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A kitchen incubator, also known as a culinary incubator, is a business incubator dedicated to early-stage catering, retail and wholesale food businesses. Kitchen incubators are mostly found in those countries with significant levels of food safety regulation where capital investment in commercial kitchen equipment can be prohibitive for a new business. By covering the capital cost of shared kitchen facilities which are lent on a timeslot basis to incubatees, the kitchen incubator enables a business to develop to the stage where it can invest in its own kitchen facilities.
Kitchen incubators share the wider business ideals operated within business incubators and will usually assist their tenants with business planning, access to finance, mentoring, and other business facilities.
By mitigating start-up costs and providing a nurturing environment, business incubators have successfully graduated over 87% of their firms and kept an astounding 84% of these thriving businesses within their local communities for years after graduation (The National Business Incubation Association). The culinary incubator, often referred to as a “shared-use commercial kitchen”, has taken a time-tested successful concept and swapped out office space for kitchens. They have opened to much acclaim, nurtured successful businesses and been embraced by their communities.
The concept relies on the fact that FDA and state regulation prohibit the sale of food that is not produced in a licensed facility. Culinary start-ups are unlikely to receive venture capital or bank financing, as profit margins are too slim and volatile for such a highly competitive market. Food products must be tested and tweaked over time before they are economically viable. Even once proven viable, the entrepreneur must navigate a complex network of regulation, packaging and distribution before running a profitable enterprise. This entrepreneur often lacks a business background and an understanding of what is involved in the start-up process. A study of individual demand for kitchen rentals reveals that start-up costs and licensing complications are the two main deterrents to opening a private kitchen. Availability and reliability are listed as the two major deterrents for aspiring entrepreneurs.
Kitchen incubators are likely to be used by the following end-users:
- Start-up food businesses in need of their first facility
- Home-based businesses that wish to legalize and grow their operation
- Established businesses relying on one-off or difficult situation kitchen rentals
- Established businesses looking to grow or reach a new market
These businesses include caterers, personal chefs, bakers, street venders, cake decorators and producers of specialty food items such as condiments and candies.