Entrepreneurs looking to break into the highly competitive food industry have found invaluable tools and support in northwest Alabama.
The Florence-based Shoals Entrepreneurial Center is home to a culinary incubator that offers a fully equipped, FDA-approved commercial kitchen for fledgling startups to rent at reasonable rates.
Beyond that, the center’s staff provides coaching for its culinary clients, with advice on everything from marketing and packaging to volume production and distribution networks.
“We ask them, ‘Who in the grocery store are you going to knock off the shelf?’” said Giles McDaniel, the center’s executive director. “We try to encourage them to find a special niche first, and we’ve got local grocers and farmers markets where they can try it out and get their feet wet.
“We’re in business to save them a fortune up front, and hopefully they can make a fortune in the end.”
To date, about 200 companies have gone through the incubator, dreaming of hitting it big with their barbecue sauces, gumbos, salsas, breads, gourmet treats and more.
The incubator opened in the late 1990s as one of the first of its kind in the U.S. And while others have followed, the Shoals center pioneered the model and continues to churn out success stories.
Clients pay $25 per hour, along with cleaning charges and other fees, for the time they use the facility. It saves them from having to buy their own equipment or rent commercial kitchen space elsewhere, both expensive options.
“It’s very economical for what you get, since we have well over $500,000 in working equipment in there,” McDaniel said.
One of the incubator’s most successful graduates is Martha Grace Foods, the company behind Mook Mills Cheese Straws.
From 2001 to 2009, the Shoals Entrepreneurial Center was the company’s business site, providing crucial support in the early days. The culinary incubator was worth an estimated $500,000 in startup costs, said Patrick Smith, president of Martha Grace Foods.
“We would have had to come up with that much capital on Day One in order to operate, and that would not have been feasible,” he said. “Martha Grace Foods and Mook Mills Cheese Straws would not exist without the Shoals Entrepreneurial Center.”
The cheese straws, which are Smith’s mother-in-law’s recipe, have gained a large and growing following across the Southeast.
Today, they are sold in a little more than half of all Publix Supermarkets, as well as Winn-Dixie, Western, Piggly Wiggly and Mitchell Grocery stores. Expansion plans are in the works with Kroger and other chains, Smith said.
The company, meanwhile, has its own production facility in Tuscumbia, the family’s hometown.
‘A fabulous thing’
The SEC and its culinary incubator also have been indispensable for Laura Hester and her company, Red Gingham Gourmet.
Her signature products are jalapeno and classic cornbread muffins, which she continues to make at the Shoals center kitchen. They are sold in the freezer section at stores including Walmart, Piggly Wiggly and Foodland.
“Normally I would have had to go into so much debt to set up a kitchen, but this incubator is a fabulous thing for small businesses getting started,” Hester said. “I probably wouldn’t be in business if I hadn’t had it.”
Red Gingham, which is also a certified woman-owned business, is expanding on several fronts.
Hester is trying to grow her dry mix business by marketing the mixes to higher-end shops and boutiques as gift basket items. She has 10 flavors of the quick and easy mixes for cornbread, scones, biscuits, pancakes and gravy.
Red Gingham also is working with additional grocery chains, and a new venture with Walmart is on the horizon. Later this year, Hester plans to introduce four new breakfast items in the retail giant’s freezer section, including fully cooked, individually wrapped muffins made with all natural ingredients.
Greg Canfield, secretary of the Alabama Department of Commerce, said the Shoals Entrepreneurial Center’s culinary incubator fits in with a statewide goal to foster entrepreneurship and innovation, which is a key element of Accelerate Alabama 2.0, the new update to the state’s successful economic development growth plan.
“The Shoals Entrepreneurial Center’s culinary incubator is a model for the support we want to provide for entrepreneurs in a variety of business sectors,” he said. “Whether it’s a food venture, high-tech startup or another type of project, we are striving to help people take innovative ideas to the marketplace and achieve success.”
The food industry is a particularly tough place for startups to succeed, but there are growing trends that favor local entrepreneurs, McDaniel said.
“You’ve got unique challenges in the food business, because of the volume of product that you have to sell to make money,” he said. “People still buy their food mainly in a grocery store setting, and it’s tough to get in there, since that space is controlled by a few large conglomerates.”
But consumers’ increasing desire for more locally sourced, healthy food has provided a boost for startups, and supermarkets are more willing to find space for their products.
“People now want more local food, and they want to know the source of their food, so that’s been a plus for local suppliers,” McDaniel said.
This story originally appeared on the Alabama Department of Commerce’s Made in Alabama website.