Are Kitchen Incubators a Viable Business?

Posted on: 23 August 2017


As local food movement gains traction, rental kitchens or kitchen incubators are on the rise as a way to support local food business ventures. Rental kitchens offer low-cost access to licensed kitchens and professional-grade equipment like commercial ovens, and connections with suppliers and customers. And most rental kitchens keep the chefs viable in business by assisting with branding, distribution, and sales.

Kitchen incubators are geared for food startups. These food startups are suitable for imminent chefs and bakers starting to invest into their own food businesses, for example, restaurants, bakeries, or ice cream shops. The idea of rental kitchens or kitchen incubators as they are also known is technically an untenured one.

How Well Do Kitchen Incubators Profit an Entrepreneur?

Even though kitchen incubators offer distinct benefits to entrepreneurs, operating one requires more effort than just assembling kitchen utilities and facility and opening it for business. Their main sources of income are rentals and storage fee. In addition, kitchen incubators also offer a catering program and rents kitchen space at higher prices to corporate clients.

Looking at differing minor views from some investors in the industry, they are of the opinion that the high operating costs of food incubators overshadow their economic benefit. According to a research done in 2007 done by Nuestra Culinary Ventures incubator in Boston, some of the businesses can't profit enough to support their workforce remuneration.

What Does Kitchen Incubators Mean for Commercial Real Estate?

Since kitchen incubators are still in the developing stage, providing accurate results will need some time in the oven. But there are some accurate information by Econsult Solutions showing that kitchen incubators will continue to grow in an upward trend, offering hope to commercial property investors and developers. Econsult Solutions, through its up-to-date report, showed kitchen incubators create more job opportunities and foster business innovations, which is not too bad for a concept that's still developing.

Kitchen Incubators Create New Opportunities for CRE Developers and Landlords as Well

According to ESI's U.S. Incubators, 68% of incubators rent space to users by the hour. 77% of facilities have fewer than three full-time employees, which is a start-up staple. A solid 86% of incubators are open for businesses at all hours.

Kitchen incubators are promising spaces for potential food professionals and cookery aspirants to horn their skills, and attract investment from home kitchen appliance companies as well. Kitchen incubators provide startups with commercial equipment to easily venture into the business.

We saw high-tech companies sharing workspaces with medium tech start-ups, the same way we are seeing that road being followed in the food industry. Though restaurants have been known to lease out their kitchens after closing, food professionals are starting to embrace their independence more and more.

Contact a company like Ian Boer Refrigeration for more information and assistance.