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.
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Business model
There are three kinds of business models practiced in a shared kitchen environment. Shared use kitchens, incubator kitchens and food accelerators.
Shared use kitchens are "used as a place of business for the exclusive purpose of providing commercial space and equipment to multiple individuals or business entities which commercially prepare or handle food that will be offered for sale".
Incubator kitchens offer "supportive services for entrepreneurs" and "an incubator can be further differentiated from an accelerator by the fact that an incubator is focused on new and very early-stage businesses, whereas an accelerator is focused on established businesses looking to move on to a more robust stage of business development."
By mitigating start-up costs and providing a nurturing environment, business incubators help firms grow and stay in their communities. The culinary incubator has taken a time-tested successful concept and swapped out office space for kitchens. Between August 2013 and March 2016, the number of kitchen incubators increased by more than 50% to over 200 facilities.
All three business models rely 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. Start-up costs in the food space are high and can range, as of 2013, from $15,000 to $100,000.
Targeted markets
Kitchen incubators are likely to be used by the following end-users:
These businesses include caterers, food trucks, prepared meal services, personal chefs, bakers, street vendors, cake decorators and producers of specialty food items such as condiments and candies.
List of kitchen incubators
The following is an incomplete list of notable companies well known as kitchen incubators: