What barriers might hinder the success of your project and how do you plan to overcome them?
Hot Bread Kitchen is in the midst of rapid expansion of our production and our training programs as we work toward financial sustainability. Since the beginning of 2011, we have increased our bread sales, and reduced our dependence on philanthropic dollars by 30%. As a result, we are on track to be completely funded through the sale of breads by 2015.
Our ultimate goal is to have our breads distributed nationally, with sales funding our workforce development programs in five cities. As with any business, replication of the model will present a barrier as we move toward national distribution of our products. By investing substantial energy in the establishment of our flagship site in New York, however, we will ensure that best practices are in place prior to replication. Furthermore, before establishing satellite sites, we will hire a specialty food distributor to ensure growth of our sales as we work toward national distribution. By taking on a trajectory of rapid yet sustainable growth, we will guarantee the integrity of our product and our training programs as well as the ultimate self-sufficiency of our model.
Tell us about your partnerships
Hot Bread Kitchen has partnered with various corporations, foundations and individuals in order to help support our activities as we become sustainable.
One of our longest running partnerships has been with Echoing Green. Since launch in 2007, Echoing Green has been an integral supporter of the work of HBK. After providing seed funding when HBK was founded, Echoing Green has continued to open professional and philanthropic networks for our organization. We have also been honored by the support of influential foundations including: the New York Women’s Foundation, the Rockefeller Foundation, the Liz Claiborne Foundation and the Hitachi Foundation. As we are a social venture, we have also partnered with several businesses for technical advising and financial support, including: American Express, J.P. Morgan, Vivaldi Partners. In 2009, HBK partnered with the New York City Council and NYEDC to build out a new 4,500 square foot commercial kitchen incubator in La Marqueta, a historic building in East Harlem. Most recently, we established a partnership with the New York City Investment Fund (NYCIF) to scale-up our operations.
HBK has also developed close, long-term relationships with the retailers and restaurants that sell our products such as Whole Foods Market and Dinex Group. Purchasing our goods each week, they invest in our product line and the viability of our business model. Additionally, these partners serve as placement opportunities for our bakers. After completing their training with HBK, we have placed two of our baker trainees at Dinex Group’s world-renowned Restaurant Daniel.
These ongoing partnerships have allowed us to build a varied network of contacts that we will share with the businesses we incubate and, most importantly, will help us to reach our ultimate goal of fiscal self-sustainability by 2015.
Explain your selections
Hot Bread Kitchen’s business model is based on the goal of being completed funded through the sale of multi-ethnic breads inspired by our bakers by 2015. As we work towards this goal of sustainability, we are supported by a diverse mix of funding streams: 50% through the sale of breads, 12% from corporate donations, and 40% from private donations (foundations and individuals).
As we move toward sustainability, we have been supported by various foundations, individuals, government agencies and businesses. Foundations such as Echoing Green and Eileen Fisher provided invaluable seed funding, while others such as the Freygish Foundation and the New York Women’s Foundation have provided ongoing support over the years. The New York City Council has also been an important partner to HBK, selecting us as the operator and anchor tenant of the new kitchen incubator in Harlem.
Hot Bread Kitchen’s ultimate goal is to completely fund our training programs through the sale of breads. We currently sell breads in over 40 retailers along the Eastern Seaboard 12 farmers markets. Hot Bread Kitchen’s breads are unique because we produce a line of international breads made using traditional methods and local and organic ingredients. Our varied multi-ethnic product line capitalizes on the growing trends of organic, artisan and ethnic goods. Businesses and customers have acted as valuable partners since launch by purchasing our products and helping us to decrease our dependence on philanthropic dollars.
How do you plan to strengthen your project in the next three years?
Over the next three years, we plan to become completely self-sustaining through the sale of breads. Since launch, we have relied on a mix of philanthropic support and bread sales. To ensure that we are on-track to become fiscally independent, we have aggressively moved into two sales channels: retail and Greenmarkets. In the first quarter of 2011 we have increased our sales 700% since the first quarter of 2010. We provide breads to 40 retailers including Whole Foods, Fairway and Dean & Deluca, and 12 of NYC’s Greenmarkets. The increased demand and distribution of our products has allowed us to offer new full time employment opportunities to the women who have trained with HBK.
Looking ahead we will increase our presence in both retail and Greenmarket channels. With 53 city-run farmers markets and many more being started by food entrepreneurs, markets are an important sales channel that we are only beginning to exploit. By 2012, we will begin working with a specialty food distributor who will ensure that we are getting the best exposure and shelf placement in the 4,672 grocery stores in the tri-state area. By continuing to scale up our sales through these two channels, we are on track to earn the $4M required to train 80 women per year and be completely self-sustaining by 2015. As we forge new relationships with the retailers, bakeries and restaurants we are supplying, we are fostering placement opportunities for our participants. We have already identified numerous external placement opportunities for leaders in the culinary field.