Making, scaling, and inclusion

APPETITE FOR GROWTH: CHALLENGES TO SCALE FOR FOOD MAKERS IN 3 U.S. CITIES Greg Schrock, Portland State University Marc Doussard, U of Illinois at Urbana-Champaign Laura Wolf-Powers, CUNY Hunter College

Food: Past and Future of Urban Mfg? 

Urban food production in the Industrial City…

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And today’s “PostIndustrial” city …

Makers and the Challenge of Scale 

Not all makers want to grow into manufacturers 

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However … many do

Scaling up is really hard!! Local ecosystem matters a lot “Hard” infrastructure – industrial legacy  “Soft” infrastructure of networks, etc. 

Source: Travel Portland

Research question 

What are challenges and opportunities that food and beverage makers experience in scaling up and growing? How are they similar or different from those of other makers?  How do those factors vary across regions? 

Data and methods 

Subset of makers (N=21) interviewed for larger comparative study of Chicago, NYC, Portland  

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Focus on “maker-entrepreneurs”  

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“Maker Economy in Action”, Wolf-Powers et al 2016, http://www.urbanmakereconomy.org Plus handful of “maker-enabling” organizations serving food makers Making = Integration of design and production to make products for sale. Not hobbyists, not designers, although include some who contract out production

Semi-structured interview format Qualitative thematic coding procedure

Maker characteristics      

By city: NYC (13), Portland (5), Chicago (3) Product type: Food (14), Beverage (7) Founding year: 2008 or earlier (2), 2009-11 (12), 2012 or later (6) Employees: 1 employee (3), 2-9 employees (10), 10+ (8) Founder gender: Female (10), Male (10), 2+ founders (1) Founder professional background: 

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Business (8), Food service (6), Art & design (4), Other (3)

Location: All central city (ie, not suburban) Production: In-house (16), Contracted (5) Primary distribution: Wholesale/retail (16), Direct customer (5) Market reach: Local (4), Regional (7), National (4), Int’l (6) Growth trajectory: Growing (16), Stable (5)

Local Demand: Essential but Insufficient Common challenges 

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Particular food issues

Makers rely upon local demand to get their start At small scale, high price point poses clear tradeoff between niche market and growth

Regional variation

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Ubiquity of food makes it easy to get a toehold Limits to exportability for many products Ability to tap into both localism but also broader concern around “industrial food” to command price premium

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Size and wealth of local market

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Character of local “food culture”

Supply and Distribution Networks: Getting on the Shelf Common challenges 

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Particular food issues

Growth requires significant shifts in relationship to suppliers to ensure quality and consistency Lots of intermediaries – hard to know where to start Distribution via wholesalers carries opportunity but also risk Regional variation

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Fickle nature of ag inputs, especially for unique, local, organic ingredients No Etsy for food – greater importance of wholesale/retail Consolidation/fragmentation of food retail

Proximity to agricultural production Wholesale/retail distribution infrastructure for organic/artisanal products

Production infrastructure: The Quest for Affordable Capacity Common challenges 

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Particular food issues

Makerspaces provide low cost startup capacity Scaling up requires changes in production methods, and often location (firm, geography) Generational divide with SME production partners Regional variation

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Ubiquity of food production infrastructure – home kitchens, restaurants, commercial kitchens Presence of “co-packers” as contract production model more established in food

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Number of food incubators

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Cost/availability of industrial land

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Presence of existing food production infrastructure

Conclusions 

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Food offers most accessible pathway to growth and scale in “maker economy” Implications for Econ Dev interventions Demand: Local branding efforts  Supply/distribution networks: Technical assistance, gap finance  Production infrastructure: Affordable real estate, Brokering connections to at-scale producers, Support to grow in-house 

Thank you! Greg Schrock Toulan School of Urban Studies & Planning Portland State University [email protected] http://www.urbanmakereconomy.org