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By Kaylen Auer
PBN Web Editor
By Kaylen Auer
PBN Web Editor
Lisa Raiola is the founder of Hope & Main, Rhode Island’s first food-business incubator, which will open in the summer after construction is completed on the 17,500-square-foot incubation center in Warren. Raiola spoke with Providence Business News about her plans for Hope & Main and how the incubator will contribute to Rhode Island’s culinary culture.
PBN: Hope & Main won’t officially open until the summer, but you’re already accepting applications. What level of interest have local food startups shown in the program, and how many prospective members do you have so far?
RAIOLA: There was substantial interest from more than 250 prospective businesses, mostly in Rhode Island and southern New England, even before we began accepting formal applications in the fall. In fact, we used this data to substantiate the pent-up demand for a full-service culinary business incubator when talking to prospective funders, and the U.S. Department of Agriculture found our case to be compelling enough to offer Hope & Main a $3 million loan. At this point we can accept up to 50 businesses, and we are about one-third full with applicants representing a remarkably broad range of food-business ideas.
PBN: What inspired you to create the state’s first food-business incubator?
RAIOLA: There are 135 food-business incubators around the country, yet none in Rhode Island. This type of infrastructure is almost conspicuous by its absence here! We are a state that only consumes 1 percent of what we cultivate on our land and catch in our waters. We are home to Johnson & Wales University, one of the country’s premier culinary schools. Hospitality and tourism supports 66,000 jobs, and agriculture has grown 42 percent in five years. The food business is a natural focus for Rhode Island, but there are few platforms for startups. This facility fills a well-defined gap that will provide an affordable/accessible resource to enable small food entrepreneurs to jump-start businesses, and help small-scale farmers and fisherman to add value to raw product. In short, Hope & Main represents a critical missing link in Rhode Island’s food chain.
PBN: What challenges do food entrepreneurs face that other startup founders might not, and how will Hope & Main help address those challenges?
RAIOLA: Let’s compare developing a mobile app for new mothers with developing a line of organic baby food. The app could conceivably be developed in someone’s garage with a few computers and several tech-savvy collaborators over the course of six months. Moms everywhere can test the app without facing health risks, or even buying the product, and provide reasonable feedback to the developer. The tech entrepreneur may even get lucky and sell the app to Microsoft or Facebook!
The brave soul who wants to market a line of organic baby food is about to face all sorts of challenges. This person will first need to prepare the product in a code-compliant environment, because it is not legal in Rhode Island to cook and sell a product from one’s kitchen. The entrepreneur must also obtain his or her food safety manager’s license as well as liability insurance. This is before any mother or her baby samples a single serving.
The person will also face issues of sourcing raw, traceable ingredients of consistent quality and price year-round. There will be packaging and labeling issues as well as decisions regarding unit pricing, shelf-life and transportation. Then the product will likely have to scale across different distribution channels beginning with small markets or independent grocers to super-markets that will require distribution contracts.
The process of scaling up and getting it right with a food product – even to the point of a small, sustainable business – takes several years, an expensive processing environment required by law, and a relatively complex set of issues to navigate. So Hope & Main is not just providing the commercial equipment; we are also providing the specialized business guidance that these companies will need to succeed.
PBN: Will the ambiance of the Hope & Main space be more like a restaurant kitchen or more like a business office, or will it be an amalgam of both?
RAIOLA: Hope & Main will feel like a maker space, only for food. A restaurant kitchen comprises a single team pumping out a fixed menu of products. It’s about efficiency and service. A business office is a collection of companies, where the owner is trying to maximize rent. Hope & Main is creation space, but an environment that emulates the requirement each food business will face as an independent operator. So it is necessarily a community where every participant must respect the rules of the road, while pursuing his or her individual creative vision. In the application and selection process, we are emphasizing the fact that we are building a community of peer collaborators.
PBN: How will Hope & Main contribute to Rhode Island's culinary culture and economic development?
RAIOLA: Our jobs model, required for the USDA Community Facilities Loan, predicts that over a three-year period Hope & Main will generate 99 direct jobs and 236 indirect jobs. This is the multiplier effect of the food-processing business. If a farmer in South County grows tomatoes, and a business at Hope & Main makes pasta sauce, and a grocer in Portsmouth sells the product on her shelves, a dollar just changed hands three times in Rhode Island. Food is an engine of smart economic growth for Rhode Island with the potential of employing some of the workforce that is chronically unemployed here.
Hope & Main will mean “made in Rhode Island” and we think this, by itself, adds value. With this new facility comes an incredible range of new product possibilities, particularly in a state where the local food movement is defined by a diverse marketplace of enterprising farmers and fisherman, ethnic culinary culture and eco-artisans that are anxious to test ideas and create the next break-out food startup.