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Cottage-industry food companies find recipe for growth

Breana Noble
The Detroit News

Small-time makers of craft foods — fine jams and jellies, drinking vinegar, vegan popcorn — are expanding from their cottage-industry roots in southeast Michigan.

David Beckwith of Toledo tries samples from Kristin Smith and Ederique Goudia, right, at their Eastern Market booth.

Fueling their growth is the support of the Eastern Market Corp. and a Michigan law that exempts entrepreneurs from licensing and inspections.

“We wouldn’t have been able to grow our business without the market,” said Molly O’Meara, who along with Noelle Lothamer began Beau Bien Fine Foods, a jam and fruit preserve company, after Michigan enacted its Cottage Food Law in 2010.

The act allows startup companies to sell homemade foods that don’t require refrigeration, so long as their sales are less than $20,000 annually.

“There was almost zero barrier to entry,” Lothamer said. “That allowed us to build our following and our brand without having to invest much.”

Mike DiBernado, Eastern Market’s director of food innovation programs, said many of the 200 summer peak-season vendors got their start under the Cottage Food statute. He said it’s a good opportunity to test-market a product, and the Eastern Market provides low-cost entry to do that. Spots in the market lease for $110 each Saturday during prime season, when up to 80,000 people a day visit.

The nonprofit corporation also assists businesses with their Michigan Department of Agriculture and Rural Development license, which it encouraged Beau Bien to get.

“As (cottage food operations) sell their product, they’ll start having opportunities to sell product hopefully at different venues,” DiBernado said. “We help them get licensed, and they can sell to different chains of commerce.”

Bieu Bien got its first retail deal with Carmela Foods Inc., and it now sells at 150 retailers in Michigan and Ohio. As Beau Bien grew production, Eastern Market was there to help, O’Meara said.

“When we were ready to start buying a lot more fruit, we were able to go to the market, and their staff was able to help us find direct connections with farmers,” O’Meara said.

A growing market

The Eastern Market’s 2025 strategic plan seeks to quintuple the district from its roughly 43 acres, repurposing blighted homes and commercial warehouses east and north of the Dequindre Cut for food processing, distribution, wholesale and warehousing. It will also include office and residential space.

“We either have to find places for (businesses) to expand, or they’ll leave the market and find areas in the suburbs,” DiBernado said.

About 25 companies have already expressed interest in setting up business in the expanded space, said Dan Carmody, Eastern Market’s president. In November, Beau Bien left a commercial kitchen at Hopeful Harvest, the for-profit arm of Forgotten Harvest, to rent its own kitchen — and, eventually, a tasting room — on Ripiolle Street.

“Eastern Market is an ideal location for us, being the food hub and that we have this relationship,” Lothamer said. “Of any neighborhood in the whole city, it was my No. 1.”

That’s because the district attracts so much foot traffic, she said: “Even at our stall on Saturdays, we get a lot of people coming from out of state, even from other countries.”

The tourism is what Jess Sanchez McClary likes about the market. This self-proclaimed “serial entrepreneur” owns McClary Bros., maker of “shrubs,” a Colonial-era drink mixer using apple-cider vinegar.

McClary Bros. began as a bakehouse under the Cottage Food Law in 2012. Once she learned about shrubs, McClary moved to Hopeful Harvest and eventually dropped baking.

“The only place to go was to open a bakery, and I didn’t think I could scale it any larger,” McClary said. “With the vinegars, I knew it could.”

Shā La Cynt’s Personal Chef & Catering owner Cynthia Davis and husband Greg fill bags of the company’s vegan “Movie Theatre Cynt-sation” popcorn that is made using olive oil and pink Himalayan sea salt.

Exposure, growth potential

The company now distributes to 1,000 stores in 27 states, including its Ferndale shop. McClary pitched her business to investors on the ABC reality show “Shark Tank” in September, and although she didn’t score a deal, the business got national attention.

McClary Bros. started vending at Eastern Market in 2014, finding stability in selling and sourcing, McClary said: “We got plugged into the people. If we needed to find a new provider for an herb, they knew four or five suppliers.”

Cynthia Davis owns Shā La Cynt’s Personal Chef and Catering and said the market is a strong community of business owners. She makes 10 flavors of vegan popcorn under the brand Cynt-Sational Popcorn Co., selling 4-ounce bags at Eastern Market. She got started in 2013 after her sons’ teachers tasted her popcorn and convinced her to try selling it.

Davis was the first to work in Detroit Kitchen Connect in Eastern Market’s renovated Shed 5 in 2015. It’s a community cooking space used by about 20 entrepreneurs.

“Seeing the growth of the space is tremendous,” Davis said. “It’s for businesses determined to be a part of the heartbeat of Detroit’s comeback.”

Davis now sells Cynt-Sational Popcorn at Whole Foods Markets in southeast Michigan; it soon will be at all of the grocery chain’s Michigan locations. She hopes to hire a part-time and full-time employee in the future.

Beyond the kitchen, Eastern Market helps with marketing, Davis said. Although she uses social media to spread word about her company, the market is a “recognizable brand with consumer acceptance,” DiBernado said.

After one buyer tried her popcorn on a market Saturday, he became such a fan that he had a friend give her business a shout-out on the radio.

“I couldn’t believe it,” Davis said. “I put so much hard work into not just making a great product but into my customer. They’re taking a piece of me with them. At Eastern Market, I can engage with them, and it’s a joy.”

bnoble@detroitnews.com

(313) 222-2032

Twitter: @RightandNoble