restrictions make it even harder for home cooks to compete with restaurant delivery and ghost kitchens.
Enter DishDivvy, a home-cooked meal platform founded in 2018 that helped to lobby for the change in the law. DishDivvy has tried to deal with the safety concerns by internally vetting its cooks with interviews and on-site inspections. It has been delivering home-cooked meals in Los Angeles since 2019 and has recently officially announced a partnership with Doordash.
In California, local governments have the choice of whether to implement AB 626 or not and most have chosen not to because home kitchens are so hard to regulate. But a similar law has come into effect in Utah, where DishDivvy now also operates. And it’s fairly likely that other states will follow suit.
If more states decide to implement similar laws, we may see an upswing in the number of platforms, like DIshDivvy, using third-party delivery services to offer home-cooked meals further and wider.
This now presents new issues. This kind of platform was initially a cute and homey concept when people had to go over and pick up the food. They would theoretically get invited inside while the meal was finished and there was the added value of a sense of community or connectivity about it. But now with the rise of home delivery platforms and change in the law, these home cooks could be catering to far more people who are further removed from the cook. With this detachment, this type of platform is losing one of its key selling points, while retaining all of its inherent problems.
Can we really be sure a platform like this can achieve a high level of food safety at scale? Are we going to end up with home kitchens with less stringent regulation competing with fully licensed ghost kitchens? Or the inability to identify where food is being produced altogether? In an era where customers are seeking more connectivity and information about their food, what is the appetite for so-called ‘ghost kitchens’?
What Does This Mean for Ghost Kitchens?
If we set the barrier to entry so low that it’s possible to start a food business from your home kitchen, are we going to see multiple brands coming out of these kitchens? In this scenario, where do you draw the line between a licensed shared kitchen and a home kitchen? It has to be drawn somewhere.
Would it not make more sense to help cash-strapped food entrepreneurs grow their businesses in a legal, licensed facility that is built-for-purpose? And in addition, give them access to the resources, business support, adequate training, and professional equipment that can take their cottage business to the next level?
A Microenterprise Home Kitchen Operation (MEHKO) permit alone can cost as much as $150 and the COOK Alliance estimates the total cost of setting up is $859, not including changes that are likely needed to get your kitchen up to code ie. separate sinks and large reliable refrigerators.
And this is before you’ve started considering paying staff, buying ingredients, or doing any marketing. All of this and you’re restricted in the amount of revenue you can generate.
That is, after all, exactly what these facilities are for. And at a legitimate kitchen like this, there would be no restrictions on your revenue and business growth. Wouldn’t it be better to spread the cost monthly and get access to a community kitchen or local incubator?
Given the fundamental problems with the idea of selling home-cooked meals, it’s going to be interesting to see how things play out. Perhaps in smaller, more remote communities, the community-feel will win out and these platforms may be able to survive. Although in many areas, community kitchens are well placed to fulfill this demand anyway.
With the biggest delivery platforms investing in ghost kitchens and using big data to optimize for customer needs, surely if customers want homestyle meals, these giants will start to provide them. But they will do this from centralized ghost kitchens rather than using home cooks.
The idea of delivering home-cooked meals at scale is at best a well-intentioned but flawed idea, and at worst a food safety catastrophe waiting to happen. Do we have to remain wedded to the idea? Surely a better move is to empower home cooks to outgrow their kitchens and take their businesses seriously by moving into a shared commercial kitchen.
That empowerment is core to the mission of The Food Corridor. If you are looking for commercial kitchen space, we host the largest directory of available space and provide resources to the world’s largest network of shared kitchens. Our mission is to enable efficiency, growth, and innovation in local food. We believe the best way to do that is by using existing capacity and following reasonable food safety regulations. All while helping start-ups and cottage industries to formalize their business practices and level up to become self-sustaining.