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The Spoon

Daily news and analysis about the food tech revolution

cottage food

DishDivvy Partners with DoorDash to Deliver Home-Cooked Meals

Today DishDivvy, an online marketplace for home-cooked meals, officially announced its integration with DoorDash to facilitate food deliveries. Previously, hungry folks who had purchased a meal from a home cook over DishDivvy’s platform had to go and pick up their homemade lasagna/spanikopita/pad thai themselves. Now they have the option to pay a mileage-based delivery fee to have it delivered directly to their door.

DishDivvy may have just officially announced the news, but CEO Ani Torosyan wrote to me today that the startup had been making deliveries with DoorDash since 2019. “We held off on announcing because we wanted to test the integration and really understand delivery when it comes to home kitchen operations,” she wrote. Since then she said that they have iterated on their integration, but wouldn’t reveal exact details.

The official news comes just a couple weeks after DishDivvy announced it would be expanding from its home state of California into Utah. Torosyan said that they hadn’t tested DoorDash delivery in all of Utah yet, but that as of now there is some coverage in the state. She added that third-party delivery of home-cooked food is completely legal in both California and Utah.

DoorDash’s costs for the home-cooked food are a bit pricey: $6 for delivery within a 3-mile radius. That might seem excessive when you could just zip over and pick it up for free. However, adding the delivery option allows DoorDash to reach a wider audience: those extremely strapped for time, people without access to a car, anyone who is mobility-challenged, or doesn’t want to leave the house, etc. etc.

It may seem like a relatively small step, but integrating with delivery shows that DishDivvy is serious about making the cottage food marketplace a legitimate food option available to all — not just a niche audience. Well, at least in those states that allow the sale of home-cooked food.

Will California’s AB-626 Bill Serve Home Cooks, Entrepreneurs, or Tech Giants?

When AB-626 (also known as the 2018 Homemade Food Operations Act) passed in California last year it ushered in the start of what we at The Spoon have started calling the Home Cook Economy. Now, home cooks in the Sunshine State are allowed to sell up to 60 meals a week and make up to $50,000 in annual revenue.

Yesterday the L.A. Times ran a story on the Home Food Economy in which author Frank Shyong argued that AB-626 is not, in fact, helping the immigrant and low-income cooks that it promised it would.

Shyong certainly makes some valid points — especially when it comes to immigrants and immigration officials — but I finished the piece feeling that we had some very differing views on what exactly AB-626 would look like.

First of all, Shyong seems to think that most home cooks who will take advantage of AB-626 are trying to start their own food business. To that end, he argues that the bill is too vague in its language about what constitutes a “meal,” and the 60 meals per week/ $50,000 annual revenue caps make it too difficult for entrepreneurs to actually make a living off of sales from homemade goods.

True. But the way I understood it, AB-626 was never meant to facilitate full-fledged cottage food businesses. Instead, it was intended to offer economic empowerment through supplementary income via home-cooked foods.

To confirm this I called up Ani Torosyan, founder of DishDivvy, a Glendale, CA-based company with a mobile app that connects consumers with pre-approved home cooks in their area. She also had a few issues with the L.A. Times article. “If you get anywhere close to $50,000 gross revenue… you really should be going to an industrialized kitchen,” she said.

In short, AB-626 is not for people who are looking to start a full-fledged food production business. It’s for home cooks that are looking for a little bit of extra money, or maybe want to dip their toe in the food business before they decide to ramp up production and rent out a commercial kitchen space.

Reading the piece, I was a little surprised by Shyong’s argument that more than any other party, AB-626 would end up benefiting tech giants. He predicts that the home-cook economy will quickly be dominated by tech giants like Uber who will step in to help home cooks — many of whom have no entrepreneurial experience of their own — do things like manage payments, market their product, and ensure last-mile delivery. In exchange for a percentage of their profits, of course.

I agree that tech companies will play a role in shaping the home-cooking industry — this day and age, it’s inevitable. In fact, it was a tech company who first paved the way for the home-cook economy. C.O.O.K. Alliance, a group founded by the now-defunct startup Josephine which was one of the first to give home cooks a platform from which to sell their food, was one of the primary advocates for AB-626. Even without an official marketplace, sites like Craigslist, Facebook, and even Nextdoor have served as platforms on which people can buy and sell homemade food.

But I don’t think that tech companies will destroy the heart and soul of the home-cook economy. And neither does The Spoon’s Michael Wolf.

Back in June he wrote a piece responding to a different L.A. Times article which took a similarly worried view about the opportunistic role that tech giants could play in the emerging home cook economy. Wolf argued that even if Uber or Airbnb did enter the home meal sharing market and charge 15 percent fees (which is what DishDivvy currently charges), so what? As long as legislation is in place to ensure food safety and third party fee transparency — both of which are clearly outlined in AB-626 — why not open up a new, flexible market opportunity to budding food entrepreneurs?

The more I thought about it, the more I realized that the home cooking marketplace is another example of how complicated it is doing business in a tech-filled world. Yes, the home meal sharing economy is a ripe target for hungry tech businesses to take advantage of people. Which is especially dangerous when the target beneficiaries would be immigrants, people of color, and women.

But in the end, it boils down to what the home cooks want. If tech giants can give them access to an instant audience, providing a marketplace that new food entrepreneurs can easily plug into, then I say bring it on. But for now, it’s smaller tech startups like DishDivvy that are paving the way in the home food sharing economy.

Sure, Big Tech players will likely enter the home-cook economy in order to grab a piece of the (homemade) pie. In fact, AirBnB has already done so: Shyong references how the company sponsored the passage of AB 626, likely because homemade food preparation is a key part of some of its “experiences.” But there’s also a future where tech companies can help grow the home cook economy without destroying it.

DishDivvy Free to Connect Home Cooks and Customers with Passage of AB 626

DishDivvy has spent this year waiting. Waiting to see what would happen with California’s Homemade Food Operations Act (AB 626), which would make home based food businesses legal. With Governor Jerry Brown signing the bill into law this week, DishDivvy is no longer playing the waiting game and can fully launch its home cook marketplace.

Based in Glendale, CA, DishDivvy is a mobile app that connects hungry people with pre-approved home cooks selling food in their area. Right now, the app only works in certain parts of Southern California including Glendale and La Cañada.

Before cooks are allowed on to the platform, DishDivvy vets them with interviews and on-site inspections. Additionally, each cook must provide proof of food safety training and a California Food Handlers Card. There are additional health and safety regulations spelled out in AB 626 that home cooks must adhere to as well.

CEO & Founder Ani Torosyan told me she was inspired to start DishDivvy by her Armenian mom, who was always making food, and making way too much of it. For Torosyan, DishDivvy is a way to connect neighbors and communities through food, and to provide an authentic cultural alternative to many areas that only have generic chain restaurants as dining options.

Torosyan worked with COOK Alliance and was active in lobbying for the passage of AB 626. With the law in the books, DishDivvy is now free to scale up its operations.

DishDivvy currently has 45 cooks on its platform, which the company works with to help establish meal prices. When an order is placed, DishDivvy takes a 15 percent cut, leaving 85 percent for the home cook. The company also charges a five percent convenience fee to consumers on top of the order. Right now orders are only available for pickup from the cook’s home, but Torosyan told me that DishDivvy is partnering with DoorDash, which will soon facilitate delivery of home cooked meals to other homes.

As Spoon founder, Mike Wolf wrote in June:

“California often leads the country when it comes to forward-leaning legislation and if AB 626 passes it could open the door for nationwide legalization and give a framework for home food entrepreneurs (also known as the ‘cottage food’ industry), and b) I think home cooking is the next big micro-entrepreneur space to open up, much like home sharing and ride sharing did over the past decade.”

DishDivvy, which is currently hiring and closing its first seed round, has positioned itself nicely to ride any impending home cooking trend that AB 626 unleashes. And that was something worth waiting for.

In the Future, Shared Kitchens Will Function Like Community Centers

At the Smart Kitchen Summit (SKS), we love to highlight people who are forging new paths in the food world. But for those who are trying to jumpstart their own CPG food business, or scale up production, finding affordable commercial kitchen space can stop their idea in its tracks.

Ashley Colpaart is trying to lower that barrier to entry with The Food Corridor; a platform which connects budding food entrepreneurs with commercial production space. She’ll be speaking about how her startup is harnessing technology to disrupt the specialty food industry at SKS this October in Seattle.

To get you excited, we asked Colpaart a few questions about how she envisions the future of new food businesses, which CPG trends are on the rise, and why she considers her company “the Mindbody of food.” Read the full Q&A below.

This interview has been edited for clarity and content.

Q: How is the Food Corridor unique compared to other shared kitchen startups?

A: The Food Corridor is a tech-enabled platform that lets shared kitchens across the country operate more efficiently and grow more food businesses. Without owning any physical space, The Food Corridor is powering 80+ shared kitchen facilities across the US and Canada. Our network of co-cooking spaces is providing 4000+ chefs, caterers, food trucks, craft food producers, and delivery-only concepts a space to legally produce food and grow their dream business.

Q: You recently launched the app The Kitchen Door — what exactly does it do?

A: At The Food Corridor, our mission is to enable efficiency, growth and innovation in local food. Since our launch, we’ve done this through our kitchen management software that helps kitchen managers better operate all the moving parts of a shared commercial kitchen. This month, we are excited to launch our newest app: The Kitchen Door.

On a daily basis, food businesses contact us searching for a clean, friendly, and stable place to launch and grow their businesses. In response to this demand, our team has built the most comprehensive database of trusted commercial kitchens who have space available to rent.

The Kitchen Door is the go-to place for food entrepreneurs to search and contact an exclusive kitchen space to produce their goods.

Q: You’ve likened The Food Corridor to MindBody — the cloud-based management software for wellness classes — but for shared kitchen space. Why do you make that comparison?

A: Liking The Food Corridor to Mindbody actually led us to secure one of our favorite angel investors. In the early 2000’s his wife encouraged him to invest in a small software company that was helping yoga studios manage and book its yogis. It provides cloud-based business management software for the wellness services industry.

Similarly, The Food Corridor is a cloud-based business management software for the food industry. Our software handles tasks unique to a shared kitchen like hourly bookings, equipment rentals, compliance management, monthly plans, invoicing, and bill payment. The removal of these tasks, which used to be manual, frees up our kitchen owners to focus on increasing their number of renters, incubating clients and providing innovative services and programs.

Q: How do you see the cottage food industry space evolving over the next 5 to 10 years?

A: This may ruffle some people’s feathers, but I’m of the belief that the home kitchen is not equipped for growing a food business, specifically when it comes to scalability and consistency. The commercial kitchen, which is subject to safety standards pertaining to food and energy usage, is an important part of maintaining public health. That said, the cottage industry plays an important role for hobbyists following their passion for food and for budding food entrepreneurs testing recipes and getting direct feedback from consumers.

Like the rise in co-working spaces, I predict a rise in “co-cooking”  community-based commercial kitchen spaces. Paying a monthly membership fee to access a commercial kitchen that covers cleaning, water, waste, electricity and equipment repairs definitely takes a lot of stress out of the mix for food producers. With the rise in automation and the total cost of production of professionally-made food, the domestic kitchen may be becoming obsolete. I see co-cooking, community, and shared-use kitchens as the meeting places, gyms, and yoga studios of the future.

Q: What’s one of the most unique/bizarre foods you’ve seen made in one of The Food Corridor’s shared kitchen spaces?

A: Well, we are based in Colorado, so we see our share of marijuana or CBD inspired products — we are at a pretty high elevation after all. Pet foods seems to be super popular (you first-world dogs, you!) and of course, the sustainable and insect protein companies seem to also be making a go at it. I tend to get excited about the “delivery only” and “pop-up restaurant” concepts that we see taking hold.

Oh, and we do collect a list of creative food company names that we share across our team. Our favorites include: Fast and Curryous, Pride Enjoy, Subtle Tea, For Goodness Cakes, and Bruce Tea (to name a few)! There is not a lack of creativity in the food industry. That’s why we like it here.

Thanks, Ashley! If you want to see her speak more about the future of the cottage food industry and commercial kitchens, make sure to get your tickets to the Smart Kitchen Summit in Seattle on October 8-9th.

Yes, The Cottage Food Market Might Be Uberized, But That’s Not A Bad Thing

Most fresh food made at home (outside of canned and baked goods) is illegal to sell commercially in many states, including California.  Because of this, some in California have been working on creating momentum for a bill called the 2018 Homemade Food Operations Act (AB 626) in hopes that it will pass through the California legislature this year and become law.

The reason this is interesting to me is a) California often leads the country when it comes to forward-leaning legislation and if AB 626 passes it could open the door for nationwide legalization and give a framework for home food entrepreneurs (also known as the ‘cottage food’ industry), and b) I think home cooking is the next big micro-entrepreneur space to open up, much like home sharing and ride sharing did over the past decade.

While you’d think most would be on board, not everyone is. As can be seen from this excerpt from a guest column in the LA Times by Christina Oatfield, policy director of the Sustainable Economies Law Center in Oakland, some see a darker side to AB 626:

If AB 626 becomes law, the homemade food market would likely become dominated by big companies like Airbnb and Uber. The trajectory of these businesses is rapid growth fueled by venture capital and aimed at disrupting and then monopolizing a market. They disregard important public safety laws and worker protections by treating the workers as independent contractors. They could easily overwhelm the homemade food economy just as they have ride hailing, delivery services and vacation rentals.

Oatfield, who once operated an underground kitchen out of her apartment, seems to believe that once big platform players like Airbnb or Uber get involved in the market, they will inevitably treat home food workers as commodities and take outsized commissions from home cooks when listing their goods on their marketplaces.

While I think it’s good to be suspicious of any large platform player, I’d suggest Oatfield’s suspicion is overblown. Not only are the public safety concerns she lists specifically addressed by a compliance framework for home cooks within the proposed legislation, but I also wonder where her suspicions about the shadowy forces behind AB 626 come from. As far as I can tell, the primary advocates for AB 626 and legalization of cottage food businesses have been the C.O.O.K Alliance, a group founded by the same people who started Josephine, a now-defunct startup lauded universally for the way they treated the cooks on their platform.

And even if Uber or Airbnb did eventually swoop into the home meal sharing market with a platform and charge 15% fees, I would say this: so what? As long as legislation requires that food safety is the paramount concern, I do not doubt that an online marketplace like an “Airbnb for home cooks” would likely open up much more market opportunity than many small food entrepreneurs would otherwise have.

I’ll never forget when I met a woman named Majda, a former Josephine home cook, who told me about her dream of opening a home-based food business so she could retire from her day job at a casino. You see, Majda had trouble standing all day at her casino job and with Josephine, she had the beginnings of what seemed to be a flourishing home food business that would give her greater control over her time and allow her to stay at home. Or at least she did until Washington State forced Josephine to shut down.

While Majda probably would have liked to not pay any transaction fees to Josephine, my guess is that she probably had a much better shot at building a home food business with a platform that matched buyers of home food with home cooks like herself. Now she doesn’t have any way to reach her consumers other than through underground sales of her food.

So, does the cottage food industry need to guard against aggressive tactics by platform providers? Yes, of course. But just as with ride sharing, home sharing, and creator marketplaces, opportunities like this need platforms to match the sellers with the buyers. These platforms need to be built by companies with resources and experience building communities and marketplaces. Without them, the opportunities will never arrive and, as a result, the Madjas of the world will never have a chance to chase their dreams.

Bottom line: the home cook market will have the best chance of flourishing with the combination of a strong legal framework that ensures  both the consumer and entrepreneur’s interests are protected and a platform that brings together buyers with sellers. We’ve all seen the market building power of platforms – whether it’s those made for digital creators like Patreon, artisanal crafters like Etsy or, yes, gig economy workers like Uber – and the lesson learned is these platforms help to create markets that would otherwise stay dormant without them.

Pod Foods is a B2B Marketplace for Local Food Producers

It all started with a cookie. A cookie made with pea protein, to be exact.

When Pod Foods co-founders Larissa Russell and Fiona Lee started their pea flour cookie company, they assumed the toughest challenge would be developing the perfect recipe. Instead — and despite a vocal demand for their sweets from the local Bay Area community — they struggled to get their product onto retail shelves.

These frustrations prompted them to pivot from the world of cookie-making and start Pod Foods, a two-way, B2B software platform which aims to take the hurdles out of the wholesale-food distribution business.

Consumer trends show a growing demand for local food, but it’s difficult for local cottage food producers to get their goods into stores. Using distributors can be costly, and also requires makers to churn out tons of product, all of which must be shelf stable.

Meanwhile, selling directly to stores is also expensive and involves navigating the murky waters of marketing, pricing, and distribution with no assistance, an especially tricky task for those without business backgrounds or retail connections. 

Based in San Francisco, Pod Foods aims to facilitate the wholesale process by connecting vendors wanting to carry local products with small cottage foods producers, helping both sides manage the ordering, fulfillment, and payment processes.

“Usually, small producers just have to keep their vendor relationships and commitments in their head, or else use a Google spreadsheet,” Russell told the Spoon. With a Pod Foods membership, both producers and vendors get access to a personalized analytics dashboard (accessed via Pod Foods’ website) both parties can use to manage things like ordering, delivery, and inventory.

On the producer side, the dashboard lets food entrepreneurs track which stores are selling their products and if any items need a price adjustment. They can also list their goods on the Pod Foods platform to get discovered by nearby retailers.

Vendors, on the other end, can use the dashboard to track how their products are selling and source new local foods. So if a customer comes in and requests a particular type of kombucha they’ve seen at a farmers market, the store manager can easily find the supplier and order the product.

Pod foods offers three plan levels for stores: Standard (free with a 6 percent service fee and $500 order minimum), Select ($195/month with a 3 percent service fee and no minimum), and a Premium custom plan. These prices aren’t nothing, especially for small businesses and retailers, but according to Russell, they’re worth it: “We save grocery stores a lot of operational costs associated with ordering from local vendors, and we save vendors a lot of headache and money associated with major distributors including marketing fees, data fees and more.”

Fick’s margarita mix and Community Grains: two producers which distribute through Pod Foods.

Pod Foods currently works with around 200 emerging food brands and 20 vendors, from mom-and-pop shops all the way up to bigger retailers. Russell said that smaller shops use artisanal, locally made products — like small-batch cold brew or an addictive margarita mix — to draw customers away from bigger, cheaper grocery chains. “Stores want to source these local products,” she said. “But it’s expensive to find producers, and they don’t know how to seek them out. We offer that discovery ability.”

But Pod Foods doesn’t only cater to corner stores and bodegas. Russell told me that they’re in talks with larger grocery chains.

You might be wondering how a small, local producer could keep up with the level of demand from a grocery giant. “With our platform, products can manage their own inventory and level of visibility, stock numbers, etc. They’ll be matched with stores that they can support,” Russell assured me. So if a small artisan sausage maker did get picked up by Albertsons, they might start by supplying just one location, then widen the distribution network to more stores if and when they increase production.

Cottage food production is a risky business. Companies can fail if they scale up too quickly, don’t have the right margins, or don’t know how to effectively market their product. Some incubators, like Pilotworks and Commonwealth Kitchen, offer mentorship and help small producers to get their goods into retail and dining establishments. But Pod Foods would be a helpful service for food entrepreneurs who already have their production on lock and just need help managing their distribution — or for those who want to take more control of their marketing efforts and pricing strategies.

Russell told me that Pod Foods raised a pre-seed round in December through Unshackled Ventures and Hustle Fund in the Bay Area, with participation from a few angel investors. As of now, they work almost exclusively with companies in the San Francisco area.

“For vendors, it’s about growing their business,” she said. “For buyers, it’s a way to get products that people want.” Maybe someday they’ll even bring back those pea protein cookies.

Food Tech News Roundup: GM Hops, Food Delivery Mergers & Meat MRI’s

Happy weekend. This was a big week for food tech news, with funding updates from Instacart and Impossible Foods, and big partnership announcements from Innit/Chef’d and Kenwood/Drop. But there were also a bunch of smaller stories that caught our eye, even if we didn’t have time to write a post about them. So we rounded them up in one place for you! Put an egg on something and eat it while skimming through our roundup of this week’s food tech news stories.

Report: Postmates and DoorDash mull over merger 

Sources told Recode that Postmates and DoorDash, two food delivery giants, have discussed a possible merger at least once over the past year. This move would be a bid to gain advantage over competitors like GrubHub and UberEats in the hotly-contested food delivery war.

These murmurings come only a month after DoorDash secured $535 million in funding, which they said they would use to expand operations (and maybe invest in robots?). As of now there’s no deal, but this wouldn’t be such a bad idea. The food delivery sector is just too crowded — if these competitors could pull off a merger and optimize their service, I say go for it.

Photo: Pixabay

Unilever wants to turn plastic waste into food safe packaging

Unilever announced this week that it’s starting a new initiative to recycle polyethylene terephthalate resin, which is commonly used in clothing, food and drink packaging, and engineering projects. They want to turn any of their products made with PET resin, including ones that are colored, into transparent, food safe packaging. The consumer goods giant is partnering with recycling tech startup Ioniqa and Indorama Ventures, the world’s largest producer of PET resin, on the project.

It’s an interesting time in the world of food packaging. Various groups, including NASA and the military, are trying to make it lighter, safer, and more resilient. This initiative from Unilever might make it more environmentally friendly, as well. But it’s got a long way to go; currently, 91% of plastic waste isn’t recycled. With a massive company like Unilever behind it, this project might be able to reduce that statistic significantly. 

Credit-TECAL-GIM-UEx.jpg

MRIs can qualify meat taste without touching them

Researchers at the University of Extremadura in Spain have found a way to use magnetic resonance imaging (MRI), the same technology used in hospitals to look inside our bodies, to measure the taste properties of whole loins and hams — without touching them.

The technology uses non-invasive magnets and radio waves to take images of the meat, which is then run through a computer vision algorithm. Scientists can use the images and readings they see to make predictions on the quality of the meat, including its fat content, color, and salt content, without having to damage a pricey Iberico ham.

This research indicates another approach to food safety monitoring and quality control, which is a fast-growing market full of startups like Mimica and FoodLogiQ.

 

Would brewers replace hops with GMO yeast?

Hold on to your IPAs: A team of chemists and geneticists in California have developed a genetically modified yeast that can mimic the flavor and aroma of hops. To make it, they spliced DNA from mint and basil plants into the genes of brewing yeast, which gave the yeast a grapefruit-like flavor typical of the Cascade hop.

By swapping out hops for GM yeast, brewers could have greater control over their product, reduce the costs of beer-brewing, and reduce environmental impact. As might be expected, craft brewers aren’t eager to replace hops with GM yeast — they feel it takes some of the art out of brewing. But we’re seeing more and more intersections of beer and tech, from IoT-powered beer tracking systems to beer publishing systems for at-home brewers.

 

Photo: AgVend

AgVend raises $1.75M in seed funding

Last week ag-commerce startup AgVend raised $1.75 million in seed funding. The round was led by Drew Oetting at 8VC, with participation from Green Bay Ventures, Seahawk Capital, The House Fund, and others.

Agvend is a digital commerce platform which lets farmers compare prices and purchase ag services and inputs. With AgVend, farmers can order a specific fertilizer and have it delivered (via AgVend’s partners) the same day or take advantage of flash sales promotions, without ever leaving their farm. The startup launched at the beginning of 2018 and now covers states across the Midwest and Pacific Northwest, with plans to expand later this year.

This year has been a big one for agtech startups. In the last few months indoor farming company Agrilyst and peer-to-peer farming network WeFarm also closed fundraising rounds. Agtech is definitely a growing market, and one to keep an eye on.

Josephine, The Uber for Home Cooking, Shuts Down

Josephine, the startup that gave home cooks a platform to sell their own food, is shutting down. According to a Medium post by Josephine CEO Charley Wang, the last date for meals on the platform will be March 30.

From that post:

We knew that Josephine was an ambitious idea from day one and, as you all know, there have been many highs and lows over the years. At this point, our team has simply run out of the resources to continue to drive the legislative change, business innovation, and broader cultural shift needed to build Josephine.

The company had faced legal ups and downs as the service rolled out across the country as so-called cottage food laws are a patchwork nationally, varying from state to state.

Josephine scored a victory last year when the California Health Committee voted yes to send the “2017 Homemade Food Act (AB 626)” on to the state house, though it looks like the bill is still being amended. But Washington state was slow to create a pilot program for cottage food sales, forcing Josephine to shut down operations there this past December.

The Spoon’s own Mike Wolf was a fan of Josephine (and the peach cobbler he ordered through it). As he wrote earlier:

“Because of the win-win nature of Uber models, it was only a matter of time before they ended up in the home kitchen. Not only are companies aspiring to give grannies and wannabe chefs a way to share their home cooking, but large appliance companies are beginning to explore ways to enable buyers of their products to share them via an Uber-like marketplace.”

But strict regulations are not always bad, especially when it comes to making sure the kitchen making your clam chowder is a clean one. Josephine had raised more than $2 million from Kapor Capital and angel investors. From Josephine’s post, it sounds like the company couldn’t find more money to get over the hurdle where buying someone’s home cooked meal went from weird to a new normal.

And while Josephine is shutting its doors, there are others still searching for that perfect pairing of home cooking and the sharing economy. One such company is Feastly, which matches hungry diners with chefs who serve meals in their own homes. Pull Up A Seat is a service similar to Josephine that fashions itself as the ‘Etsy for home cooks’. Then there’s Eatwith and Mealsharing, both Airbnb-like marketplaces for home cooks to sell ‘meal experiences’ to travelers. And finally, there’s Airbnb itself, where some enterprising hosts are using the company’s “experiences” platform to offer home-cooked food.

So don’t give up yet. Perhaps there’s still a chance for you to find that delicious peach cobbler from someone in your own neighborhood or on the other side of the world.

California Health Committee Approves Homemade Food Act, Further Opening Door For Cottage Food Platforms

Yesterday I wrote about a piece of legislation before the California Assembly’s Health Committee, the “2017 Homemade Food Act (AB 626)”.

After yesterday’s vote, it looks like California may be on its way to allowing entrepreneurial home cooks to start selling their food to neighbors, opening the door to “Uber for Home Cooking” platforms like Josephine.

The 15 member Health Committee saw 12 yes votes and zero no votes (there were three no responses), voting the bill out of committee on a bipartisan basis. The bill is on track for a summertime vote by the full legislature, and if the bill passes a house vote, it would mean Josephine could resume operations in the Bay Area by this summer.

Nationally, Josephine is pursuing similar efforts in other states to have local legislatures reevaluate antiquated cottage industry food laws that restrict home cooks from selling their food as a business. Some states – such as Wyoming – have very permissive laws, while others are similar or more restrictive than California’s.

I think home cook sharing economy platforms make sense. As I wrote yesterday:

“Just as how Uber, Airbnb and other sharing economy platforms gave entrepreneurial folks a marketplace to rent their underutilized assets – whether that be a car, apartment or a person’s own time and labor – it’s logical that there’d also be demand to do so with home cooked food. In fact, it would be hard to argue there isn’t a large potential market of people on both sides of the equation – those who can cook and need to make some extra money, and those who like to eat – to make a marketplace like Josephine successful in the long run.”

Josephine Looks To Change Cottage Food Laws In Effort To Expand Home Cooking Marketplace

Today’s a big day for Josephine, the startup behind the ‘cottage food’ sharing platform and marketplace that enable home cooks to sell food to their neighbors.

That’s because today is the day a bill is being considered by the Health Committee of the California state legislature called the 2017 CA Homemade Food Operations Act (edit: the bills name was changed to “AB 626—The 2017 Homemade Food Act” in the form it went before the committee). The bill, which Josephine management helped craft and introduce, would expand California’s current cottage food law to allow aspiring home-based food entrepreneurs to sell home cooked meals to neighbors.

(Ed Update: The bill passed out of assembly on April 25th. You can read our story here). 

That’s naturally of interest to Josephine, which has built a platform which can more or less be described as an “Uber for cottage food” (although it should be noted the company resists the negative connotations associated with platforms like Uber). The problem for Josephine, which is based in Oakland, is that the sale of home cooked meals to neighbors is not allowed under current California law. As a result, about a year ago home cooks using Josephine received cease and desist letters, which eventually led the company to shutting down operations in the east Bay area.

The company, which has investments of about $2 million from Kapor Capital and angel investors, believes home cooks with the proper licensing should be able to sell food to their neighbors. And why not? Just as how Uber, Airbnb and other sharing economy platforms gave entrepreneurial folks a marketplace to rent their underutilized assets – whether that be a car, apartment or a person’s own time and labor – it’s logical that there’d also be demand to do so with home cooked food. In fact, it would be hard to argue there isn’t a large potential market of people on both sides of the equation – those who can cook and need to make some extra money, and those who like to eat – to make a marketplace like Josephine successful in the long run.

I caught up with Josephine cofounder Matt Jorgensen to ask him about Josephine’s efforts to change California’s cottage food law and also get a little backstory about Josephine.
You can keep up with the status of Josephine’s efforts and the California Homemade Food Operations Act at their blog.

When was Josephine forced to halt operations?

Jorgensen: In April of 2016, several of our cooks were served Cease and Desist warnings from local health regulators, which lead us to halt operations in the East Bay. This ultimately led to our good faith collaborations with State health regulatory coalitions in CA

With the Homemade Food Operations Act (Editor Note: Bill name was changed to “The 2017 Homemade Food Act:), when is a vote expected on this bill?

First the Bill must pass through Health Committee next Tuesday April 25th, and we expect the legislature to vote at some point in the early summer.

How does California compare to other states in terms of legality around cottage food as a business?

Jorgensen: California is essentially on par with the 30+ states that have passed Cottage Food laws.

Like many states, certain California cooks with the access and means can apply for cottage food permits as hobbyists, but the law doesn’t allow for the sale of most financially viable/ culturally relevant products… instead it’s focused on certain shelf-stable foods (jams, granolas etc). So we haven’t seen CA yet push beyond others in terms of the available food types. Several states go further, with Wyoming’s “Food Freedom” law being the most open.

Do you see this bill as the first in a push towards national rolllout? (And will other states follow suit)?

Jorgensen: We’re taking a different advocacy approach in each state– while we’re supporting Garcia’s legislation in CA, we’re actually looking at various administrative paths in other states. In Portland for example, we have strong support letter from the Mayor for a proposed pilot program. In other states like Wyoming the low-risk behaviors we are proposing are already legal.

How does Josephine business work? Is it similar to other sharing economy services that take a % of the overall bill? Charge a flat service fee?

Jorgensen: There’s no cost to set up a cook account or post meals. For each meal cooks serve, they keep 90% of your total sales and 10% of your sales will go toward covering credit card fees and the cost of our services. We also partner with values aligned non-profits for no cost.

How does Josephine find new cooks?

Jorgensen: Mostly through word of mouth and through offline communities. Many cooks are already partaking in the types of activities we support before choosing to partner with Josephine.

How does Josephine ensure people are going to be quality cooks? I assume getting a “cottage cook” license (as permitted by the bill) would be one step. But are there other things you do?

All cooks go through a vetting process from the masters of public health on our team and have access to our knowledge base before posting their first meal. We work with them to ensure a quality first experience, but all meals are also reviewed by customers (built-in accountability).

Is Josephine the only cottage cooking platform app, and if so why hasn’t this market taken off (is it legal restrictions, or something more as well).

Jorgensen: Some other companies have tried to make this business work, but we believe we are still in the early days of building the cook confidence and public trust necessary for this business to succeed.

How big is Josephine and what is your funding?

Jorgensen: We have a few hundred cooks across the country, a staff of 10 in Oakland, CA, and funding from a handful of different impact, angel, and venture capital investors. We’ve raised a little over $2m so far from angel and impact investors including Kapor Capital.