Detroit-based founder, Noam Kimelman of  Fresh Corner Cafe

Romy interviews Noam Kimelman on his venture Fresh Corner Cafe in Detroit.  They also discuss his non-profit partner, Detroit Food Academy, and the motivation of the youth in the city of Detroit!  Noam is  a very intelligent and engaging guest. Great Detroit artist at the end of the episode to round out another great show!

Full Transcript:

Romy: Welcome to the Bonfires of Social Enterprise show! This is Romy, and I hope this interview inspires you. I interviewed Noam Kimelman from Fresh Corner Cafe and Detroit Food Academy. Noam shares about the genesis of Fresh Corner Cafe and what is moving his heart these days. I want to get right to is because it is busting with wisdom. He has a soft-spoken nature and a big giant heart for the kids of Detroit. Be sure to stay tuned to end so you can enjoy another great song by Detroit artist, Griz.
Okay, here is a portion of my interview with Noam Kimelman.

Romy: Noam, let’s talk about Fresh Corner Café.

Noam: Fresh Corner Café is a mission-driven food service provider working to increase access to healthy foods in Detroit. We started off by looking at the landscape and hearing a lot about what was once called the Urban Food Desert, now more often called the Urban Food Swamp because there is quite a number of food options, but a lot of really unhealthy food options. There was a lot of talk about a lack of access to grocery stores, and there was this report that came out that spoke about how the physical proximity to healthy food retail versus unhealthy food retail, and how that was one of the highest indicators of diet-related disease and obesity. Just the mere fact, controlling for education, income level, race, and all the other possible confounding factors, just the mere proximity from one person to a fresh grocery store, versus a fast food restaurant or a corner store, had a big effect on their health.

We looked at that, and we thought, “Why does it need to be that way?” I spent some time in Argentina when I was in college, and the corner stores were not the way we think of corner stores here. They were abounding with fresh produce; they were community centers; they were these really wholesome, healthy places to feed your family and to feed yourself. In Detroit, and I think in most of America, gas stations and corner stores are entirely the opposite. It’s ways to get a quick fix of sugar and processed junk to keep you feeling bad and unhealthy.

We looked at the model, and we thought, “Why does a gas station and corner store have to be an unhealthy food retail location? Couldn’t it be a healthy food retail location?” If you could figure out a sustainable model to get healthy foods into corner stores and gas stations, now you have 1,000 new healthy food retailers that are literally on every single corner in Detroit. That could really address the proximity issue for people to healthy food retail versus unhealthy food retail.

We spent a few years trying to tackle that problem. Within the first year, we were in 45 gas stations and corner stores. We grew really quickly; we were really excited. We got a lot of press; we got a lot of pats on the back, but what we found out once we settled down and looked at the numbers is that we were losing about $7,000 a month just servicing these gas stations and corner stores.

A great model if you’re non-profit, maybe, and you think about the dollar invested per healthy meal sold. We were trying to function as an L3C, which is a Limited Low-Profit Liability Corporation. We were really intent on trying to make this work without grant support so that we could prove the sustainability of the model.

That was the first few years and quickly realized that that was not going to sustain itself as a business, and we started thinking about other ways that we could support the business. We developed some more profitable revenue streams like a strong catering business and a workplace wellness business. Those profits started to come in and helped support the work in corner stores and gas stations, but we were still just losing too much money to sustain those corner stores on their own.

We started looking at other models and thinking, “If it’s not the corner store or the gas station, what other places do people naturally aggregate, where there’s a natural flow of people who are moving through a space that might be interested in finding healthy food, but there’s none available to them?” We started looking at community centers such as schools or rec centers, and thinking about times when there’s a natural flow of people such as after school when parents are picking up their children, or the local recreation center where after yoga class, after Zumba Class, after a cooking class, and you have a group of 20 or 30 people who are hanging around, looking for some food. Whereas they could go to the nearest food retailer, which is a fast food restaurant most likely, in Detroit. What if we put healthy food in that same spot?

We started this pop-up program called Fresh Corner Pop-ups. We set up a table, and we stack it up with healthy pre-packaged meals like salads, fruit cups, wraps, and yogurt parfaits. We’d sell them for about an hour and just wanted to see what would happen. We tried it in one school called Detroit Achievement Academy, after school about [3:00] on a Tuesday, and we sold about 40 or 50 meals in an hour. In the meantime, we’d been selling about 30 meals a week at a gas station.

We were thinking, “Oh my gosh! This is so much more effective!” We were able to skip the middle-man retailer, so rather than sell the salad for $3.00 to the retailer, and the retailer sells it for $4.00 to $5.00 to the customer, why not just sell it directly to the customer for $3.00, and see if that subsidy or price-break makes a difference? It clearly did, and we think the proximity piece of going to them rather than going to a gas station and trying to change the gas station model to be more accommodating towards fresh food, bring fresh food into a community space where people are expecting positive, fresh things to be present.

We’re really excited about the results there. Now this is a model that we’re really actively growing. We’re hoping to be in 88 community centers every single week, across seven counties. We’re not only going to have freshly prepared meals, but we’re also combining with another local non-profit called Peaches and Greens, and they’re going to be providing the fresh produce. It’ll have this mini-pop-up market for about an hour or two every single week in each of these community centers.

Romy: You’re touching on one of my absolute favorite things about pop-ups. I think a couple of years ago, we had said, “Hey, why don’t you do a pop-up? Before people like you having success, there was this bit of a – almost a stigma with it. Like, “Oh, you’ve got to have this brick and mortar space that’s amazing or people won’t come.” Will you talk to me a little bit about your discovery of what you’re finding because obviously there’s a reduction in labor costs if you’re only there for an hour or two? Are you finding that you had any of that stigma associated with it?

Noam: Great question. I don’t know that I’ve seen a stigma. I’m thinking about the pop-up and how sometimes people are afraid to test ideas. I think it’s sometimes because they’re afraid it won’t work, and they’re afraid to find that out so early. They’d rather find that out a few years down the road. As someone who has found that out a few years down the road, I’d much prefer to find it up-front. Yeah, I think testing as quickly and as early as possible is really the best way to go.

As far as stigma around the actual pop-up with food, I think people have been mostly receptive. I think if we tried to charge community centers to bring this model to them, I think that would’ve never worked. In some cases, community centers ask us for a percentage of the revenue. We come back saying we’re already subsidizing it to such a low price that it just wouldn’t work.

I did leave something out. I keep mentioning the subsidized prices. A $3.00 salad is the same salad that we sell at our catering business and in our workplace wellness business for between $6.00 and $8.00. We still have about a 20% margin, just from a pure cost-of-goods perspective, but when you think about labor and everything that goes into operating the pop-up, it does require a subsidy to continue selling those salads for $3.00.

Now we’re starting to look at this social enterprise model, and not just strictly for profit, but can we leverage foundation support, grant support, and even corporate sponsorship support to make the case of this is the best return on your investment. You can invest say, $10,000 with us, and we can increase X-amount of meals sold in a dignified, positive way to the community. I think it’s even a cheaper rate than if you were donating canned goods to the community.

Romy: Without all the toxins. Yes!

Noam: Yeah, much better food, in a much more dignified way.

Romy: Will you touch on Peaches and Greens for just a second, for those folks that aren’t in the Detroit area?

Noam: Sure. Peaches and Greens is a really excellent non-profit. It’s under a non-profit called Central Detroit Christian, and they own about seven different businesses. Peaches and Greens is one of these businesses. It’s in the North End, which is a neighborhood just north of the Midtown/downtown area. It’s a small neighborhood green grocer. They’ve been around since, I think, 2009, and they were actually one of the first people to pilot the mobile grocery truck on wheels.

They retro-fitted an ice cream truck; they put some produce in it; they went around the neighborhood; they had a jingle, and people would come outside of their house and get fresh produce. The Obamas visited them to herald this is one of the first times that someone tried this kind of model. Now, they still have that going. They’re still a neighborhood green grocer. They’re doing excellent work in the community, getting healthy food out into their specific neighborhood in North End, Detroit.

Romy: Cool. I love seeing us all supporting each other. It helps them that you’re buying your produce from them.

Let’s shift gears a little bit. I know that you even took this one step further and opened up a non-profit. Could you talk to us about that?

Noam: Sure. In 2010, I started the business called Fresh Corner Café. In about 2011, working on this business, failing from a financial perspective, losing all this money every month, and thinking about how to increase access to healthy food. In the meantime, someone invites me to help facilitate an after-school program in southwest Detroit at Cesar Chavez High School. There wasn’t really a strong focus on the program. It was just around food. Let’s talk about food with high school students. There’s a lot of conversation around food today, let’s see what they think about food.

The first class, we opened up a discussion, and there’s all this conversation about how the food in their cafeteria is horrible; the food in their neighborhood is horrible, and they don’t feel that they have access to good, high-quality, healthy food. Throughout the semester, we were talking more and more. We introduced some cooking lessons. At the end of the semester, we said, “What would you like to do with food in your community, whether it’s your school, your neighborhood? What can we do about it?”

By the end of the semester, they decide to develop a Mango-on-a-Stick Stand. Their own recipe – they put a mango, they put it right onto a stick; they put some chile and limon on it, and they sell it in their high school cafeteria for two hours. The sold over 150 mangoes for $1.50 a piece in their high school cafeteria to their peers. These are high school students who we say don’t want to eat healthily; all they want is the Hot Cheetos, but we really see the traffic from the Hot Cheetos vending machine directly diverted to our Mango-on-a-Stick Stand.

You had these students going in circles in the line, coming back for 2 or 3 Mangoes-on-a-Stick, and pulling out cash from who knows where. We thought that these kids don’t have money to spend. They were so excited about it. Our students, even more excitingly, were just so excited about their ability to have an impact in their own community, and just the excitement about learning how to put an idea into action.

I’m sitting here scratching my head, and I’m thinking, “I’ve got a Masters Degree in Public Health. I’ve studied this stuff. I should be able to figure out healthy food access. I’m banging my head against the wall, and these kids put a mango on a stick, and they make more money than I make in a few weeks in a gas station.”

I’m looking at this. This is really something powerful. What can we do with this? One thing led to another, and we developed this non-profit called The Detroit Food Academy, along with two other co-founders. The Food Academy is now in 10 different high schools; it’s an after-school program. We work with 250 students. It’s a year-round curriculum where students learn how to build their own good food business, and use that good food business to affect the health of their school and their community. Through that process, they learn about business basics; they learn about cooking; they learn about nutrition, and more importantly, they just learn about leadership and how to put an idea into action.

This summer, 25 of those students are employed to actually take their business and run it at farmer’s markets throughout the city, including Eastern Market, which is the main farmer’s market in the city. The products that go through the summer program, the cream of the crop, the ones that we think we can do something with rising into this umbrella brand called Small Batch Detroit.

Small Batch Detroit is this heading for all the products that our students create. The inaugural product called The Mitten Bite, which is this all-natural snack bar that our students created at Cody High School in 2012, is now in Whole Foods. It’s with a contract with the airport; we have a contract with Marriott, and we’re going to be in retailers all across southeast Michigan, and even beyond.

We’re just so excited with that product. Students are employed in every single step of the process, from the manufacturing to help with the design, and to demoing and sampling in stores. On top of the wages that go to the students, all profits go directly back to the non-profit and then support the educational programming in high schools throughout the city. Through that process where we were sampling and demoing products all the time-

Noam: Through that process where we are sampling and demo-ing products all the time in different stores. A number of other business owners have seen our students handing out samples in Wholefoods, and they say, “Hey, can we employ your students to run our demo stands.” We thought, wow, now we’re really onto something, we want to teach these students about communication, persuasive communication, how to make a pitch, and we think this is a great experience for our students. Now we have a new service where we work with local business owners, and we hire our students to work with their businesses to demo their products in stores. We have over ten businesses now that employ our students. We are employing I think, 11 students total right now, almost full time throughout the summer at $12.50 per hour or more.

Romy: Oh my goodness.

Noam: Yeah, really exciting.

Romy: There’s so much social impact here.

Noam: Yeah. It’s a lot of ripples.

Romy: What’s the one on your heart when we talk about social mission and social impact, because we got employment, encouragement. What’s the one you’d say that I like to say, lights you up when you see it happen?

Noam: Yeah, I think there’re two things there. One is, I know when I started my business, sort of in the middle of a masters degree, I thought I have about six years of higher education, and here I am starting this business and I feel like I haven’t really learned a thing about the world and how to get things done, after having this year or two of starting my business. I just remember thinking, wow, I wish I got this earlier in my life, maybe I’d be so much further along. I’m very happy with where I am now, it’s great, too. I was thinking like that the earlier you start with how to turn an idea into reality and how to actually get things done, and also learning becomes so much more sticky when you’re learning to actually apply immediately because you’re learning it for a purpose. Thinking about that’s really an exciting possibility, but even more so, when I was in high school I was maybe like a straight B student, which was fine, but I’d say I went to a private Jewish day school, a very high performing school.

The kids mostly go to ivy league schools; I went to the University of Michigan, which is considered okay. Just thinking, if I was, say, a mediocre student in my high school and I didn’t go to a really nice private Jewish day school, and I went to pretty much any school in Detroit, and I was just a mediocre student, I would have so few opportunities to continue getting ahead. If I made one mistake, so many doors just instantly close. I think that young people in Detroit just aren’t allowed to make mistakes. They aren’t given that opportunity, and I think...