Retail N Illinois

Food businesses fuel Chicago’s retail sector

Food businesses fuel Chicago's retail sector,ph01

Not all retail is dying. One category that is seeing more successes than failures today? Anything to do with food.

Fast-casual restaurants such as Chipotle and Which Wich Superior Sandwiches are drawing in a steady stream of diners. High-end grocery stores are seeing their business soar.

That’s why the latest project from Chicago-based design firm Wight & Company, a food incubator in the East Garfield Park neighborhood of Chicago, is so welcome.

The incubator, dubbed The Hatchery, will serve entrepreneurs in the food-and-beverage industry who need commercial kitchen workspace, coaching and other services to boost their businesses and produce their products.

The 67,000-square-foot incubator will include 56 private kitchens, a large shared kitchen, co-working spaces, multi-function areas, bulk storage and a loading dock.

To create this development, Wight’s team is repurposing an existing building that dates back to the 1920s and building a modern structure of about 57,000 square feet.

Matt Zolecki, project executive with Wight & Company, said that the time is right for a project like the Hatchery, and that the success of this project can provide a boost to the entire city.

“What really sets this project apart is that it is geared toward providing assistance to entrepreneurial businesses that are in the intermediate stages of their growth,” Zolecki said. “They might have outgrown their home kitchens but aren’t necessarily ready for brick-and-mortar because of costs and other factors.”

The objective of the Hatchery is to provide these businesses with that turnkey space that so many of them need along with a rentable private kitchen space.

The facility, which will cost $34 million to build, is also expected to create about 150 jobs in its first year of operation. Construction of the Hatchery is expected to wrap in 2018.

The Hatchery is designed to offer maximum flexibility to its tenants. Zolecki said that some entrepreneurs here might not be ready to lease or rent one of the facility’s private kitchens, which vary in size. Those who aren’t ready for this financial commitment can instead take advantage of the facility’s shared kitchen, Zolecki said.

The shared kitchen is a larger commercial kitchen in which entrepreneurs can rent table space, a more affordable option than leasing an entire private kitchen area.

“Entrepreneurs, then, can use a large commercial kitchen that they might not have access to otherwise,” Zolecki said. “Others might want to try out the shared kitchen space before they take on the higher expense of leasing a private kitchen here.”

Zolecki said that there is an altruistic bent to the Hatchery, too. As he says, part of the facility’s goal is to spur commercial growth in the facility’s surrounding community. This doesn’t mean just construction jobs during the building of the facility, but also permanent jobs.

The hope is that the Hatchery also brings more new restaurants and food businesses to both the Garfield Park neighborhood and the rest of the city. That, of course, is the goal of any incubator project.

In an earlier statement, Chicago Mayor Rahm Emanuel said that the Hatchery should provide further fuel to Chicago’s growing food-industry market. The city is already home to such industry leaders as McDonald’s, Conagra Brands, ADM, Mead Johnson, Beam Suntory, Kraft Heinz, Oscar Mayer and, most recently, Peapod.

Chicago’s food and beverage industry is currently the second largest in the nation with 4,500 companies, 130,000 employees and $32 billion in sales, the mayor said. Food manufacturing accounts for the majority of the industry’s regional employment and over a third of sales.

Members will also have access to loans from Accion, a micro-lender that is planning to relocate within the Hatchery.

“Accion Chicago is thrilled to help bring the Hatchery to Garfield Park so that we can better serve Chicago’s food and beverage entrepreneurs,” Brad McConnell, chief executive officer of Accion Chicago, said in a statement. “From the West Side, Accion Chicago will continue to provide the capital, coaching and connections to help entrepreneurs grow throughout Illinois and Northwest Indiana in a multitude of industries.”

The project was supported by $8 million in city funding plus support through the New Markets Tax Credit. The Hatchery is also receiving support from the Kellogg Company, Conagra Brands, Griffith Foods, The Lukas Walton Fund of the Walton Family Foundation, The Pritzker Traubert Foundation and The Coleman Foundation among others.

“Conagra Brands is excited to drive food innovation in Chicago and beyond, and developing deeper connections with local entrepreneurs through The Hatchery is a key component of our success,” Darren Serrao, chief growth officer of Conagra Brands said in a statement. “With startups operating in more than 50 private food-grade production spaces under one roof, we’ll have the opportunity to more efficiently collaborate and fuel the city’s thought-leadership in food.”