The Mentor Capital Network interviewed Davita Louie, Director of Development for Union Kitchen, and a participant in the Mentor Capital Network’s 2016 Spring Cohort, on April 15, 2016.
Union Kitchen is a food incubator in Washington, DC, that strives to build a food system which is profitable, just and sustainable. Jonas Singer and Cullen Gilchrist founded it in 2012 when they realized that they needed commercial kitchen space to increase the production of their chocolate chip cookies at The Blind Dog Café. Below, Davita discusses the motivation behind Union Kitchen, its journey so far, and gives us a little sneak peek into their future plans.
Let’s start by better understanding the problem Union Kitchen is helping to solve and how you’re doing that.
Union Kitchen is trying to solve the problem of income disparity in the Greater DC Metropolitan area by creating a larger distribution of economic wealth and creating an entrepreneurial middle class. We do this by lowering the barriers to entry for food manufacturers in the DMV area.
We provide commercial kitchen space for these businesses to start. Members pay a monthly membership fee and we take care of everything: kitchen cleaning, facility and equipment maintenance, distribution and even commitments with the Department of Health. When they become a part of Union Kitchen they can really just focus on the things that matter most to them: their product, their customers, and their employees.
In addition to that we provide them with revenues through our other lines of business. We essentially support them to get their products to market, which is one of the biggest challenges for food manufacturers. Union Kitchen has in-house catering, and recently we opened our retail grocery that gives us direct power to get their products onto shelves. Our distribution services help them reach all over the DMV area; our members have products at over 70 retailers including Whole Foods, Glen’s Garden Market, and MOM’s Organic.
What do you think was the hardest part of getting Union Kitchen up and running?
Initially the challenge was coming up with the finances to open the business and creating the culture and the market around it. We are big believers in culture building and what we are doing is a unique concept. Sometimes it’s hard to explain that we don’t schedule hours for our businesses in the central shared kitchen for example.
Another challenge was figuring out the needs of our members. Every strategic decision we make goes back to how we can provide more value to our members, actually paying attention to that was how we started the distribution service.
How many members did you have when you started?
Essentially the founders of Union Kitchen were the first members, after that, we consistently obtained more members every single month and we were almost full by month 6, when we had 45 members.
Operating out of our two facilities now, totaling 23,000 sq. ft. of production space, we have about 75 members, however we work with over 180 businesses that includes current members and alumni members.
So even if the business moved out of the Union Kitchen space, can they still access the services that you provide such as distribution?
Exactly. A lot of times members who move out to start their own platform choose to continue using our distribution services. Many alumni Members who have opened brick and mortar locations still continue to use Union Kitchen Distribution. We have an ongoing relationship with all of our alumni, whether through Distribution or over social media, we support them and stay connected.
What would Union Kitchen do if you had more time?
More local sourcing is definitely something we want to focus on. The challenge with that is that we are in the District of Columbia, so we are geographically not too close to the farmers. We are considering some solutions, for example can we just find better local sourcing channels? Can we do urban farming? Or do we go out there (to the farmers) and do it ourselves, which is something we need more human capital for.
Another thing is building up our nonprofit initiative that aims to provide services for our members and their employees, such as childcare facilities, housing services and transportation. This is part of our mission to improve access to employment and generally reduce all of the barriers to employment and employee retention. Also if we had more time, we want to offer more customized services to cater to our member’s needs.
How many people does Union Kitchen employ?
We have a team of maybe 47; this includes our kitchen stewards as well as our grocery team. We have 17 people running our various departments on the corporate side.
Where does Union Kitchen need more support?
I think in general the biggest challenge is how do we scale without getting crushed by the weight of it. Especially with the transition of going from 5 to 50 employees, how do we keep everyone in the loop, codify our systems and yet maintain our culture.
Moreover, finding the most efficient ways to use our resources is definitely an area where there is room for improvement. To explain this a little bit better, we realized we needed to split up our internal and external roles. For example, at the moment our finance team does financials for Union Kitchen as well as consults our members on financials, loans, etc.
One of the things we like to think through with our social entrepreneurs is the distinction between customers and beneficiaries. Customers pay for the service and beneficiaries are those whose lives are made better because you exist. Who would you identify as your beneficiaries?
Whether directly or indirectly, we create jobs and professional development opportunities. In the last three years, we were able to help employ over 450 people. The beneficiaries are also the families of our members, because if those folks are getting jobs they are in a better position to support their children or dependents.
Do you have plans to expand Union Kitchen nationally or even internationally?
We license out the Union Kitchen model in other communities, and we now have about ten partners in Omaha, Louisville and London amongst other places.
Licensing is similar to franchising, but a lot less restrictive. Our partners don’t have to use our name or the brand. They are the on the ground operators who are going to make the big decisions. We created a dynamic partnership dashboard that partners have access to 24/7 and they can find all of our intellectual property on there including, how we recruit members, staffing and employment systems, latest news etc. We essentially consult for our licensees, sometimes conducting site visits, and they can come to our kitchen to do training sessions or just for shadow days.
Is there a specific reason for choosing not to franchise?
Union kitchen is all about community development. The ‘union’ in our name, we chose because of the Union station area and that resonates with residents of DC, however might not with someone in Omaha or London. We don’t want to lose this element of connection with the community. Again, it is also less restrictive and we want our partners to be able to quickly make decisions.
What plans do you have for Union Kitchen for the next 5 years?
We are in so many lines of business and there are so many different kinds of opportunities. The biggest piece is definitely distribution, it has taken off and we are looking to take it to a national scale. We are in talks now hoping to partner with others on the East Coast and our aim is to bring DC products to the national market.
We want to continue licensing our model, not just in the US but around the world. My department talks to people every single day, including folks from South Korea, Japan, Mexico and Australia. The Union Kitchen model is definitely transferable and we want to see this approach of economic development in other communities.
How are you measuring the impact of Union Kitchen, are you following certain processes for that?
We are currently working on how to efficiently track data, putting together specific metrics and data collection processes to assess our impact. We know job creation and promoting local food is a big part of it, but we want to track our impact more consistently.
How has Mentor Capital Network been helpful to you?
It was definitely useful to put to paper a formalized business plan. The feedback has affirmed our ideas in a lot of ways. Overall, I think it’s a positive experience.