Rise of the Culinary Y-Combinators
WHY YOU SHOULD CARE
Kitchen incubators like La Cocina give low-income entrepreneurs the chance to cook up their culinary dreams — creating a more vibrant food scene that appeals to everyone’s palates.
Dilsa Lugo credits her 3-year-old son for helping to launch her career. She was washing a glass-paned door of the Berkeley, Calif., coffee shop where she waitressed when he stopped by with her husband. “Mom, you’re the best window washer,” he said, hugging her. Lugo smiled. But she wanted to be the best at something that made her proud too.
After she immigrated to the U.S. from Cuernavaca, Mexico, she scoured Berkeley for a restaurant that served authentic tacos. When she finally found one, she dreamed of recreating that same feeling of homecoming in a restaurant of her own. So she signed up for English classes at a local school and heard a presentation about La Cocina, a nonprofit kitchen incubator that helps low-income women grow their own food businesses. She immediately submitted an application and was accepted to the program.
She spent the next five years learning the ropes of the food industry. Next month, Lugo will graduate from La Cocina and open Los Cilantros, a café serving a variety of simple, organic dishes—from tamales and tortas to guava pastries and churros. She’s run Los Cilantros as a catering business for the past nine years. “It’s very hard physically, and it’s a lot of pressure,” she says. “But at the end of the day, I’m very happy.”
Kitchen incubators lower the barrier of entry to the food industry, offering low-cost commercial kitchen space and technical assistance.
La Cocina is one of about 150 kitchen incubators across the country. Think of them as Y-combinators for low-income food entrepreneurs. These incubators lower the barrier of entry to the food industry, offering low-cost commercial kitchen space and technical assistance, such as workshops for writing a business plan and navigating licensing regulations.
Many participants owned food businesses in their home countries or bring years of cooking experience; kitchen incubators simply help them translate their skills to a more regulated and paperwork-entangled U.S. market. La Cocina participant Bini Pradhan learned to cook in her mother’s Kathmandu kitchen and trained as a chef in India, for example, while Eji Atlaw spent her childhood cooking with her mother and four sisters in Addis Ababa, Ethiopia.
But as with any venture, an idealistic vision isn’t enough to pay the bills. Many incubators have failed , raising concerns about the sustainability of the business model, according to a report from Philadelphia-based consulting firm Econsult Solutions. La Cocina has an annual operations budget of $2.1 million, and countless hours go into supporting participants.
Tucked in a leafy residential neighborhood in San Francisco’s ethnically diverse Mission District, La Cocina formed in 2005 after Caleb Zigas — now La Cocina’s executive director — and others recognized a need to formalize the businesses many women were already running illegally out of their homes. Several had actually filed city permits to run food businesses but, after running into a number of obstacles, never launched them.
An estimated 60 percent of restaurants fail in their first year .
Like other new-business owners, they face a saturated, cutthroat market, but low-income individuals lack the financial capital needed to open a restaurant, which can cost hundreds of thousands of dollars. But most importantly, they lack the social capital. Many are unaware of micro-loans or other resources, and they don’t have the tech savvy to research them online. For non-native English speakers, navigating contracts, permits and negotiations can be especially tough.
Aspiring chefs interested in joining La Cocina must submit a business plan and undergo a rigorous interview process. To make the cut, they need to show entrepreneurial spirit, low-income status — and of course, delectable food. Although La Cocina is flooded with applications, it admits only three businesses each quarter and currently hosts 41.
New trainees begin a six-month pre-incubation period, when they’re offered technical assistance on everything from logo design to recipe development. The business then becomes operational during the 2-to-5-year incubation period.
They continue to build their businesses until they outgrow La Cocina or become economically self-sufficient. So far, 15 businesses have graduated from La Cocina. Last March, Veronica Salazar opened El Huarache Loco, which serves bean-filled corn masa cakes. She now has 19 employees and made $1.2 million in sales in her first year.
A program like ours really recalibrates the opportunity index.
“A program like ours really recalibrates the opportunity index,” Zigas said. “You can say to the people who live in your city, ‘It’s hard but anybody can do it.’ That’s often not true because so many opportunities require wealth and capital. We try to eliminate that.” Business ownership can also boost social mobility and generate jobs when owners hire employees.
Since La Cocina opened its doors, scores of kitchen incubators have sprung up around the country, from New York City’s Hot Bread Kitchen to Salt Lake City’s Spice Kitchen . Thanks to the burgeoning foodie and social entrepreneurship movements, Spice Kitchen co-founder Natalie el-Deiry foresees even bigger growth in kitchen incubators. Moreover, incubator-grown eateries create cultural richness, which can attract prospective residents, who, in turn, attract more businesses to serve them. Such food businesses also bring diversity and authenticity to a trend-obsessed culinary landscape. “Our clients aren’t making cronuts,” Zigas said. “They’re making really legitimate tacos or Nepalese food. We want something sincerely cooked from great people.”
But Zigas cautions that an incubator is still a business — and a time- and cost-intensive one at that. “You can’t just open a kitchen incubator,” he said “You have to offer services to lower the cost of entry for everybody.” El-Deiry adds, “It’s really important for people to understand their local market and the viability for a kitchen incubator program.”
That shrewdness is one of the first lessons entrepreneurs learn at La Cocina. Many can’t wait to launch their businesses — until they learn more about what it really takes. Although Lugo is “worried,” she says La Cocina’s training has also boosted her confidence. “It feels good. It feels like something that I always wanted, the opportunity to bring food to the table and making a flavor take you somewhere, or back to your country.”
In a world of cronuts and kale shots, that’s something all our palates can appreciate.