Kickstarting the food and beverage industry

KICKSTARTING THE FOOD

AND BEVERAGE INDUSTRY

Words by Anne Hardie

The Food Factory in Nelson is designed for entrepreneurs in the food and beverage industry to kick-start their business venture by hiring the facilities and getting advice from the voice of experience.

Founder of Pic’s Peanut Butter World, Pic Picot, instigated the idea and helped establish the facility, with the Provincial Growth Fund putting $778,000 into the $2.1 million project. A charitable trust was set up to run the facility, employing Brian Olorenshaw as a general manager who guides startup businesses or those expanding to the next stage. The facility opened post Covid-19 lockdown with its four commercial kitchens, a presentation kitchen, walk-in chiller, warehouse and staff amenities, which can be hired for a period of time. Olorenshaw likens it to a flatting situation, where flatmates have their own rooms, but share facilities and get together in the smoko room where they bounce ideas around, seek advice and learn from the experience of others. “People around the table have scar tissue and a few war stories and that’s beneficial. None of the problems and challenges are brand-new.” Tenants need to have their own food control plans in place, while people like Brian and the four trustees provide help with the regulatory minefield, marketing strategies, business plans, a food compliance consultant and most

The Food Factory general manager Brian Olorenshaw

importantly, contacts who can open doors for them. Pic is one of the trustees, along with former Horticulture New Zealand president, Julian Raine, Fresh Choice Nelson owner Mark A’Court and public relations and communications consultant Debbie Hannan.

Brian says tenants are selected for The Food Factory after their business idea, motivation and skills have been assessed. The reality is, not everyone is going to get a business idea off the ground, he says. One of the criteria for selecting tenants is the timing of their journey, and some need to go away and do the necessary due diligence first. They also need to have the confidence in themselves and their product to drive the business forward. “They need that entrepreneurial bent really. If they lack confidence in themselves or their product they are going to struggle. And unfortunately the statistics show:

50% 97%

OF SMALL BUSINESSES CEASE TRADING WITHIN FIVE YEARS OF BUSINESSES IN NEW ZEALAND ARE SMALL BUSINESSES WITH LESS THAN 20 EMPLOYEES

“Small businesses are the lifeblood of the economy, but we have this high rate of not progressing. What we’re trying to do is increase the odds of success by giving them the support and confidence so they won’t be in that bottom statistic. We want them to outgrow this space here and go into bigger and better premises. If they haven’t outgrown the space within two years, they haven’t succeeded.” Most small food businesses start out at home – Pic Picot began making his now famous peanut butter in his garage – and Brian says it can be a lonely, tough time if there’s no-one to bounce ideas off. The step after that is finding premises, and that can mean landlords locking them into two-year lease agreements. If the business fails halfway through, there’s still the rent to pay. The Food Factory is the bridge to get them to the next step when they are more established and ready to expand. While tenants still pay rent to cover the outgoings of the not-for-profit charitable trust, the timeframe is more flexible.

From opening they have had three longer-term tenants including start-up business Mad Melon, plus Little Beauties which is increasing the scale of its dried fruit business, and organic food deliverer Fresh2U which is an established business also in expansion mode. Businesses can also rent space short term for research and development, or use the presentation kitchen to show product to other people including potential buyers. All the tenants have taken on staff and Brian says it’s a good example of the Provincial Growth Fund working. Potentially, The Food Factory is a model that could work in other regions as well, though he stresses it needs people like Pic with the vision, passion and understanding of entrepreneurs to drive it.

When you get a roomful of entrepreneurs, anything can happen. They tend to spark off each other,” Brian says

“Entrepreneurs can see and sense an opportunity and can be very dogmatic about how they achieve or crystalise that. They are very focused on the outcome but invariably don’t see the pitfalls or challenges. Which can be a good thing. Ninety percent of us think about the problems and challenges and don’t do it. Quite often entrepreneurs have other people who will deal with the detail. “You need that person with the utmost confidence and commitment to overcome hurdles. They don’t run away at the first disaster. They have the laser focus to see it through. Quite often it is not the financial thing that is driving them; it is the thrill of the chase to get a desired outcome.” The Food Factory, he says, creates a mechanism for their ideas and dreams to come to fruition.