Asheville Local Lab Recommendations Development

Taking action that will impact the whole food and beverage manufacturing ecosystem in Western North Carolina requires clarity on where and how to invest time, social capital, and financial resources.

A set of recommendations for actions – such as new strategies, initiatives, infrastructure investments, shared resources and more, co-created by stakeholders from the community – helps define a shared vision of what support can look like, helping them move forward on industry and community vetted solutions.

The following recommendations were generated by compiling a list of opportunities and strategies uncovered during interviews, group discussions, and an in-person gathering, engaging over two hundred local stakeholders. The full list was organized and sorted to identify overlapping concepts and ideas were then combined. Mechanism gathered feedback on the recommended actions via interviews and online surveys in order to fully vet the possible solutions. We selected the final set of actions based on this feedback.

When implemented together, these strategies intentionally build on one another, respond to businesses at different scales and stages of development, achieve multiple impacts, and can overcome multiple challenges simultaneously.

Taking action that will impact the whole food and beverage manufacturing ecosystem in Western North Carolina requires clarity on where and how to invest time, social capital, and financial resources.

I. Amplify and make more accessible the “power of peers.”

Well-established business owners are often asked “How did they do it?” by aspiring and early-stage entrepreneurs looking to get a foothold in the region. At the same time, successful business owners often feel isolated, working in the silo of their own company. When facing a major challenge or decision point they too would like to connect with their local peers or mentors to learn how they have navigated similar challenges. And these struggles are amplified even more if you are new to the region and/or the industry. These challenges to connect and learn from another leads to wasted time and resources and redundant problem solving by each business operating on its own.

Key Strategies

Establish a mentorship program specific to food and beverage manufacturing that offers mentors with industry-specific expertise.
Establish two learning cohorts: one for aspiring and early-stage food and beverage companies and one for more established companies looking to grow or pivot.

Strategy Outcomes

Increasing connections between business owners will help new owners build their businesses with confidence, while also learning the ins and outs from pioneers in the region and industry. More established businesses will benefit from fresh peer perspectives and supporting others so they might avoid the same pain points, resulting in a stronger manufacturing sector for the region.

Stakeholder Feedback

Over 63% of respondents indicated support for a sector-specific mentorship program and many highlighted a possible leadership role here for the recently revived Asheville Area Food Guild.
Respondents highlighted many existing organizations’ programs in the region that are industry agnostic, but that might be collaborators for a consumer packaged goods or food and beverage-specific offering (including Mountain BizWorks , Venture Asheville - Elevate, SCORE Asheville, AB Tech Small Business Center, Western Women’s Business Center, and SBTDC at UNC Asheville).
We Power Food offers food industry support and programming focused on female business owners in the Piedmont region and throughout the state.
Shared kitchens and support organizations with limited capacity could benefit from an early-stage program that could address industry-specific requirements around licensing, regulations, food safety, labeling, and more.
Given changing public drinking habits, multiple respondents highlighted the need to support breweries pivoting to new business models or revenue streams.

Existing models to learn from

Good Food Accelerator offers four different cohort programs along with one-on-one coaching services for food businesses.

Brewing the American Dream provides support for brewers and other food and beverage businesses, with offerings ranging from bootcamps, to coaching and pitch events, to loans.

The Hatchery hosts an incubation cohort and provides workshops and consulting services.

Hot Bread Kitchen offers three different programs for food entrepreneurs at different scales: Seed, Start, and Scale.

Proof’s Consumer Packaged Goods Initiative is based in Tennessee and offers mentoring programs and on-demand virtual resources.

Startup CPG is a national community of CPG businesses with a very active slack channel.

Made in Baltimore is a local brand and support organization for product-based businesses.

II. Advance shared understanding of regional capacity for contract manufacturing, ingredient processing, and production spaces.

For those who want to do in-house manufacturing, a big barrier is finding the right-sized space to match production needs. Purchasing dedicated facilities, paired with the cost of custom build-outs, is often out of reach for most small businesses. For food and beverage businesses who don’t want to do in-house production, a different challenge arises: It is difficult to find the right co-packers or co-manufacturers, within the region, that offer the right-sized batch production. And for companies interested in sourcing local grown resources (for in-house or out-sourced manufacturing), there is limited insight and access to processing facilities to turn raw fruits and vegetables into ingredients for streamlined production.

Strategies

Create a regional manufacturing space resource map that includes zoned properties currently or historically used by food and beverage manufacturers; existing food and beverage manufacturers; and former food and beverage production spaces that are unused or underutilized.
Create a regional contract manufacturing capacity map that includes contract manufacturer profiles that list capabilities, contract expectations, order max and mins, ingredients they can work with, and secondary services such as material purchasing.

Strategy Outcomes

Increasing visibility of food processing and contract manufacturing services, as well as physical spaces currently used for food and beverage product development and manufacturing, will reduce time and effort for individual businesses while increasing business-to-business commercial activity.

Stakeholder Feedback

Nearly 60% of respondents indicated a regional manufacturing space map would be valuable. Respondents indicated the importance of any database or map being live and regularly updated, rather than a one-time static exercise.
In addition to high price points for commercial real estate near or in Asheville, respondents also highlighted the amount of available space tied up by speculative property owners who lack the motivation to lease it out in the short-term.
There is a huge amount of variability in the quality and readiness of vacant spaces, so it would be important to identify those well-suited for food and beverage manufacturing and/or those requiring less buildout investment.
Beyond just a resource map, there’s interest in both events to highlight those in the region providing co-manufacturing services and education for those interested in offering co-manufacturing to complement their own self-production efforts.

Existing models to learn from

SF Made created a Real Estate Guide and maintains active real estate listings for spaces well-suited for production space.

Center for Regional Agriculture, Food, and Transformation (CRAFT) houses a GIS based Regional Food Systems inventory.

Appalachian Harvest Food Hub & Herb Hub provides aggregation, distribution, sales support, and technical assistance to farmers and growers.

Keychain utilizes AI to help brands and retailers find manufacturers and supply chain partners.

III. Increase technical training and assistance for food and beverage manufacturers.

Many food and beverage makers get into production without a deep understanding of food and beverage manufacturing processes and technologies. There is a common journey of starting in one’s home kitchen and doing everything by hand. But increased orders force business owners to invest more time, continuing to do it by hand, or pay more people to lend more hands. Luckily, there are many tools and techniques for production at many different scales. However, most business owners struggle to find the time to learn and evaluate those options. During product development, other barriers arise such as creating recipes for scaled production. During supply chain development, owners often struggle to find affordable ingredients or equipment. These challenges exist for both companies that strictly produce their own goods and those considering contract manufacturing.

Key Strategies

Create an accelerator program for existing businesses to each get a personalized production assessment, along with access to a team of experts to support implementation of improvements.
Organize a mobile, on-demand team of technical service providers that offer expertise in multiple parts of the manufacturing process.

Strategy Outcomes

By offering industry-specific technical assistance, educational materials, and learning opportunities, business owners can build their confidence in making investments in technology and staffing and keeping the quality and taste they strive for in larger batch production. Offering shared education opportunities increases business owner support systems and resilience, while reducing time spent by staff at shared kitchens and support organizations.

Stakeholder Feedback

70% of business owner respondents expressed interest in a personalized production assessment with access to a team to support implementation.
Many existing business owners expressed the need for more personalized industry-specific support and expertise, especially before or during growth spurts in their business.
Many highlighted existing resources that might be better leveraged to support WNC businesses more effectively, such as NC Food Innovation Lab, NCSU and NC A&T.
Support is needed for businesses to navigate commercial leases and understand the relevant regulations for food manufacturing at different scales. Some also highlighted the need to educate and convince property owners to allow tenants to utilize their facilities/properties for food or beverage production.

Existing models to learn from

Food Ops offers technical support for formulation, production, supply chain, and co-manufacturing needs.

Ohio’s Manufacturing Extension Partnership (MEP) CIFT offers assessments and support for food manufacturers and has a network of service providers with food production expertise.

Small Scale Food Processor Association (SSFPA) offers technical programs and virtual on-demand learning offerings specifically for food processors and manufacturers.

IV. Create shared resources for business services, purchasing, staffing, and more.

All food and beverage manufacturers utilize non-production based skill sets including: sales, marketing, bookkeeping and accounting, purchasing, fulfillment, regulatory and compliance, forecasting, distribution, and capital project planning. The majority of small-scale businesses, and even some large businesses, don’t have the resources to hire for all these skillsets, full time, part time, or even on a contract basis. This means business owners end up investing lots of personal time learning these skills, making costly mistakes, or spending time on these activities when they could be more effective elsewhere. Parallel to limited staffing for small businesses is limited purchasing power. Many small businesses also struggle to source ingredients and packaging at a reasonable price point given their small scale, leading to smaller margins and higher price points for customers.

Key Strategies

Create a collaborative distribution approach to support businesses with similar product needs or sales accounts in the region.
Develop a cooperative staffing model focused on shared technical assistance resources for: sales, marketing, distribution, bookkeeping, accounting, fulfillment, forecasting, developing capital projections, etc.
Create a cooperative purchasing strategy for ingredients and packaging.

Strategy Outcomes

By investing in business services and back office support companies can save money and time, while focusing more on their unique offerings and growth strategies. By pooling together to source common ingredients or packaging needs, businesses can benefit from better margins. With shared industry-specific staff or contractors, businesses can benefit from more effective management of suppliers, distributors, client accounts, and business development.

Stakeholder Feedback

55% of respondents believed a shared distribution effort would be impactful, especially since many are engaged in self-distribution in some capacity.
65% of business owners thought either a cooperative staffing/contractor model and/or a shared purchasing strategy would be beneficial for the region.
The logistics involved with cooperative and aggregation efforts are paramount to its success and would benefit from a shared, centrally located facility.
Existing distribution channels focused on produce and farms could potentially be expanded and utilized for value-added and CPG products.
Owners identified the need for a better labor pipeline that involves training and vetting production staff, while exposing them to different work environments at regional food and beverage producers.

Existing models to learn from

Swamp Rabbit Cafe Food Hub is based in Greenville SC and sells and distributes food from over 300 farms and makers to restaurants, retailers, schools, and more.

The Common Market is a mission-driven distributor of sustainable, local farm foods with a southeast hub based out of Atlanta.

The Wisconsin Food Hub Cooperative is a farmer-led cooperative owned by the producers and the Wisconsin Farmers Union that includes cold storage and transportation.

Commonwealth Kitchen operates a shared kitchen and runs a fully-licensed food manufacturing facility with a skilled kitchen crew and large capacity equipment.

Western Mass Food Processing Center develops and produces value-added products and also offers co-packing and prototype support.

V. Establish manufacturing infrastructure focused on “second-stage” business needs.

There are limited commercial and industrial properties in the Western North Carolina region that are ready and equipped for companies to move into as they find success and scale up. The same is true for raw ingredient processors, logistics providers, cold storage warehousing, and distribution. A large percentage of prior manufacturing space was located along the Swannanoa and French Broad Rivers which were dramatically impacted by Helene. These limited resources and services have created bottlenecks and competition between companies seeking similar resources, and severely limit the growth of companies that want to keep production local.

Key Strategies

Develop a “second-stage” multi-tenant manufacturing facility with multiple independent production spaces under one roof that share key infrastructure such as loading docks, cold and dry storage for finished products, fulfillment and mailing, etc.
Develop a regional cold storage facility for raw ingredients and finished products.

Strategy Outcomes

By investing in and enhancing commercial and industrial property to market to the food and beverage community, companies can more effectively transition their companies to larger scales of production. Also by establishing co-owned and/or affordable cold storage, warehousing, and processing facilities, multiple businesses (operating in value-add manufacturing and agriculture) can reduce their investment needs while gaining access to key supply chain services. This investment could also help address distribution challenges by creating a centralized location for pickups and deliveries. Finally, by creating better infrastructure to serve companies in the region who have grown to a certain scale, we can minimize businesses being forced to go outside the region or country to achieve a larger scale.

Stakeholder Feedback

Nearly 70% of respondents indicated the need for a larger, second stage shared production facility that ideally also offered extensive dry and cold storage.
Many highlighted how WNC Foodworks and Blue Ridge Food Ventures currently provide a great starting place, but businesses with larger production needs have few options besides building their own facility or finding a co-packer/co-manufacturer outside the region.
Key considerations to take into account early on include: food safety regulations and wholesale certifications, cold storage and humidity controlled dry storage, proximity to a highway, being located within range of Asheville, and the cost of buildout and maintenance.

Existing models to learn from

Alberta Food Centre is a 150k sq. ft. multi-tenant shared facility with up to 9 individual leasable processing suites.

Rutgers Food Innovation Center is a USDA- and FDA-inspected processing facility that provides over 50k sq. ft. of manufacturing, storage, laboratory, and training facilities.

The Hatchery is a 67k sq. ft. production facility which includes shared and private commercial kitchen space, cold/dry/freezer storage, loading/receiving docks, food truck servicing, coworking space, meeting rooms, event space, and on-site support.

The Industrial Commons is located an hour outside of Asheville in Morganton and is committed to a circular, inclusive economy through worker-owned cooperatives, sustainable textile manufacturing, and community development.

Warehouses4Good is a nonprofit that helps communities plan, build, and operate the facilities needed to store, move, and share food.