Food for thought at EDA

Published 11:08 pm Thursday, September 11, 2014

The Economic Development Authority got some things to chew on at its monthly meeting on Wednesday after hearing about a proposed new program to encourage entrepreneurship in the food and beverage processing industry.

Economic Development Director Kevin Hughes presented preliminary parameters of the program to favorable reception from the EDA members.

“This is food for thought, no pun intended,” Hughes told the appointed authority. “We see this as a growing business. There’s obviously a demand everywhere.”

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Suffolk’s “rich tradition” of food and beverage processing in Suffolk includes such giants as Planters Peanuts, Birdsong Peanuts, Unilever’s Lipton Tea, the J.M. Smucker Company and Massimo Zanetti, Hughes noted.

“It’s something we’re very good at,” he said.

With the bounty comes a knowledge base that entrepreneurs could use to help kick-start their own businesses, Hughes said. And the city, through its Economic Development Investment Program, has some resources that could help as well.

The proposal for the new program would give start-ups a maximum of $100,000 from the EDIP, Hughes said. Half would be a loan guarantee, and the other half would go toward the lease or purchase of a site as a “virtual incubator.”

A traditional business incubator provides office space at a reduced rate in a building usually owned by a municipality or some economic development agency until the start-up “graduates” from the subsidized space, Hughes said. But because the space for a food processor “looks very different” — usually an industrial facility or a farm — that’s not possible for this industry, Hughes noted. Therefore, the “virtual incubator” would provide monthly payments toward the space.

The program also would connect entrepreneurs with mentors, business education resources, real estate and financing options, Hughes said.

But a heavy responsibility would be on the business’ shoulders to prove its worth. The city would analyze its potential return on investment and determine the amount of the grant, up to $100,000, based on that, Hughes said. The business also would be required to be vetted by an approved business education partner, meet with a mentor, share its lending and real estate terms and provide a presentation on its finance, business and marketing plans to the Economic Development Authority.

“Feedback in the concept stage has been very positive,” Hughes said, noting the city hopes to draw businesses that may otherwise be going to neighboring localities. “There’s only so many Lipton Teas; there’s only so many Massimo Zanettis. We want to not just go after the big guys; we want to grow our little guys.”

Hughes said the department hopes the program will be live by the end of the year.