sharing economy

December 19, 2019

DishDivvy to Expand Homemade Food Marketplace to Utah

Talented cooking hobbyists of Utah, you’ve got a new potential side hustle. Yesterday DishDivvy, a marketplace which connects home cooks with hungry neighbors, announced that it had begun operations across Utah.

DishDivvy is a mobile app that lets preapproved home cooks sell food to local consumers. The startup helps home cooks get certified and onboarded onto their platform. They also handle all ordering and payment internally, and can even help arrange for home delivery. Utah will be the second territory for Glendale, CA-based DishDivvy, the first being its home state of California.

DishDivvy wasn’t the first company to try and create a cottage food marketplace. Josephine was an early entrant in the food sharing economy, similarly connecting home cooks with hungry consumers. Due to regulatory issues they were forced to suspend operations at the end of 2017. However, with the passage of California law AB-626 (which was pushed forward by Josephine’s team), DishDivvy was able to commence operations in California at the end of 2018.

Utah has just passed a similar law with H.B. 181, The Home Consumption and Homemade Food Act. Under the law, home cooks in Utah are “exempt from any state, county, or city licensing, permitting, certification, inspection, packaging, and labeling requirements,” provided they comply with certain requirements set in the law. Therefore Utah residents, like Californians, are now able to sell homemade food directly from their home — as long as they have the proper permits to do so and follow some basic rules (food must be for home consumption, sold directly to consumer, etc).

We at the Spoon have been intrigued by the idea of a home cook marketplace for awhile. It’s an interesting way to give people a supplementary revenue source, keep money within a community, and connect neighbors, all while cutting down on food waste. That’s why we named DishDivvy one of our FoodTech 25 for 2019.

Last June, when Mike Wolf wrote about AB 626, he noted that “California often leads the country when it comes to forward-leaning legislation” and that the new law “could open the door for nationwide legalization and give a framework for home food entrepreneurs.” It seems like California has indeed opened that door for Utah — and I’m guessing we’ll see some more states pass laws to welcome cottage food industry in 2020.

February 19, 2019

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.

February 13, 2019

Are Hourly Home Kitchen Rentals the Next Sharing Economy Opportunity?

Call it uberization, the sharing economy or collaborative consumption, the idea that people may have something others want and can rent or sell a portion of it frictionlessly through online marketplaces has changed the game for industries ranging from hospitality to transportation.

Food and cooking is no different. Uber Eats, virtual kitchens and the fast emergence of home cooking platforms in the wake of the passage of AB-626 has shown us food system business models are ripe for reinvention through the power of peer to peer.

But what about home kitchens? More specifically, what if we could simply rent a neighbor’s kitchen – built in appliances, blenders, countertops and everything else – by the hour?

While many of us have an oven, cookware and all the cooking gadgets needed to whip up a tasty meal, others are forced to eat out, have food delivered or impose on a friend either because they are kitchen-less or just don’t have the right set up to cook the big holiday meal or entertain in the way they would like.

What got me thinking this could happen is the recent news that by-the-minute hotel stay app Recharge has moved into the home market. If you’re not familiar with Recharge, they are known for offering access to hotel rooms on a by-the-minute basis so people can nap, shower or…whatever. It works with 50 hotels and now the company says they’ve signed up over one thousand homes for the platform.

With homes available by the hour, I have to think kitchens will be a central attraction for many. Whether it’s hosting a dinner party, baking cookies for the holidays or cooking a week’s worth of home meals for the family, there are all sorts of use cases where hourly access to a kitchen just makes sense.

In a way, hourly access to home kitchens is an extension of what we’re already seeing in the maker market, where concepts like that of Tinker Kitchen have emerged for people who want to get into a fully equipped kitchen to cook a souffle or try out a new cooking appliance.

“We are aimed at people who usually wouldn’t step into a commercial kitchen,” Tinker Kitchen creator Dan Mills told the Spoon last August. “It’s food for personal enrichment,” he said.

Enrichment makes sense for the aspirational and hobbyist chefs among us, but there are probably lots others who just have an immediate need to make some food or host a party. A platform for renting a home with a nice kitchen would meet that kind of need quite nicely.

So will a sharing economy for the home kitchen take off? It’s too soon to say for sure, but my guess is yes. And the best part is? You can always book an extra hour to take a well-deserved nap on someone else’s bed when you’re done with that culinary masterpiece.

August 31, 2018

California Senate Greenlights Home Based Food Businesses With Passage of AB-626

This week marked an important milestone for aspiring chefs looking to build a home-based food business: the Homemade Food Operations Act (AB 626) was unanimously passed by the California state senate on Wednesday and will become law barring an unlikely objection by California governor Jerry Brown.

The new law will legalize the sale of home cooked food in California. It’s an important step forward in making home cooked food the potentially next big sharing-economy opportunity following the rise of ridesharing and short term home stay marketplaces over the past decade.

As I wrote in June:

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.

Just as with craft brewers, aspiring food entrepreneurs often get started in their own kitchens. With the passage of AB 626 in influential California, it’s easy to see how the cottage food business could act as a catalyst for bigger food businesses in the future. As we learned this week from Eric Rivera, home cooking businesses can be a gateway for future restaurant innovators and operators.

The passing of AB 626 is also a big win for the folks behind COOK Alliance, the organization formed by a cofounder of the now-defunct cottage food sharing platform Josephine. Former Josephine co-CEO and COOK Alliance founder Matt Jorgensen has made it his mission to advocate for the legalization of cottage food industry, in large part because he sees it as a significant economic opportunity for low-income populations without any startup capital other than a home kitchen and cooking know-how.

From Jorgensen’s own blog post in July:

We believe home cooking helps build healthy, resilient communities and create economic opportunities for the people that need them most. Outdated food codes criminalize informal homemade food sellers, resulting in fines and misdemeanors for entrepreneurs who are most typically low-income women, immigrants, and people of color.

From here the bill goes to the desk of Governor Jerry Brown and once passed, home cooks with permits can start selling food to their hungry neighbors.

June 24, 2018

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.

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.

February 8, 2018

The Food Corridor Raises $555k to Bring Sharing Economy to Commercial Kitchens

Say you’ve spent the last months or years perfecting the world’s best recipe for Sriracha-flavored popcorn or drinkable soup (yes, that’s a thing) and now you want to bring it to the masses. Your family and friends love it, you’ve saved up some money or secured a line of credit, and while you’ve never started a food business before, you’re ready to strike out on that path to become the next Chobani or Stumptown.

What’s the first thing you need to do?

Ashley Colpaart, CEO of The Food Corridor

Chances are, it’s making the move out of your own kitchen and into a commercial space, a hurdle that often stops budding food entrepreneurs in their tracks. A shame really, since the typical commercial kitchen goes unused over 50% of the time. Enter The Food Corridor: an online platform where food businesses can connect with and choose commercial production spaces and gain access to tools like scheduling and booking, payment processing, and health code documentation. Airbnb is a co-living space, WeWork is a co-working space, and TFC bills itself as a “co-cooking space”—one which hopes disrupt the speciality foods industry much as Airbnb has disrupted the hotel industry.

They’re now one step closer to their goal. Earlier this week, TFC closed their seed round and officially raised $555,000, all from within their home state of Colorado. Co-founder and CEO Ashley Colpaart told the Spoon that they will use their funds to add additional revenue generating features to TFC platform, grow the number of kitchens powered by their software over the next year, pay sales and marketing expenses, and hire key personnel.

Colpaart first got the idea for TFC when she was a PhD student at Colorado State University and got invited to Washington to a USDA event about food systems. After an onslaught of proposals which focused on infrastructure but didn’t come with a well-thought-out business plan, her frustration grew. “I got a little weary of allocating funds to something that didn’t seem like the right answer,” she said in an interview last year. While in an Uber (her first!) back to her Airbnb, she started thinking about ways to apply the sharing economy that’s so integral to vacation rentals and transportation to the food system.

“I was, like, ‘are we using the resources we have efficiently before we go build new ones?'” The answer was no—or really, not yet. Thus TFC, the online marketplace connecting shared-use kitchens with food entrepreneurs, was born.

In the past few years, the sharing economy has started to democratize food creation through shared kitchen spaces and food business incubators. TFC hopes to capitalize on this trend and facilitate its growth. “The goal is to create a resource that is an enduring contribution to the sustainability of shared kitchens,” said Colpaart.

TFC is hoping to become a key innovator in this emerging industry. They are planning a meetup later this year to bring together the leaders in the cottage foods disruption space. “I also think there is an opportunity to leverage the infrastructure of the kitchen to support more food entrepreneurs through technology,” said Colpaart. “For example, cloud kitchens or delivery only restaurants.” As long as it gets us more Sriracha popcorn faster, we’re in.

_____________

The Spoon had a chance to ask Colpaart a few questions about the news and her plans for TFC. You can see our interview below.

Tell us a little about the Food Corridor?

Colpaart: The mission of TFC is to enable efficiency, growth, and innovation in local food… We provide a real solution to a real problem in the food system by using a proven, scalable concept applied to a new vertical.

We’ve seen a bunch of interest and growth in shared kitchen, kitchen incubators, in the last few years as the sharing economy has started to democratize food creation. How will TFC add to this conversation?

Colpaart: In addition to bringing the sharing economy to specialty foods, we are supporting local policy to increase shared use kitchens and grow the industry. We also facilitate the largest network of shared kitchens (900+) in the country, the Network for Incubator and Commissary Kitchens, which we are using to become the trusted thought leader in the space by providing content, industry reports, white papers, and a curated community to support the industry.

We are currently developing a Shared Kitchen Toolkit (SKT), as a collaboration between Purdue University, The Food Corridor, and Fruition Planning & Management, with funding from the USDA North Central SARE. The SKT is a web-based resource (both downloadable and dynamic) that will include guidance on feasibility and planning for new kitchen projects, as well as best practices for the day-to-day operations of shared-use kitchens. The goal is to create a resource that is an enduring contribution to the sustainability of shared kitchens.

How did food become such a focus for you?

Colpaart: My mom was a food entrepreneur (had a hot sauce company and catered out of our house). My dad was a hardware engineer (designed microprocessor chips) in Silicon Valley during the boom. I was raised on food tech.

What do you want Food Corridor to be in 5 years?

Colpaart: The mission of TFC is to be the world’s virtual food hub, enabling efficiency, growth, and innovation in local food systems across the globe. We want the platform to be a one-stop-shop for food entrepreneurs looking to start and scale food businesses by leveraging network assets and ecosystem services.

January 26, 2018

Uber Eats’ Move Adds to a Noisy, Competitive Delivery Market.

The food delivery business has suddenly shifted from being about consumer convenience to a battle of market competitors more focused on profits and flattening the value chain than providing options. An industry focused on giving hungry consumers the opportunity to select from a wide array of dinner-time choices has morphed into pizza delivery 2.0 and that’s, at best, boring. Simply said, the home chef faces a lot of cacophonies when it comes to grocery delivery, meal kits, and restaurant fare (home and away).

Profits are a good thing, especially for public companies or ones with an eye on expansion or acquisition. However, what we find in recent announcements is a change from the initial concept of turning a fleet of rideshare drivers into a virtual extension of a city’s best restaurants. When Uber Eats acquires Ando, a “dark kitchen,” its fare likely will become the focus of its New York delivery options. The king of all rideshare firms thus sends a signal to its customers that Ando’s bibimbap and fried chicken will be tonight’s special every night. The food delivery business is heading for a 180-turn, moving from delighted consumers (as we see in the GrubHub ads) to one of supplier vertical consolidation.

“We are committed to investing in technology that helps consumers, delivery and restaurant partners alike,” Jason Droege, Head of Uber Everything told TechCrunch. “Ando’s insights will help our restaurant technology team as we work with our restaurant partners to grow their business.”

None of this is to say that Uber Eats is wrong or alone in seeking ways to increase its bottom line. Others such as Deliveroo and Amazon are connecting pieces of the value chain—that is owning the food prep and delivery segments of the business—to streamline its operations. And, from a business 101 perspective, it is a sound idea if the founding principle of consumer choice remains intact.

Even with innovations, such as robotic delivery and ordering food based on your specific health DNA, this is an industry headed for a major reckoning. Why? Here are a few good reasons:

The barrier to entry is low. Take Evansville 2 Go for example. A local man in Evansville, Ill., has built a food delivery service for his local community by hiring some drivers and connecting with a handful of local restaurants. There are many similar examples taking place around the country where entrepreneurs in markets too small for the “big guys” to tackle are building simple versions of GrubHub, Uber Eats, and Amazon Restaurant delivery. As pizza parlors as far back as the ‘60s (that’s the 1960s) knew, all it takes to deliver a fresh pie is a telephone and a trustworthy person with a car.
Dark kitchens are a weak link in the restaurant delivery business. When a customer looks at his or her menu options for food, what is the more likely choice—an establishment at which they have had a memorable meal or one that may be run by a celebrity chef but lacks the cache of a local favorite?
Competition for the consumer dollar. The average American dines out a bit more than four days a week. That leaves three days for restaurant delivery and home meal kits (of all varieties) to battle it out for the consumer dollar. Given dining out often costs more than these two alternatives, there’s not a lot left in an individual or family’s food budget after those four out-of-home meals.

For those who believe that millennials will drive the restaurants delivery business, here’s some interesting news from economists at Bank of America Merrill Lynch. Millennials are losing their taste for restaurant dining. Spending at restaurants went down more than seven percent since 2015.

“It stands out as a bit unusual how soft restaurant spending has been considering where we are in the business cycle,” Michelle Meyer, head of U.S. economics at BofA Merrill Lynch told CNBC. “The consumer should be spending more on a broad range of items. But we’ve seen restaurants slowing more akin to a recessionary environment.”

Take heart—pizza delivery isn’t going anywhere.

January 23, 2018

Selling Snacks to Add Revenue for Rideshare Drivers and Airbnb Hosts

There was a strong ethos of community when startups like Lyft and Airbnb helped kickstart the “sharing economy.” Lyft had passengers sit in the front seat and fistbump their drivers, and Airbnb CEO Brian Chesky once remarked that his company was “in the business of meaningful experiences.”

But it looks like the kumbayah days of simply renting your spare room or backseat for some extra cashe are giving way to the capitalist world we are all familiar with. One where in addition to paying for your space, guests and passengers pony up for snacks, treats and other sundries.

Yesterday, Cargo, a startup that lets rideshare drivers sell snacks from the front seat of the car, announced that it had raised $5.5 million. Cargo is basically a container that straps to the center console. Inside are things like snack bars and breath mints–stuff you see at the counter of a convenience store. Passengers can use their mobile phone to order and pay for desired items.

According to TechCrunch, the company is in 2,500 cars on the road in NYC, Chicago, Boston and Minneapolis — with 20,000 drivers signing up for the service from all around the U.S.. Drivers get a commission and evidently earn on average an extra $100 or so a month. So wherever you are, you’re bound to encounter upsells in your Uber relatively soon.

Then there is Qvie, a company we looked at earlier this month. Qvie is a small vending machine that you can put in your Airbnb to offer wine or snacks to guests. The Qvie is just a single-item vending machine right now, but as Mike Wolf pointed out, it’s not hard to imagine them coming out with something closer to an unmanned store offering up a variety of items.

To be clear, both of these ideas seem like good ones. There have been a few times when I’ve wished for a breath mint while on a ride to a meeting. And if you’re going to rent your home out, it makes sense to offer up snacks or items people may have forgotten (toothpaste, band-aids, etc.), though I’m not sure of the legality of selling wine in your house.

But both Qvie and Cargo point to a whole selling ecosystem rising up inside the sharing economy to add incremental sales for owners and convenience for customers. Plus, consumer packaged goods companies will also want this sales data to better understand buying patterns of their products. These vending systems will get better and smarter and more prevalent.

I mean, it’s not that ridiculous to think that Domino’s will get into this game and somehow combine its pizza oven car with an Uber for a piping hot pizza pie available to grab as you arrive home after a night out. Which, when you think about it, is totally worth a fistbump.

You can hear about Spoiler Alert in our daily spoon podcast. You can also subscribe in Apple podcasts or through our Amazon Alexa skill.

December 12, 2017

“WeWork” for Food Entrepreneurs Gets Financial Shot in the Arm

Budding butchers, bakers, and (edible) candlestick makers have another innovative option to provide the vital tools, training, and resources to facilitate movement from startup home food entrepreneurs to the realization of their goals of commercial success.

New York-based Pilotworks (formerly FoodWorks), billed as a “WeWork for food startups,” has received $13 million in expansion capital from Acre Venture Partners, a fund backed by Campbell’s Soup, along with TechStars, a funding and mentoring program. The money will be used for expansion to markets, such as Chicago and Dallas, along with the development of the necessary properties, culinary infrastructure, and staffing.

A company press release reveals the company was founded in 2016 and has since helped more than 250 food and beverage startups get off the ground. Pilotworks says that more than 70% of the businesses it has worked with are women or minority-owned.

“We’re very excited to add so many great strategic partners and continue our work of empowering anyone to start a food business successfully. We will be adding new units: Newark just opened, and Chicago and Dallas are slated to open in December alongside our existing kitchens in Brooklyn, Portland, and Providence, as well as furthering our presence in New York City. We are also excited to continue expanding our services and offerings across the entire food stack,” said Pilotworks CEO and co-founder Nick Devane.

The company’s website says it offers a full range of services that go beyond a mere stove and fridge. Everything from garbage and linen service, to assistance with branding and web design, is available to its members. Companies such as Aida Eats, Mac & Son, BOONBOX, Dank, and Crown Jewel Beverages are veterans of Pilotworks programs.

While the association with WeWork is fine for general identification purposes, it fails to capture the essence of what makes the boom in community commercial kitchens a hot commodity. Pilotworks enters a crowded space that spans options from highly regarded Food Corridor—a community and network of commercial kitchens that offers similar services to Pilotworks in a more federated manner—to individual shared-use kitchen incubators such as Capital Kitchens in Austin. The website Culinary Incubator offers a database and list of 725 shared-use kitchens in the United States.

What looms as a difference-maker for Pilotworks is its association with Campbell’s Soup. The New Jersey-based food and beverage giant could use this network of startup kitchens to find the next great idea to bring in house and take to the global market. That said, Tyson Foods, General Foods, and others also are operating accelerators with the same endgame in mind.

Worth noting is the startup goldrush led by Pilotworks and other similar endeavors focused on major markets that are either population centers (New York, Dallas, Chicago) or food meccas (Portland, Providence). A tour of any farmers market in smaller cities would prove there are some great food-next ideas worth nurturing outside marquee locations.

April 25, 2017

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.

December 3, 2016

Welcome To Uber For The Kitchen

You don’t have to be a technology insider to know the world has been Uberized.

The reason ‘Uber-for-X’ companies are popping up like daisies is the sharing economy concept is both simple and revolutionary. Rare is it that a model works so well for people on both sides of a transaction, but that’s exactly what Uber-models do by creating low-friction marketplaces that earn the owner a little money for an underutilized asset – whether it’s a car, a basement room or their labor – while providing access at an affordable price to the buyer.

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.

One of the Uber-for-kitchen concepts is Josephine, a platform for home cooks to feed people in their neighborhood. Sign up for Josephine as a customer, and you’ll find yourself chowing a neighbor’s chili and cornbread. The goal is to match cash-hungry home cooks with people who are hungry. However, while there is no shortage of home cooks and hungry people, the market narrows considerably when looking for folks willing to invite strangers into their home or buy food from a complete stranger. But, just as we saw with Uber, what once seems weird fast becomes the new normal when people begin to do it at scale.

Want to go on a food tour of Miami or Seoul? You can now book with local home cooks through Trips from Airbnb. The home sharing service company recently expanded more fully into dining and travel more with Trips, an evolution of the Airbnb Experiences program which the company launched into beta in 2014. This expansion allows for food to be offered as what is essentially a tourist package, where aspiring cooks can offer home cooked meals to travelers or local foodies can create food tours of local cities.

Electrolux is exploring the Uber concept for home appliances. While the company CEO initially mentioned they were toying with the idea of Uber for washing machines, their out-of-the-box thinking could also include dishwashers and even stoves.

Appliance sharing is still in its early days, but as I wrote a few weeks ago, manufacturers are evaluating how connectivity and smarts to can enable new business models. They’ve watched as smart devices reinvented a whole slew of industries from travel to home security to transportation, and are exploring how they can transform themselves from makers of metal boxes into trusted service providers using the same foundational technologies. By creating a sharing platform, these companies could make themselves more indispensable by not only enabling a new way to purchase fractional access to appliances but by also creating business opportunities for their consumers.

And while I’ve yet to see an Uber-for-kitchen company for renting out an entire kitchen, it’s only a matter of time. After all, if you can rent a single room in a home to sleep in, why not rent a kitchen to cook a meal? At least that way, you might be able to skip going home to that weird uncle of your’s for the holiday meal.

sharing economy

Footer