It’s summer event season in Portland, so food businesses are feeling good, energized by the feedback and sales. But behind the scenes, founders are still wondering if they can truly keep it going, despite their innovation and creativity.
Food businesses are facing serious compression. Covid-related supply chain issues increased the price of everything and staffing issues remain.
Over the past months, three more local food businesses announced their closings on our community forum, the PNW Packaged Food & Beverage Group. Trying to hold on for months or years, through loss of contract manufacturers or key staff, they just couldn’t figure out how to do it any longer.
In the food business, we are led by passion and creativity; we are fueled by community and a desire to change the food system. But the path is a difficult one. When an entrepreneur chooses the path of system change — of sourcing directly from farmers, of making a fully organic product, of going plastic free — they’ve chosen the path where the systems don’t exist or are designed for scale.
As I consider the businesses that I have helped birth and steward, I wonder about their future.
The options seem to be stay small: self-manufacture, self-distribute and sell direct to consumer, aka keep your margin, or, go big: raise capital and buy market share. Where and how do we forge a middle path? A middle filled with medium-sized manufacturers that support good jobs and sustainable lives for founders while keeping their connection to regional farmers and consumers.
THE PBJ'S HOW OREGON WORKS FOOD AND BEVERAGE STORIES
How Dungeons & Dragons could help reshape Portland's bustling food and beverage scene
Burgerville teams with Felton & Mary's to sauce this year's Walla Walla onions burger
How Oregon Works: Poached CEO on restaurant hiring and gig work
There is more support than ever for food businesses in Portland. When we launched Better Bean Co. in 2009, there were just two organizations supporting food businesses. Now there is a plethora of support at all stages of business growth. Founders can receive subsidized business coaching and services of every type, including headshots and co-pack test runs, through Prosper Portland’s Inclusive Business Resource Network.
It is truly wonderful that we have a culture of sharing experiences, resources and connections, but if margins keep getting compressed, free advising won’t keep a business solvent.
Portland became a great place to launch a food business because we had cheap rent, public transportation, access to amazing agriculture and a community that loved good food. It was easier to live a good life on the little that came from a packaged food business. Moreover, the cost of scaling was doable.
Now businesses look to scale and balk, they survey the options and wonder: “How can I afford the storage and rental costs, let alone the utilities?” I learned this week that the rent for a commissary kitchen that served the growth of an iconic fast casual chain in Portland is now twice what it was a decade ago. How do we continue to build iconic Portland food businesses given this jump in cost?
The community of landlords and brokers needs to take a hard look at what type of city they want for our future. The city needs to think through utility costs for food processors that are heavy water and electrical users. It’s no secret that our suburban neighbors are attracting most of the manufacturing. In food manufacturing every penny counts.
Food businesses are a potent and essential part of the Portland fabric: Food is what makes Portland, Portland. It’s time the city subsidizes the good food ecosystem. If we want food businesses to continue to launch and grow in Portland then we need to show them we appreciate them being here. Could we think of food processing and distribution as a public good? What if good food processors had lower utility rates? Weren’t taxed as heavily? All because we know these businesses give back in more tangible ways through shifting climate realities and building a resilient local food system.
If we truly love this local food maker ecosystem, we need to support it and all the people that show up every day to build it, to grow it, to make it. My call to Portland is to support those businesses whose products we love, to use them, eat them and enjoy them fully.
