Part six of a series in which SFoodie asks the question: With the
Underground Market now shut down, what would it take for San Francisco's
aspiring food microventures to go legit?
Here's what it used to cost to sell your food at the now-defunct Underground Market: the cost of materials, the cost of paper to mock up a sign, and $50 to Forage SF, the market's organizer.
Here's a very rough estimate of what it costs to sell your food, completely on the level, at a regular farmers' market, assuming you'll need 16 hours at a commercial kitchen to prepare your first batch of legal food for sale: $1335 in permits and applications + $500 in insurance + $50 a day for the farmers' market fee + $320 in kitchen rent = $2205. And that doesn't including equipment and materials. If you're selling to a grocery store instead of customers, you could reduce your entry costs to $1295, but then you'll be selling the product at wholesale cost.
That's a massive difference.
"I could probably put on another market with all legitimate vendors from my vendor list and get them permited," says Forage SF's Iso Rabins, "but then we'd never be able to accept people who were starting up. The Underground Market is clearly something that needs to exist -- there are a lot of people whose lives are measurably different because of their participation in it."
The city seems to recognize this, too. Both Martha Yañez of the Office of Small Business and Richard Lee, director of Environmental Health, have told SFoodie their departments have been discussing how to help out the Underground Market and the many microbusinesses it fostered.
For Lee, the most important element of any legal plan is that vendors prepare food in a fully inspected commercial kitchen. "There are permitted kitchens in churches that may be very low-cost or free," Lee suggests, "or [Forage SF] could start a kitchen of their own."
What about the permitting issue? SFoodie asked Lee. Conceivably, could the vendors get together and form a co-operative that could share one kitchen and one set of permits? "It all depends on the model," he responded. "We haven't yet seen a group of people who say they want to create this facility where they want to cook. The closest thing is La Cocina. That's the kind of stuff we want to encourage."
When asked about the same option, Rabins said, somewhat guardedly, "I think that's definitely a cool idea for the future." Right now, he's focused on writing a business plan and scouting out spaces to host the next incarnation of the Underground Market. "We're going to start a commercial kitchen," he describes. "We want to create ways for the burden of running the space to not be on the kitchen users but to have several different projects that revolve around it, the heart that supports the whole."
But it isn't just a kitchen. Rabins continues, "We want to be able to tell people, 'You want to sell food? Here's a space to do it. If you want to create a business, we'll pull you through it.'"
He says he is currently looking at a 10,000-square-foot space in SoMa that would be big enough to hold a large commercial kitchen and classroom spaces. He envisions offering entrepreneurial classes to food vendors and cooking classes to the public, or putting together a CSA of products from participating vendors. Even then, Rabins isn't sure how to get around the high permit prices for new vendors, the highest in the Bay Area.
"I think that creating these spaces is important," Rabins says, "but you have to realize it's a capital-intensive project. It's expensive to build a kitchen. You have investors who want to get their money back, and staff, and you have to think of the space in a way that we haven't had to think about the Underground Market."
The full "Going Legit" series:
- Part 1: Getting a business license
- Part 2: Working out of a commercial kitchen
- Part 3: What's the minimum an Underground Market vendor would need to be legit?
- Part 4: Selling at the traditional farmers markets
- Part 5: Selling to grocery stores
- Part 6: The future of the Underground Market