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Published in Food/Agribusiness
Breakfast tacos are a specialty at Grand Rapids food startup Basalt. Breakfast tacos are a specialty at Grand Rapids food startup Basalt. COURTESY PHOTO

Food startups lean on farmers markets, pivot sales to adapt to pandemic

BY Sunday, September 13, 2020 04:40pm

Steven Martinez-Thiel put together a detailed timeline that would transform his love and expertise of breakfast tacos and Tex-Mex fare into a new food business.

The native Texan who relocated to Grand Rapids planned a small-scale launch at a local farmers market in late winter followed by brief time off for his own wedding. He planned to then return in the spring to focus on catering opportunities to generate the revenue and interest needed to reach his ultimate goal: a brick and mortar establishment.

COVID-19 had other plans.

“I spent the winter basically in development, doing recipe tests and just kind of forming ideas and figuring out what it would look like,” said Martinez-Thiel, a veteran of the restaurant industry and founder of Basalt. “We launched at the beginning of February. I sold my first taco either the first or second weekend in February, which was really exciting. We did the second season of the Fulton Street Farmers Market — their winter season there. It was a nice small launch, which was great because I didn’t really know what I was doing. It was a manageable size.”

The struggles that would ensue were not unique to Martinez-Thiel. While the pandemic-induced hardships of local restaurants, bars and hospitality businesses have been widely publicized, companies like Basalt — food businesses still in the incubation phase — had to grapple with problems all their own.

For freshly-minted Basalt, the first hurdle to clear was simply figuring out the appropriate time to open back up.

“I spent about two months just trying to figure out the right time to open and how to open responsibly and figure out if it was even responsible to return to work,” said Martinez-Thiel, who has two employees at his business. “We came back to the farmers market in the middle of May and I’ve been doing it since.”

Farmers markets prove crucial

For Martinez-Thiel, whose business operates in the Grand Rapids Downtown Market’s incubator kitchen, the farmers market was crucial for distributing his products and educating Midwesterners on a food that is overwhelmingly popular in Texas. In addition to his signature breakfast tacos, Martinez-Thiel also makes sandwiches and fresh salsa and is testing out other items at the Fulton Street Farmers Market.

Maintaining this touch point with potential clients was even more important to Basalt’s business model because catering opportunities — frequently used by young food businesses to gain exposure in the competitive food market — came to a grinding halt with social distancing guidelines all but wiping out gatherings and events.

Martinez-Thiel said he received some inquiries throughout the summer for fall weddings and other events, but of roughly a dozen inquiries, he only furnished four quotes and ultimately booked just two engagements.

And since Basalt focuses on a hot product, even e-commerce wasn’t a viable avenue, leaving the farmers market as his primary hub.

Despite finding shelf space in health food stores spread across the country, including Harvest Health Foods locations throughout Grand Rapids, the success of Hannah Raycraft’s food business also hinges on local farmers markets.

Raycraft is founder of Spera Foods, which produces food with Tiger nut as the central ingredient. Tiger nut, which Raycraft personally encountered when she was studying abroad in Germany, is a super food that is growing in popularity and is not a nut, rather, the root of sedge grass. Spera Foods produces a range of products from Tiger nut flour to various granolas.

In years past, Spera Foods has leveraged multiple farmers markets — including the Holland Farmers Market — to get its products to the general public.

That some farmers markets have suspended operations over COVID-19 concerns and others have limited crowds has had a major effect on Spera Foods, Raycraft said, estimating that farmers market sales have plummeted around 75 percent. The product often benefits from face-to-face interaction and through samples to curious customers.

“There is the education piece because we have a more unique product,” Raycraft said. “It definitely helps having that time where they’re standing there trying a sample where you can talk to them about what it is. Now people don’t want to gather as much.”

Pivoting and other lifelines

Both Martinez-Thiel and Raycraft say supply chain woes have been fairly limited throughout the pandemic.

“I think I’m small enough, and my menu is limited enough, where I was lucky to not face too much of that,” Martinez-Thiel said. “The things that I have a harder time sourcing are the speciality items like tempeh or tofu that I use for my vegan products.”

The central issue for these small businesses has become finding the best avenue in which to distribute.

Raycraft uses Amazon for digital sales fulfillment and distribution. She said sales were strong before the pandemic and then rose early during it before she had to restock. Raycraft said she has struggled to get Amazon to treat her small food business as a priority, underscored by the fact that she sent hundreds of bags of product in July that are still being processed at a fulfillment center. This means her stock for online orders is still empty.

“People are ordering more online, now is a great time to be pushing that, but because Amazon is being so slow, I’m at a weird place where I’m thinking if I should start self-fulfilling again,” Raycraft said. “Shipping is so expensive if you’re not using a network.”

Meanwhile, grocery stores have proven bulletproof throughout the pandemic, making them a viable avenue for small food businesses that are able to get a foothold.

Basalt has recently established a relationship with the Bridge Street Market in Grand Rapids where it will stock some ready-to-eat items. Meanwhile, Martinez-Thiel is looking to cater private dinners and smaller events.

Pivoting and adjusting to needs

Lucy Dilley is executive director of the Can-Do Kitchen in Kalamazoo, a nonprofit food business incubator providing commercial kitchen space and a 16-week program called the Can-Do Camp, which walks entrepreneurs step by step from idea to a full-fledged food business.

Like the blossoming food businesses it serves, the Can-Do Kitchen has also experienced minor disruption throughout the pandemic, seeing a few months where its commercial kitchen was limited to just one individual or household at a time.

After a renter would leave, the kitchen staff would come through to disinfect.

Dilley said activity at the kitchen slowed significantly throughout the pandemic, whether food businesses decided to take a breather or were forced to by the health climate.

“Some of them took a break — I wouldn’t say by choice because it was COVID, but took a break to say, ‘You know, I’m going to take a halt here and do some business planning and keep my family safe,’” Dilley said.

Pandemic or not, Dilley said making those first sales as a food business are always tough.

“I think securing those first customers is hard anyway and to do it now is especially hard,” she said. “Some of the really new people just haven’t found any traction yet.”

Others “were kind of forced to pivot,” which can take longer for newer companies, she added.

When looking on the other side of the pandemic, Dilley said she was both optimistic at the business owners’ ability to learn valuable lessons from these hardships while still being concerned for the more vulnerable members of the industry.

“I’m definitely worried, especially for entrepreneurs that were already experiencing lots of barriers — people of color, women, immigrant-owned businesses — (there are) just tons of walls up there anyway,” she said. “I’m concerned that they might have more trouble getting to the other side of this. 

Read 968 times Last modified on Friday, 11 September 2020 11:43
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