As I’m handed a pea green waffle, I’m reminded a little bit of Dr. Seuss. The warm, toasted pastry is almost savory, with a delicate sweetness, and Blanca Madriz, who co-owns the Green Waffle with her husband Martin, explains that it contains just five ingredients: egg whites, oats, banana, and spinach, with additions of either blueberry, yam or cauliflower.
“They can be eaten as breakfast waffles with honey and fresh fruit,” she explains. “They can also be eaten as sandwiches with egg and cheese, regular cold cut meats, or vegetarian. We have even made green waffle pizza.”
Madriz and her husband launched their business just a few months ago, but it almost didn’t get off the ground.
“Neither of us had any experience in starting a business or in the food industry, we just knew we had an idea we truly believed in. In the beginning, we got our own location, but it did not pass the city inspection. We thought that was it, that it was over, because we were out of all the money we had to invest. We did not have
very much to begin with.”
Luckily, a friend recommended they check out the incubator in Watsonville, where they live. Martin rushed to their office and filled out an application the same day. Now, nine months later, their product is available in four locations, including Staff of Life in Santa Cruz and Aptos Natural Foods.
“We think that if the Kitchen Incubator did not exist we would not be in business right now,” says Bianca. “We would either have abandoned the idea all together or be working to save up money to reinvest, which would have taken a long time.”
Start Me Up
Since its launch three years ago, the Kitchen Incubator program has nurtured at least 30 food start-ups. As the newest incubator program from the El Pájaro Commercial Development Corporation (CDC), a nonprofit based in Watsonville, its goal is to help underserved entrepreneurs in Santa Cruz, Monterey and San Benito counties by lowering the costs of their initial investments and providing them with technical training. Entrepreneurs apply to share a commercial kitchen facility for $10 to $30 an hour, depending on their equipment and energy needs, which significantly lowers their start-up costs by tens of thousands of dollars by removing the need to rent or build their own kitchen.
The CDC also offers a 13-week technical assistance program to applicants, where they work with consultants to put together a business plan, figure out which federal entities will oversee their production, and obtain a ServSafe certification and the correct permits.
“That’s a big part of what we do,” explains Cesario Ruiz, who manages the Kitchen Incubator and works closely with all of its start-up clients. “We bring in new people who want to use the facility, and often times they don’t even know where to start. Once we collect those documents—business plan, the identity of the proper entity that’s overseeing them, and ServSafe—then we move into local permits, insurance for your business and obtaining a business license from the City of Watsonville.”
Only after all of this initial training, which takes three to six months, do clients finally move into the Kitchen Incubator, which sometimes poses its own set of challenges for new entrepreneurs, many of whom have never worked in a commercial kitchen before. “Some people come in with experience and they don’t take very much time,” explains Ruiz. “Others have no idea how to use a commercial oven or commercial stove.”
The need for a commercial kitchen space had been apparent to the CDC for more than a decade. Of the 200 or so clients that visited the CDC every year, at least 40 percent of them wanted to start a food business, but were prohibited from doing so due to lack of start-up capital and commercial space. According to labor statistics from the Employment Development Department of California, at 10.9 percent Watsonville has the highest unemployment rate in Santa Cruz County, more than double the national average of 5.4 percent. By opening the Kitchen Incubator, the CDC hoped to provide support for potential entrepreneurs, who would create new businesses and jobs to build on the strong food and farming traditions in the region.
The number of kitchen incubator programs, both nonprofit and for-profit, has grown enormously nationwide over the last decade, from virtually none to more than 200, due to booming demand from “foodpreneurs” and a call from consumers for local, fresh, artisanal products. As the CDC began to take concrete steps toward bringing a Kitchen Incubator to Watsonville, they worked closely with La Cocina Kitchen Incubator in San Francisco, operating since 2005, which follows a similar business model. Early reports on this new trending industry show that incubators that provide business training, as the Watsonville Incubator does, are much more likely to succeed by ensuring the success of their clients.
Carmen Herrera, executive director of the CDC, says business training is essential for many of the entrepreneurs they work with.
“I love what I’m doing because I see a huge change in the food industry in the area, and I want to be a part of that future,” says Ruiz. “Yes, we hear bad news, sad news, coming out of Watsonville, but that’s not the only thing that’s happening.”
“People have a dream, and sometimes they have savings, and it’s very important to us that they don’t invest their time and savings in something that they don’t understand,” explains Herrera. “Our clients don’t always know what kind of questions to ask, or what kind of due diligence is required to negotiate a business deal, and that’s the kind of thing we help people with. It takes so much effort before people are ready to apply for a loan, and to get a good interest rate, but the rate of success for people who receive this kind of assistance is much higher when they have received the kind of support we’ve offered to them, than when they haven’t.”
Cultural Shift
Ruiz, who recently won a local NEXTie award for Entrepreneur of the Year, is one of these success stories. In 2013, with 17 years in the food industry under his belt, including five years at Gayle’s Bakery & Rosticceria in Capitola and five years as a manager at New Leaf Community Markets, he left to launch his own product, My Mom’s Mole, a sustainably sourced mole powder based on his mother’s recipe.
After several fruitless weeks looking for a commercial kitchen, Ruiz was introduced to Herrera through a friend, who invited him to come look at the facility.
“When I come in here and she opened those doors, my jaw just dropped at how beautiful the kitchen was,” Ruiz says. “Everything was so shiny, sparkly, new … unopened boxes of cooking equipment were everywhere. It took me about 10 minutes to recover.”
Ruiz confesses that Herrera was alarmed that he had quit his job to start his business, which is something they never initially recommend to the clients who visit the CDC. “I thought it was going to be easier,” admits Ruiz. Herrera offered him a job on a part-time basis as manager of the facility while simultaneously running his mole business, and he started a week before the Kitchen Incubator opened. He’s been there ever since, and says he’s inspired daily by the work he does helping other entrepreneurs.
“I love what I’m doing because I see a huge change in the food industry in the area, and I want to be a part of that future,” says Ruiz. “Yes, we hear bad news, sad news, coming out of Watsonville, but that’s not the only thing that’s happening. We have so many community leaders who are committed to changing the culture and changing what we’re doing for the good of the community. I’d much rather be a part of that and focus on that to continue changing that vision that most people from North County have about Watsonville.”
Slow Cook
The Incubator was far from an instant success. Ruiz says that when the doors opened, they started with four or five clients, and it took about a year and a half to really get the word out about the new
facility. Those they did take on, however, had been practically pounding on their door to get in. One such client was Vicente Quintana, who had been in desperate need of an affordable commercial kitchen in order to sustain his growing cactus business, El Nopalito Produce. Quintana was receiving his training from the CDC at the time, but without a commercial kitchen he wasn’t able to obtain any of the permits needed to legitimize his business. Although his product had been steadily gaining a client base, until the Kitchen Incubator opened everything had been under the table.
Ruiz translates for Quintana, who emigrated from Mexico and moved to Watsonville in 2009: “Technically, it wasn’t OK, but what was he going to do? He couldn’t go back to the fields, the work was too difficult for him, and he had a family to feed. That was the easiest solution at the moment. But once his competition saw him coming into the markets, they knew who he was and started to call the police on him. Every time he went to make a delivery, he would get pulled because the competition would call him out,” Ruiz says of Quintana’s struggle to get his business off the ground.
Quintana scraped by for eight months before finally moving into the facility as soon as it opened in 2013. Now, his business produces 7,000-8,000 pounds of cactus out of the Kitchen Incubator every week and supports six full-time employees. His cactus—which is trimmed, peeled and cut by hand to preserve, as he says, “the integrity of the cactus”—is available in more than 30 markets from Salinas to the Bay Area.
Quintana admits that without the availability of the Kitchen Incubator as a resource, it’s likely that he wouldn’t have been able to reach this level of success. With the federal officials pursuing him, it was only a matter of time before he faced a huge violation write-up that would have prevented him from selling again.
Besides enabling him to support his family and employees, Ruiz adds that Quintana’s business has helped local cactus farmers, as well. “There is a cactus farmer in Los Banos who has six acres of cactus. This farmer used to take four or five cases of cactus to sell at farmers markets, and sometimes he’d have to return it all to the farm. Last year, Vicente bought all of his production, about a hundred cases a week, and it’s generating a positive impact in that community,” Ruiz says. “So, you kind of see how the good intentions just keep rolling and affecting people in a positive way.”
It’s also clear from stories like Quintana’s why the Health Department is a big supporter of the Kitchen Incubator, and refers clients to them who are working under the table. “They love the facility and the way we take care of clients, because we’re trying to take businesses out of the shadows who are risking people’s health by producing in a way that they shouldn’t be producing,” says Ruiz.
Community Kitchen
While the training entrepreneurs receive is key to the success of their fledgling businesses, participants in the program say that working in a shared facility has other benefits. Newcomers Amanda Pargh and Chase Atkins, owners of Burn Hot Sauce, started working out of the Kitchen Incubator just a few months ago and were thrilled at the support they found from the other participants.
“Being in such a large facility has really given us the growing room we didn’t even know we would need.”
“It’s an honor to be in there because you’re surrounded by such good vibes. It’s not like you’re in another hardcore kitchen where no one talks to each other; it’s a really good community,” says Atkins. “They are some of the most unique and inspiring people because they’ve been through it all—breaking the glass, flooding the kitchen …” “Everyone is willing to help each other. If you’re going through something, someone will say, ‘I just went through that. Here’s what I did.’ It’s really nice,” adds Pargh.
Missy Woolstenhulme, who co-owns Kitchen Witch Bone Broth with partners Magali Brecke and Rhiannon Henry, says she shudders at the thought of where their business would be without the incubator, which they have been using for the past two years. The CDC agreed to let them bring in a large steam kettle, which takes up valuable kitchen space but has allowed them to greatly expand their business. “They have been instrumental in our growth in countless ways. Carmen has always been open to helping us grow by allowing us to purchase and bring in our own equipment and renting us more space when we have needed it,” says Woolstenhulme. “And Cesario is one of the most genuinely helpful and awesome human beings you can meet. He has always had advice to help us learn and grow into the food industry and when we have stumped him on a question, he goes looking for the answer.”
Kitchen Witch Bone Broth has gone from producing about 150 jars of their nutrient-rich broth every two weeks to nearly five times that every week since their early days at the Incubator. Says co-owner Henry, “Being in such a large facility has really given us the growing room we didn’t even know we would need.”
The value of the interpersonal resources at the Kitchen Incubator isn’t lost on Herrera, who says, “The facility is amazing, it’s beautiful, but at the end of the day the thing that makes the big difference from other commercial kitchens is the amount of support that people get when they’re accepted to the program. It happens formally, through our programs and assistance, but also organically when they share knowledge and ideas with each other. It’s a community.”
Packing Up
The next step for the Kitchen Incubator is to install co-packing services. Currently, all of the businesses operating out of the Kitchen are packaging by hand, which impedes their ability to expand. “For many of our clients, they have a great product and are showing amazing growth, but they won’t be able to support themselves full time unless they sell a lot more, and the only way to do that is to package differently,” explains Herrera. “We don’t want to start making businesses that are just going to go away because they want to expand, you know?”
Local farmers would also benefit from access to a facility that would allow them to make “value added” products like jams, sauces, and pickles from leftover produce and sell them at farmers markets instead of returning the unused produce to their fields.
Currently there are no co-packing facilities for small businesses in Santa Cruz County, and Herrera has heard of farmers exporting their co-packing out of state in order to find a more affordable option. “There are many people that will benefit from this and we’ll attract other people. It will create jobs, because the lines have to be managed by people that we’ll hire. It’s a win-win for everybody,” says Herrera. The preliminary design for the co-packing facility is already in place, with plans to open in early fall.
Herrera’s experiences growing up helped to shape her belief in the long-term benefits of nurturing successful small businesses. Her mother and father opened a bakery in Mexico 53 years ago, which her sister runs today. “If my parents struggled at the beginning, they did very well later. Because of that business, everyone who wanted to was able to go to college,” says Herrera. “That’s also the vision that I have for our clients. Not only self-appointment, but that they’re able to build some assets for themselves, send their kids to college, buy a house … We have a quote that we sometimes say, ‘Believe in the transformational power of entrepreneurship.’ Because it does.”
