Small specialty food companies moving into Oakland’s factory spaces

A legion of small specialty food companies is moving into Oakland’s industrial spaces that have been left vacant by big food producers. A case in point is Premier Organics, a maker of nut butters that is a growing presence inside the old Mother’s Cookies’ factory on 81^st Avenue.

About two years ago a new cluster of food companies began moving into the historic cookie plant, including Premier Organics and DoBake Bakeries Inc., in a shift from mass-producers to artisan and specialty food producers. Last December, Premier Organics signed a five-year lease at 810 81st Avenue and moved into 20,000 square feet of Mother’s Cookies’ old 190,000 square-foot facility. Premier Organics is currently negotiating for another 8,000 square feet to add to its headquarters.

And after doubling its production facility size last year, Premier Organics—which sells its line of organic butters and oils under the Artisana label—is still growing, said co-owner Jason Mahon. “We have increased our sales by 33 percent from last year,” said Mahon. Premier Organics has grown so quickly that the company plans to add 8 to 12 more people to its team of 30 people next year.

In the same building, DoBake, a privately-held wholesale producer of muffins and croissants, occupies more than 60 percent of Mother’s Cookies factory. Dan Giraudo, president of DoBake, said the space was well suited for DoBake because it is close to the freeway and the facility was ready for food production.

A thriving food culture, affordable rent, easy seaport and freeway access, city support, and local business organizations are all core reasons that a flourishing community of food production companies is now putting down roots in Oakland. More than 40 small and mid-sized food companies line the waterfront trail in Oakland.

Over the last five years Margot Lederer Prado, the industrial specialist in the City of Oakland Business Development Services, has noticed a high demand for food production buildings from small companies.

“Food companies are always looking for buildings with commercial kitchen build-out in Oakland,” said Prado. “We can compete with San Francisco because we already have a history of food producers here. For many small companies, they want an affordable space that is not too big but when they are ready to expand, they can stay in the same area.”

Also helping foster small ventures is Oakland’s status as an enterprise zone. The California State Legislature developed the enterprise zone program to help targeted industries develop and grow thanks to state tax credits. For new businesses, these credits can mean huge savings when they hire new employees and make large business purchases. Other enterprise zones in the Bay Area include San Francisco and Richmond.

Mahon decided to move Premier Organics to Oakland in 2004 after looking at a few places in San Francisco and renting an hourly kitchen in North Berkeley. He cites rental value, as well as help from local business organizations like the Oakland’s Business Development Corporation and Inner City Advisors as major reasons for settling in Oakland. The Oakland Business Development Corporation (OBDC), a non-profit lending arm of the city, gave Premier Organics its first $50,000 loan to finance the business. “OBDC was willing to take the risks with us,” said Mahon.

While the OBDC is able to provide small businesses with capital, non-profit organizations like Inner City Advisors provide new businesses the tools they need to grow into mid-sized companies. The group offers advice from business experts free of cost to select inner city companies that will create jobs in the community and serve as good business models. They link the 18 companies under their watch—including Premier Organics, Blue Bottle Coffee, Revolution Foods, and Numi Tea—with pro-bono strategic advice, as well as assistance in financial assessment, human resources, operations, and entrepreneur education.

With a $25 million investment fund, Inner City Advisors plans to help more urban businesses manage their growth and scale up their companies. “It has a multiplier effect,” said Jose Corona, the executive director of Inner City Advisors. “If we help a company that is sound and sustainable, we see that as an investment in the community. It can produce higher wages, better health care and higher quality of life.”

Last year alone, Inner City Advisors helped create 317 new jobs and retain 1,092 jobs. Ninety-five percent of the companies it helps are based in Oakland.

For James Freeman, the owner of Blue Bottle Coffee Company, it was a confluence of events that led him to establish roots in Oakland. Freeman said he “fell in love” with the beautiful old architecture of the fruit and vegetable warehouses that line the waterfront. A restored 1923 brick warehouse now houses Blue Bottle’s Webster Street roastery, as well as a coffee bar and cupping room for tastings. Freeman hired 25 new employees this year to work at the Oakland headquarters, bringing his total workforce, including retail employees, to 100 people.

DoBake also expects its workforce to grow, said Giraudo, who plans to add 50 employees in the next two years.

For Mahon, there’s value in the networking, sharing of information and finding of solutions among members of the Oakland’s small food business community.

“Oakland’s small food corridor is establishing itself against cities like Los Angeles, Boston, and Seattle,” said Mahon. “There’s a culture of cross-pollination in the food business that is really welcoming.”