Behind the success of DC’s unstoppable food incubator, Union Kitchen

Behind the success of DC’s unstoppable food incubator, Union Kitchen

Walking into Union Kitchen in NoMa on any given day, you never really know who or what you’re going to find.

The first commercial kitchen/incubator space in the District for growing food businesses has 7,300 square feet of space on two floors. Though the warehouse is somewhat purposefully nondescript on the outside, the interior lounge, with apartment-complex-like mailboxes and in-your-face red furniture, hits you hard with its individuality—this isn’t like other warehouse spaces you’ve been in.

A few steps into a maze of a hallway, and you might run into Jesse from Swizzler, hauling a huge bowl of potatoes he’s just hand-sliced for the next day’s side orders of French fries on the gourmet hot dog food truck. He has a narrow miss with another chef, wanting to get at the cookware crammed on the shelves that line the kitchen, and a third, who aims a large metal baking tray into a commercial-size sink complete with overhead, pull-down faucet. “Bustling” doesn’t even begin to describe the kitchen, where roughly 60 food startups rotate through, chopping, cooking, baking and prepping their wares for sale outside the building. There is serious food preparation going on here, and if you’re standing and talking, you’re clearly in the way.

A set of steep stairs leads up to the second floor, which sports a sunny conference room and a couple of glass-enclosed offices, where Union Kitchen cofounders Cullen Gilchrist and Jonas Singer manage the business aspects of the incubator—because Union Kitchen is, after all, a business, and as businesses go, it’s doing well.

Since Union Kitchen launched just over two years ago, it’s seen 120 businesses come through; fifteen have opened their own storefronts (think Flying Fish Coffee and Tea, TaKorean, RareSweets, and Ice Cream Jubilee). The companies have, according to Singer, collectively generated $40 million in revenue and created more than 350 jobs. In fact, the model of incubating food startups has proven so popular that other commercial kitchen incubators are opening across the city–and Union Kitchen itself is out of room.

Enter Union Kitchen Ivy City, a 15,000-square-foot warehouse in Ivy City set to open sometime this spring. The new space, which is again split over two floors, will house independent kitchens for some of Union Kitchen’s larger members, as well as a grocery/café space, storage space, and eventually, Singer explains, co-packing space to more easily facilitate manufacturing and distribution.

Being in an empty space means Union Kitchen can “built to suit, rather than reverse engineer,” says Singer. Union Kitchen itself currently has 20 employees handling facilities management and other logistics; Singer expects that number to double by early 2016.

“We’re tripling our square footage and doubling our membership,” Singer says. Union Kitchen will operate both the current NoMa and Ivy City locations, giving current members first pick in the new space.

The grocery/café space will give the businesses at Union Kitchen a chance to showcase what they make to the public. “We’ll have a coffee program, a beer/wine program and breakfast, lunch and dinner programs,” Singer says. “The idea is to come to Union Kitchen, make food, and put that food on a truck to distribute it,” whether that’s to current distribution partners like Whole Foods, Mom’s Organic Market, Yes! Organic Market, Glen’s Garden Market or in-house, to Union Kitchen’s own café (as well as its forthcoming “corner store” at 3rd and F NE). “We’re creating ‘businesses in a box’ with a guaranteed revenue stream.”

That “guaranteed revenue stream” also refers to Union Kitchen’s in-house catering business—a chance for Union Kitchen’s food startups to show off their wares and receive income. “We drove our businesses more cash through catering than they paid us in membership,” Singer says. “The trick is connecting the parts.”

When something like 95 percent of restaurants fail, “connecting the parts” is one reason Union Kitchen’s model is so successful. Singer also points to Blind Dog Café and Bakery, the café that Singer, Gilchrist and Noah Karesh permanently “pop up” during the day at Darnell’s Bar on Florida Ave in Northwest. “We have the good fortune to run Blind Dog,” Singer says. “We have had lots of opportunities to learn what works and to scale solutions of what works for our members.” For Singer, that means keeping both the “little and the big picture in mind: being strategic about hiring people and expanding into distribution, but also executing little details.”

Being first to market in the area didn’t hurt either. “We are the first ones to do it [have a commercial kitchen incubator in D.C.],” he says. “Doing it aggressively has paid off. We got a head start and got an infrastructure. We are driving cash to the businesses and saving cash. That’s the core of it.”

Meet a new Union Kitchen startup: Potomac Pastry

Potomac Pastry, a French pastry company baking macarons, croissants and kouign amann, among other treats, is one of the Union Kitchen’s newest members. Jamila, the company’s founder who is keeping her day job for now (and thus her last name anonymous), joined Union Kitchen in February 2015 after a brief stint at GG Kitchen in Kensington in mid-2014, and then a move to Mess Hall in November later that year. While still at Mess Hall, she joined Union Kitchen as an associate member in January 2015, meaning she had access to all of the people, distribution network and “organic relationships, but I had to produce elsewhere,” Jamila says. “I found that we were growing at such a pace, [Mess Hall] couldn’t find space for some of my equipment,” Jamila says. Full membership at Union Kitchen this month was the obvious answer.

Jamila got her start doing a pop-up for Zeke’s Coffee of D.C. When her pastries sold out, “John [Kepner, the owner of Zeke’s] said, ‘We need to make this an everyday thing, starting tomorrow,'” she says.

Potomac Pastry is now a wholesale supplier for both Zeke’s and Compass Coffee, and the business is growing thanks to a direct line of catering orders from Union Kitchen itself. “We’re experiencing incredible growth because of our connection to Union Kitchen,” Jamila says. “The caterer[ing business] at Union Kitchen wants to use our product when bidding for breakfast. Our macaron orders have increased in the last three or four weeks, just since becoming members.” That’s the cash pipeline that Singer talks about.

“My goal is to open a brick and mortar [storefront] eventually,” Jamila says. Being at Union Kitchen and having conversations with Singer and Cullen are helping her see the steps she has to take reach that goal. “I sat down with Jonas a week ago and we brainstormed a timeline, menu development, hiring, real estate, how to maintain the wholesale line of business. Because Jonas and Cullen have Blind Dog, they’ve been there. They own a bakery. They know the pitfalls. It’s nice to have the benefit of their experience.”

Though she doesn’t know who else is coming with her, Jamila is planning on moving Potomac Pastry to the new Ivy City location. “French pastries are finicky,” she explains. “[The new space] will [have better] temperature control, which will make it easier for me to work.”

Unlike her pastries, Jamila’s operation is lean. She is bootstrapped: “I don’t want to gamble with other people’s money,” she says. “I have two part-time employees now—a pastry assistant and a pastry sous-chef. If we get one more account, I’ll need to hire one more person.” Make that 351 jobs.

Out of Union Kitchen and into the Fryer: District Doughnut

Before opening their own storefront in July 2014, District Doughnut cofounders Christine Schaefer, Greg Menna and Juan Pablo Segura spent about 16 months at Union Kitchen working out the kinks for an artisanal gourmet doughnut business that literally started with a pastry chef frying doughnuts four-at-a-time in a wok in her sister’s kitchen. District Doughnut now sells approximately 1,000 doughnuts a day from its Barracks Row location.

The three cofounders formed their team in September 2012 and spent the next six months looking for a commercial kitchen space to house their doughnut-making operation. First, says Menna, they tried a small kitchen in Alexandria that “wasn’t even up to code. There was no grease venting. I thought, ‘Wow, this is a complicated business I’ve gotten myself into.'”

Menna says he bought a funnel cake fryer on Craigslist from “a guy in a shed” and took it back to this “disaster of a kitchen,” where Schaefer rigged a box fan to blow the fumes out of the window. Menna realized that this was not a long-term solution to their problems and the trio met with the owners of Spilled Milk Catering in Gaithersburg, where they produced doughnuts for three months. That space was fine, but the location proved challenging.

“Christine was delivering doughnuts [to me] at 3 a.m.,” Menna, who lives in Arlington, says. “It was the worst way of doing things.”

In April 2013, District Doughnut moved to Union Kitchen. One reason is its centrality. “All of our customers were in D.C.,” Menna says.

The business stayed at Union Kitchen until July 2014. “Union Kitchen enabled a launch-phase company to actually launch,” Menna says. “We were essentially proving the concept—to ourselves and to our investors. [They] provided the infrastructure for that. We were able to learn without [going] under financially.”

On the business side, Menna appreciates Union Kitchen’s help with marketing. “They got the word out about our brand, which got us ready for the next part of our vision—our storefront. Our goal was always to have our own store.”

District Doughnut’s storefront offers three regular flavors for sale daily and rotates different seasonal flavors through the shop. They provide doughnuts for Uncommon Grounds at Georgetown University and for Compass Coffee as well. The company also caters: “We’ve done a dozen weddings in the last few months,” Menna says, a concept they piloted while at Union Kitchen.

Union Kitchen NoMa and Union Kitchen Ivy City: the Future

Though the space in Ivy City may just look like roughed-in concrete walls and floors for now, Singer and Gilchrist have visions that transcend the physical. They pace the echoing floor, pointing out the location of the grocery/café, and in a minute are on the other side of the space, indicating independent kitchen stations. In physical build-out as in business, they both have long-term vision for what Union Kitchen is and will become.

“In food businesses, being financially sustainable is hard,” Singer says. “We still need to be focused on three years [down the road]. We’re going to be the last people standing, we hope, because we’re focused on the fundamentals. Food is about scale. How do you make local scalable?”

“We’re building on the model we have and making it more effective,” he continues. “We have a wide array of expertise and unique insight. We’re implementing systems and tools, and sharing [that implementation] with others…”

One pastry, doughnut, ice cream or hot dog shop at a time.

This article appeared in the Elevation DC, February 24, 2015
http://www.elevationdcmedia.com/features/unionkitchen_022415.aspx

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