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Cooking Up New Businesses in The Hatchery

Link to article in The Aspen Institute

Cooking Up New Businesses in The Hatchery

APRIL 10, 2019  • BRAD MCCONNELL (CEO, ACCION SERVING ILLINOIS AND INDIANA)

While headlines tout a booming economy and low unemployment, many parts of the country still have not fully recovered from the Great Recession. What’s more, recent research shows that inequality within urban areas can be stark and that the divides in economic opportunity between neighbors even within a city can have lasting effects on their children’s futures. Addressing these inequities can expand opportunity now and help set up the next generation for success.

A new collaborative effort between two organizations in Chicago is working to address this challenge. Recently, my organization, Accion, teamed up with a local partner to launch an innovative new incubator to support local food entrepreneurs and create workforce development opportunities in a low-income neighborhood in our city. This new project combines in one home our lending expertise with the Industrial Council of Nearwest Chicago’s (ICNC) experience managing a manufacturing incubation space.

The Hatchery is a 67,000-square-foot facility on Chicago’s West Side that offers the facilities and training that help local food entrepreneurs turn their kitchen and business skills into livelihoods. Located in East Garfield Park, a neighborhood that is 90 percent black and has a median income of less than $25,000, the incubator is bringing new opportunity to entrepreneurs in the community and helping to build a network of successful businesses that offer jobs to local residents.

This collaboration sprang out of the realization that food and beverage firms were the largest industry sector served by each of our organizations. By combining our complementary expertise, we can deepen our impact. And, through partnerships with large food and beverage companies, we can raise additional funds and offer our entrepreneurs another potential customer: large food companies hungry for new ideas and innovations.

With food businesses, we faced a common challenge in helping these entrepreneurs grow microbusinesses into small businesses. For the communities we serve, food and beverage businesses make sense. These businesses use a skill that many have already honed in their personal lives: cooking. But while these entrepreneurs may have the skills and a ready set of customers, one of the biggest hurdles they face is accessing a kitchen that meets FDA food safety standards, which costs upwards of $100,000 to construct.

The Hatchery provides the facilities that these entrepreneurs need, alongside space for our organizations to offer them support to grow successful businesses.

While the need for this incubator was clear, a real estate investment of this magnitude creates a potentially huge risk for nonprofits of our size. To access the expertise needed to ensure we managed this risk correctly, we sought out other organizations that could help feed this dream. The City supplied land and financing, Alderman Walter Burnett Jr. and the Garfield Park Community Council offered insight into the neighborhood’s needs, IFF provided expertise on facilities financing and development, and a long list of community-oriented partners came together to share their expertise and resources.

After countless hours of discussion and negotiation, in January of 2018 our two organizations executed the agreement on the $34 million project. Then, after a year of intense construction, Mayor Rahm Emanuel helped open the doors in December last year.

Filling in a lot that sat empty for 50 years, The Hatchery facility offers 54 private kitchens for rent, dry/cold storage, loading docks, and meeting spaces.

With this space, we bring our core business coaching directly to where the entrepreneurs work, including managing cash flow, planning, and understanding balance sheets. We are also providing capital, in the form of loans between $500 and $100,000, to help these entrepreneurs start or grow these businesses and using our online services to help them build valuable connections. The Hatchery also provides workshops and seminars to help educate entrepreneurs on everything from marketing to legal and insurance needs.

Even more, The Hatchery offers a workforce development program that helps adults in the community connect to the jobs these entrepreneurs are creating. The Hatchery will also help to build community in the neighborhood, by offering a partnership with the Garfield Park Neighborhood Market. Together we will provide space and power for vendors to sell healthy local produce and products in food desert and supporting a place for people to commune.

And, in partnership with Chicago chef Rick Bayless, we’ve created an eight-week training program that helps young people become chefs at the some of the city’s top restaurants. Open to young people ages 16-24, the training leads to a one-month internship in one of the best restaurants in Chicago, and the opportunity for a permanent, full-time line chef position after successful completion of the program.

The launch of The Hatchery is just the beginning of an exciting new partnership that will unearth and incubate talent and ideas that build on an already vibrant food culture in the community it serves.

We’re looking forward to seeing the new opportunities that this opens for the East Garfield Park neighborhood and what local entrepreneurs are able to do for their community. We welcome dreamers and doers to build great businesses and careers on Chicago’s West Side for decades to come.

 

About the author

Brad McConnell is the CEO of Accion Serving Illinois and Indiana, a member of the Microfinance Impact Collaborative, a group of leading microlenders convened by FIELD from across the country committed to informing, strengthen, and accelerating the impact of their work.

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