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Should you build a commercial kitchen?

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Farm-based food operations bring extra visitors and encourage those guests to stay at the farm longer. “The longer they stay, they more money they spend,” said Eric Nusbaum, Ph.D. of Wheelwright Consultants in Greenfield, MA. Nusbaum spoke at the 2013 Harvest New England Ag. Marketing Conference & Trade Show in Sturbridge. MA.

Commercial kitchens can be used to turn excess agricultural products into packaged foods or value-added products. Commercial kitchens are also needed to produce foods and meals for café or restaurant guests.

While capital intensive up front, commercial kitchens offer many income-earning opportunities. Like any farm enterprise, farmers should think like businesspeople and develop complete business plans before embarking on a project of this magnitude.

Careful analysis of all expenses including operational labor as well as the market potential will help determine the potential rate of return (ROR) or return on investment (ROI). Success also depends on a viable operational plan. Develop an optimistic, reasonable and pessimistic business plan. Can you make it under the pessimistic scenario?

Purchasing used equipment may reduce some costs. Be careful to check that used equipment will meets current fire and health department codes. Repairs on broken equipment may quickly eat up any savings.

Nusbaum recommends using a professional commercial kitchen rather than equipment suppliers for optimal operational efficiency and compliance with local rules and regulations. “This makes farming look easy,” said Nusbaum. His recommendation will be available in a future story called “Commercial and restaurant kitchen design.”

All commercial kitchen equipment must be approved by the National Sanitation Foundation (NSF). Costs are appreciably higher for commercial equipment. Heavy-duty equipment generally offers greater output and lasts significantly longer than residential equipment.

Café & Restaurant Sizing

Plan for efficiency. Design traffic patterns with loops rather than crossing traffic to minimize accidents and cross-contamination. Customer and staff access must be separate and not be through a barn, animal pen or muddy parking lot. Plan an efficient path and process to remove used dishes and trash.

Design for energy efficiency wherever possible. Nusbaum said restaurants typically use five to ten times more energy than office space.

Begin by deciding which meals will be offered, your typical menu and the typical number of guests. Each of these factors affects the kitchen, storage and equipment needs and size. Plan the style of service (wait staff at tables or counter pickup) and likely meal duration.

  • Sit-down dining will require 12 to 15 square feet/seat. 15% additional space is needed for arrivals, coat storage, cashiers, bathrooms and isles. Isles must be at least 5’ wide for wheelchair access.
  • Kitchen will need 7.5 square feet/seat not including storage or coolers.
  • Refrigeration storage requires 1 cubic foot/meal served/day. The lower 6” cannot be used by health codes. Ice capacity is one pound per meal per day.
  • Dry food storage requires 0.25 cubic foot/meal served/day.
  • Dry goods storage (paper, chemicals and used linens) need 0.25 cubic feet per seat.
  • One bathroom of at least 50 square feet is needed for every 75 seats. Check local building codes.
  • Additional space is needed for mechanical equipment (heating, hot water and air conditioning).
  • Plan an office.
  • Include a separate employee space with clothing lockers and a break area, etc.
  • Sprinklers are required in some states. Check local building codes.
  • Verify potable water, gas and waste water disposal capacity.

Capacity vs. Efficiency

Build for less than your peak capacity. Design so you can close off part of the dining area and save on utilities. The smaller space will feel more full and comfortable to your visitors. Plan service areas for fewer staff with multiple tasks on slower days.

Business

Nusbaum said 73% of restaurants are still in business after a year and 40% after five years. Many close over partnership, lifestyle or family issues. Financial miscalculations can include overly optimistic projections, lack of consistent meals, service and cost controls. Many operations require two to five years to achieve stable operations. Successful operations control costs, offer consistent service and delicious meals.

Nusbaum said sit down restaurants typically offer $32 square feet per person and spend $400 per square foot to get started.

Most operations need to grow $650,000 to $700,000 to beak event. Run your own feasibility study and market study to verify that the demand and customers are out there. Be sure you or develop a viable model.

Decide on your hours of operation to match customer demands.

Plan parking for customers and for staff. Plan circulation patterns and delivery access to kitchens near refrigerators/freezers and dry storage.

Meet Customer Expectations

“Customers want the farm experience without the farm experience,” said Nusbaum. “They really want the idyllic Disney version, clean and sanitized, without farm smells and noises,” he continued. They want clean bathrooms like McDonalds and mild temperatures – no smelly, blustery barns. Regularly pick up trash for cosmetic and pest reasons. Set our yellow jacket traps in season to minimize visitors’ risk of stings.

Customers want a personal experience. Ensure every visitor gets a prompt greeting within 30 seconds. If you will serve food, plan a system that allows customers to be served appetizers or other foods within 8 to 10 minutes. Plan staff training to deliver a great farm experience every time. Deliver what customers want. Meet their expectations and they will come back. If you exceed expectations, you will only raise expectations for their next visit.

If you sell produce or value-added products, offer them at comparable prices to high-end grocery stores like Whole Foods. Be sure you take credit cards.

Value-Added Products

Consider producing value-added products in your commercial kitchen during down times with your own excess farm products or those of neighboring farms.

Product labels must comply with federal and state regulations. Labels must include product name, ingredients in descending order, weight, handling information, perishability and expiration date, name and address of packer, nutritional information, portion size and presence of any food allergens.

Some stales like MA, RI and Ct have special rules for home kitchens or farm kitchen that allow limited value-added production for on-farm sales. Check with your local Department of Agriculture for details.

Learn More

Learn more at here or email Eric Nusbaum, Ph.D. call 413-774-2786 or 617-938-8668. You can also write Wheelwright Consultants at 15 Grove St., Greenfield, MA 01301.

For additional resources, email Bonita Oehlke, write her at the Mass. Department of Agricultural Resources, 251 Causeway Street, Suite 500, Boston, MA 02114 or call 617-626-1753.

Harvest New England

The Harvest New England Ag. Marketing Conference & Trade Show happens every other year. The 2013 event was held on February 27 and 28 at the Sturbridge Host Hotel in Sturbridge, MA. Learn more about the conference here.

The hands-on conference helped agribusiness leaders and staff improve their marketing techniques. Five workshop tracks addressed grower, value-added producer, new farmer, farm store manager, farmers market manager and, agricultural service providers. 26 workshops covered traditional marketing, social media, agritourism, financing/pricing, equipment and facilities. Over 80 trade show exhibitors demonstrated equipment, offered their services and shared delicious food samples. Special sessions addressed farmers’ market managers.

A similar story ran in the January, 2014 Eastern, Midwestern and Western editions of Country Folks Grower.

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