Center offers food startups a hand

UA-tied plant helps in preparation, testing, packaging

NWA Media/JASON IVESTER --12-17-2013--
Melissa Craig, owner/operator of Craig Family Farms, sorts shitake mushrooms onto a tray to be placed into a dehydrator on Tuesday, Dec. 17, 2013, at the University of Arkansas' Food Science Department in Fayetteville. The group is part of the department's Pilot Food Innovation Program.
NWA Media/JASON IVESTER --12-17-2013-- Melissa Craig, owner/operator of Craig Family Farms, sorts shitake mushrooms onto a tray to be placed into a dehydrator on Tuesday, Dec. 17, 2013, at the University of Arkansas' Food Science Department in Fayetteville. The group is part of the department's Pilot Food Innovation Program.

FAYETTEVILLE - Ryan Craig and his wife, Melissa, decked out in white smocks, hairnets and masks, look like surgeons as they cut locally grown shiitake mushrooms and prepare Arkansas Black apples for dehydration in a gleaming industrial kitchen.

It’s a typical Tuesday for the couple who own Craig Family Farms. They can be found at Arkansas Food Innovation Center’s pilot plant most weeks, preparing food, and packaging and labeling it so it meets state and federal requirements. They process about 150 pounds of mushrooms a week using the plant’s industrial-size dehydrator.

Though the Innovation Center has been dispensing advice about food regulation, safety and business requirements for more than a decade, it has recently became an incubator of sorts for small startup companies focused on food production.

About a year ago, the center’s pilot plant was approved by the U.S. Food and Drug Administration, allowing products to be processed there to be sold to consumers. Before that, businesses could research products and create test samples at the facilities, but they couldn’t sell the products because the plant didn’t have the appropriate credentials.

“We saw that as a hindrance,” said Jean-Francois Meullenet, who runs the Food Science Department of the University of Arkansas System Division of Agriculture, which oversees the center.

According to data provided by the U.S. Small Business Administration, in 2010, the most recent information available, there were 20,673 companies in the U.S. with fewer than 500 employees in food manufacturing.

In 2011, there were 38,505 firms run only by the owner with no employees in the food manufacturing sector.

Food-processing equipment can be costly, and relevant laws difficult and confusing to follow, causing budding food entrepreneurs to sometimes balk at the thought of building businesses, Meullenet said. But now, with the certifications in place, a handful of small food companies are using the pilot plant.

Arkansas’ cottage food law allows a limited list of food products to be prepared in homes without FDA inspections or other requirements. The products include some baked goods and jams and jellies, but they must be sold directly to the person who will consume them, either from the location where the food is made, or at a farmers market, county fair or special event. Otherwise, food companies have to adhere to federal and state food preparation standards.

The pilot plant has a full product-development kitchen, including a 10-burner gas range, convection oven, industrial-size refrigerator and freezer, and food-processing and juicing equipment. It also has gear for canning, bottling, vacuum packaging and labeling, including the software to make FDA-required nutritional labels.

The Craigs started Fayetteville-based Craig Family Farms a year ago and began working in the pilot plant in September.

The facilities allow them to market their products regionally and nationally. They sell them at farmers markets in Fayetteville, Springdale and Eureka Springs, and offer their products in some retail outlets, like Ozark Natural Foods in Fayetteville. The Craigs hope to have their products in more retail locations soon and plan to sell products online through an Amazon store.

The company’s offerings include shiitake mushrooms that are grown on logs at Sweden Creek Farms in Kingston, southeast of Huntsville, and Arkansas Black apples from Lakeview Farms in Booneville.

“We’d have to take out huge loans to have access to facilities like this,” Ryan Craig said of the equipment available at the pilot plant.

He said the folks at the Innovation Center helped them create the needed labels and packaging, develop the required records and establish a recall plan.

“Without this program, we could not have brought our products to market,” Craig said.

Helen Lampkin, founder of Rogers-based My Brother’s Salsa, said the center isn’t just for startups. She said the center’s staff and facilities allow her to research and test new product offerings.

“If you’re a well-established company, you can still get help,” she said.

Lampkin incorporated My Brother’s Salsa in 2003, and the company produced its first products in 2004. The company’s salsa is sold regionally in Whole Foods and Wal-Mart stores, and nationally through Fresh Market. It also can be found in grocery stores and independent operations.

Lampkin said she wished the FDA approval for the pilot plant had been in place when she first started her business. She speculated that My Brother’s Salsa would be even further along in development if that resource had been in place.

“It would have been so much easier,” she said.

Linda Nelson, the Arkansas district director for the Small Business Administration, said the Innovation Center and the pilot plant serve vital roles for new food businesses, giving them the capability to try products on a small scale and determine what consumers want without the need for large capital outlays.

She said the center is acting like a modern incubator for small food-based businesses, in a way similar to the ARK Challenge in Northwest Arkansas and the Arkansas Regional Innovation Hub in North Little Rock, which offer mentors, practical knowledge and equipment to help build and support particular types of businesses.

That’s a big change from incubators of old that might provide some office space and maybe a shared receptionist to answer a phone, Nelson said.

Meullenet said business owners interested in using the pilot plant first meet with advisers at the Food Innovation Center, who help them determine if their business plans are viable. The advisers then offer a wide variety of support. The center also offers the help of student workers who gain hands-on business experience.

He said the program was initially free, but small fees are now being charged to help recoup costs at the plant. But those fees will be kept low, Meullenet said, to keep costs down for the new food businesses, which face a lot of initial startup costs.

“Before they sell a single product, they have to write a lot of checks,” he said.

Business, Pages 63 on 12/29/2013

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