Module 3 food incubators business operations

1. This programme has been funded with support from the
European Commission
Module 3 - Food
Incubator Business
Operations

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In this module, learners will learn the nuts and
bolts of running a food incubator.
It covers:-
3.1 Creating a community
3.2 Managing an incubator
3.3 Licensing models for operators
3.4 Kitchen management protocols
3.5 Adding value to your incubators –
additional services
"The European Commission support for the production of this publication does not constitute an
endorsement of the contents which reflects the views only of the authors, and the Commission cannot be
held responsi­ble for any use which may be made of the information contained therein."

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3.1 Creating a community

4. Obviously, a food incubator’s physical facilities and
services (basic and advanced) are critical to an
incubator’s success, but creating an entrepreneurial
community atmosphere is an essential ingredient. There
are two elements drive the atmosphere:-
•Nurture a Culture of Collaboration. Aim to create a
dynamic environment that fosters lots of adhoc and pre-
arranged networking, spontaneous conversations and
innovation. Sharing equipment, helping each other tackle
problems, introducing sales and leads and even product
development leads to powerful results
•Entrepreneurial Leadership. The incubator is an
economic powerhouse of food innovation and job creation
– share your vision of why and how it is working hard to
be a leader of food entrepreneurship

5. Creating a culture within the incubator can be
advanced through some simple tactics:-
• A welcoming environment – some incubators no
longer use the term “tenant” preferring the terms
“membership” and “members” which implies being
part of a collective of like minded people and brands
with similar objectives.
• Provide a language guide which deciphers the
terminology used in the incubator and a welcome
guide for non native members
• Prominently display and consistently reinforce your
Mission Statement
• Share incubator wins – celebrate success of your
members both internally and externally through the
regional media. Be marketing savvy – See Module 4.

6. From Enquiry to Membership
The culture begins from that initial enquiry and how you
attract and convert quality enquiries. From enquiry to
membership, it is about creating that cultural ethos from
the get go. High value enquiries treated with priority as
seen in this Food Incubator low chart on dealing with
initial enquiries.
RESOURCES
DOWNLOAD OUR
RESOURCES PACK
WITH EMAIL AND
INFORMATION
TEMPLATES TO
HANDLE
ENQURIES FROM
ENQUIRY TO
MEMBERSHIP

8. Some kitchens require tenants to have a business plan,
and might provide assistance in creating or developing
one. This is more common for incubator‐ type kitchens
which focus on developing businesses and entrepreneurs.
Most kitchens have a mandatory training session with
new tenants so that they learn about the rules and
regulations of the kitchen.

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3.2 Managing an Incubator

10. The general management of a food incubator requires
organizing, overseeing, and directing the facility’s day-to-
day operations. Management typically combines duties
from other roles, including stimulating initial sales
contacts for the food incubator and working through
customer enquiries which can take considerable time from
enquiry to lease/user agreement.
The function of Manager may have many titles, e.g. –
Business Development Manager, but they role needs to
encompass many facets including:
•Member Coordination - an essential role in the operation
of a food incubator. In the case of shared use, this would
include scheduling and operations supervision.

11. • Food Safety Oversight Depending on what food
safety certifications the food incubator intends to
acquire, this role entails maintaining compliance,
including records and plans, as well as readying the
incubator for any audits or inspections included in
acquiring the certifications.
• Marketing Devising and implementing a consistent
high impact marketing campaign and carrying out
various marketing activities related to community
awareness or attracting more tenants/users. See
Module 4.
• Financial Oversight Much like any other business
entity, proper tracking information management can
provide key information for managerial decisions.

13. Checklist of Key Management Functions
Big Picture
New Opportunities
Sponsorships
Strategic partnerships
Financing/fundraising/grants
Consulting
Government relations
Overseeing Membership and
Commerce
Public appearances
Language Consistency
HR and team building
Membership
Creating a Pipeline of Potential
New Members (both recruiting and
responding)
Screening, On-Boarding, and
Orienting New Members
Management of Current Members
Creation & Implementation of
Kitchen Policies
Alumni Relations
Sales Relations/Partnerships
Culture Building/Maintenance

14. Other Key Roles
For shared use incubators, the role of the kitchen
stewart is critical. They are responsible for the
cleanliness, food safety and workplace safety of the
incubator. Their role is focused on details, executions,
cleanliness, safety and positive members interactions.
They should work to a daily check list and are trained on
repeated on a standard 8 hour shift. They must be able
to be self directed and also ready to assist members with
unexpected events that occur.
In addition to being detailed orientated in their cleaning
and safety environment, as the daily interface with
members, they need great interpersonal and customer
service skills.

16. Example
of Daily
Walk
Through

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3.3 Rental and Licensing Models
for Operators

18. As explored in Module 2, different formats of food
incubators require different approaches to tenancy and
tenancy agreements.
1Multi tenant food processing centres
Given the level of investment the tenant/member has to
make in customising their own unit, a formal lease of
circa 5 years (4 years 9 months in many cases) is a
typical time period for a first tenure.
This gives security and medium term certainty to the
tenant to make that investment and see a return from
same. For this reason, food is not like any other sector
enterprise centre.

20. 2 Shared Use Food/ Kitchen Incubators
It is important to create a variety of packages to suit
different member needs. From casual use to fixed
arrangements (e.g. one, two or three day a week passes),
your timetabling need to be flexible and fair. Also offer
24-7 access where possible.
In Module 2, we looked at 3 different business models
and fee formats that can apply to Shared Use Food/
Kitchen Incubators.
1. Hourly fee
charge only for
time used
2. A basic
monthly fee +
per use charge
3. Blanket fee
that covers all
usage

21. Spotlight on Pricing Strategy of Newmarket Kitchen, Ireland

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3.4 Kitchen Management Protocols
These apply more to shared use incubators.

23. Food Safety
Of absolute and critical importance, establishing robust
systems and protocols are a MUST from the outset – for
everybody’s sake. Recall the concerns of potential
tenants in Newmarket Kitchen’s initial research- cross
contamination and cleanliness concerns were much
greater than cost concerns.
Hence a facility Safety Management System is critical
and professional advice should be sought in setting this
up.
Source: Market Research Findings – Smurfit Business School

24. Food Safety
One of the first steps to starting a shared-use
incubator is connecting with the local Food Safety
and Health Inspector. In addition to food safety, the
incubator also has to comply with local building and
fire safety regulations, the implications of which and
adjustments necessary to comply with regulations
should be taken into account in the feasibility study.

25. New Members – what you need from same?

26. As important as the system, the training members receive in
same. We mentioned Orientation Training for new members
and food safety there is critical. Do not assume that all
members will know this information. This should include:-
•The WHY of food safety - Cross-contamination avoidance and high
standards need to be monitored and controlled
•Regulations and Standards – just some of the regulations yoy
need to be fully au fait with
o Regulation (EC) No 852/2004, requires food producers to
inform their official agency across a range of factors including
premises
o Traceability, under Regulations (EC) No 178/2002 means “the
ability to trace and follow a food, ……., through all stages of
production, processing and distribution“.
o Regulation (EC) No 1935/2004 concerning materials and
articles intended to come into contact with food
o Regulation (EC) No 852/2004 regarding the training required by
food handlers

27. • Food Safety Management System/HACCP plans explained
Our resources download exercise that follows provides a Food
Safety Management System that was kindly shared by
Newmarket Kitchen Ireland
• Training
• On-line and classroom courses (e.g. chemicals/manual
handling/)
• Continuous professional development
• Records
• Orientation on cleaning and emergencies

28. Managing the Kitchen Incubator
Involves constant checklists !
• Checklists for everything from cleaning to temperature
logs to activities to preventative maintenance
• Daily walk-throughs
• Roll calls – important to ensure you know everyone’s
storage requirements regularly check
• Daily task templates
• Cleaning logs –
toilets/HVAC/general/equipment/fridge/ freezer/blast
chiller etc
• Equipment logs – calibration and temperature
• Sick policy – any displays of sickness not allowed in
kitchen and individual has to be removed immediately
• Visitor logs
• Preventative maintenance checklist
• Kitchen and facility signage – helps with culture
creation

29. Pre Membership Preparation and New Member
Orientation and is a very important step. Use this
checklist to guide you through what the orientation needs
to cover and information to be collected.

30. Many incubator find it useful to create a video covering
preparatory and clean-up processes.
For shared use incubators, depending on how familiar
clients are with commercial equipment, there may be a
period of induction where staff may also work with them
the first time they use the kitchen, and be on hand to
help if needed in the initial period.
Also Member Meetings are important:-
– This is an integral part of kitchen management
– It reinforces the shared environment ethos that ‘fences
make for bad neighbours’
– It ensures all members are aligned in the same objectives
of operating in a clean high standard kitchen
– It ensures the burden for cleaning does not rely solely on
the incubator operator to manage

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3.5 Adding value to your incubator –
additional services

33. Value Added
Adding value to the member’s experience within the incubator,
not only builds stronger member businesses but some can also
create additional income for your incubator.
Shared Purchasing/Group Buying
Harnessing the buying power of many different food businesses
can be exploited to get better rates for members for everything
from legal to branding and marketing, bulk ingredients,
transport and distribution and even banking.
Shared Co-Packing
An incubator can help entrepreneurs access both packaging
equipment or build relationships with reliable and affordable
co-packers.

34. Distribution
Distribution can often be the biggest challenge facing
any food producer. Breaking down the seemingly
daunting barriers that create challenges can be done
collectively within an incubator.
Incubators may provide connection to small-scale
distributors, or even invest in a distribution co-
operative, where users share refrigerated trucks.
In any scenario, it is important that the incubator
assist entrepreneurs with determining the most
efficient and cost effective route, and helping them take
that step.
An example …

35. – Incubator plays a sales and shared marketing role.
Identifying and inviting potential buyers (the “market”) in
to the incubator to meet producers scheduled for an
allocated timeslot with the buyer.
– Benefits to the buyer – one sales contact – one delivery
– Incubator makes sales, collects orders. Relays same
back to member
– Incubator driver picks up member’s product from
incubator
• Delivers directly to retailers, others
• Refrigerated van ensures maintained temperatures
• If something happens in transit, incubator assumes
liability
• Pricing xx% of wholesale price paid to incubator.
Travel expenses included

36. Selling the concept to the members
Benefits of the incubator’s distribution model:
Without With

37. Other income sources
Consultancy – a food incubator nurtures new food
entrepreneurship. The expertise gained through
running a food incubator is hugely valuable. Hence,
once up and running consider sharing your expertise
as a consultant or trainer