The Bonfires of Social Enterprise with Romy of Gingras Global | Social Enterprise | Entrepreneurship in Detroit - Romy Kochan | Gingras Global | Social Enterprise | Detroit Entrepreneurs 20th July 2016
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!
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 we learn best from our mistakes and our trying things in the world and seeing what happens and seeing how people respond to us. I think it is so important that young people in Detroit get the opportunity to try things, to learn things, to get their hands dirty with things and to make mistakes.
Romy: That’s such a good word. What else, I know there’s something about the kids, too, that, is there anything that you see when they, that light bulb goes on for them. They get the discovery of how business is not so foreign. They’ve really sort of been doing business in a way by living the life they live. They’ve been selling things; they’ve been selling themselves already and just putting the structure around the product to make an income. Do you find that gives them hope?
Noam: Yeah, I definitely do. I think it’s that communication piece. I think we’re all sales people in some ways; we’re trying to convince somebody of something, whether it’s just a conversation about even politics, which I don’t think young people are having as much these days in high school. I think, as far as communication, I think our students are excellent communicators, and I’m thinking just giving a few pointers to think about how to communicate in a way that might convince another person to purchase your product is real exciting for students who, some of them already have a lot of those skills immediately, and then it’s just directing those towards … it’s like oh, you can do something really cool and creative and productive with those skills. I think that’s a really big piece.
Noam: Yes, our students are creating the most interesting products, to begin with. Some of them invite the product that we have is fully student designed. We had a shortbread pop tart product that rose to the top last year, and we’re still trying to figure out how to turn that into a scalable marketable product. This year, in the summer program, in addition to building a food business, they’re building an experience around a question. There’re four teams, and each team chooses a different question that they want to answer through a food experience. Some of the questions are, how can you offer a food experience that has really high-quality food but that is really affordable so that community members can access those foods. They have a month and a half to think about how to turn that into an experience at Easter market, on a set day where that’s going to happen.
I think you just see a lot of creativity, and I think when we think about how do we address problems in the community, whether it’s food access or whatever is going on, who is most fit to answer that question than the people who are experiencing those issues themselves. I think we can come into a community and think about all these answers that we have, but the best that we can get is just understanding fully what people in the community are going through. That takes so much time, and our students are the most incredible solution oriented people when they’re the ones who are experiencing the issues.
Romy: Yeah, that makes sense. They have a desire to solve it. Again, I find young people are not as jaded as it can’t be solved, they still have hope, and they are our future, so if we get them on a track that solutions are possible, and you come together and community, we don’t lose our future. I heard one time a doctor say that had made a bunch of rounds when he was trying to decide what practice to go into, and he said, “I made my way through all the residencies of the cancer wards and all the things that we have to do,” and he said, “I ended up going back into Pediatrics because sick children automatically want to get better.” I thought about that so many times when I think about entrepreneurship; there’s this embedded hope, and we’ve seen that embedded hope.
Noam: Yeah, absolutely, I think that there’s that privilege of having not been jaded yet by some failures and yeah, absolutely. I think it’s interesting when we talk to some of our students and think what is in your future, and what are you thinking about doing? I think sometimes we think about young people in Detroit, and so they’re so underprivileged, so poor, oh we feel so bad for these kids. These kids, they think about their future and they think, yeah, I’m going to go to culinary school, and they just think about their future in this way that seems really exciting and positive.
I’m thinking, of course, why would … we impose all these external things when we think about DPS, and there’s really a lot of, I mean these kids go through horrible stuff, but I think they’re still just thinking that we know we’re high school students, the next step is college, hopefully or the next step is some career development. Whether it’s culinary school or nursing school, they’re just really looking forward and thinking about the next step. Not thinking about the entire systemic external stuff that really weighs heavily in Detroit. They’re just thinking about their immediate lives and what they can do to be better.
Romy: That’s good for all of us. That’s all in the non-profit, right. How does it tie in with you? You’re the owner and founder of both right, did they have any other intermixing other than while your personality or your authentic-ness is involved, but is there any overlap whatsoever?
Noam: Yeah, nothing to formal. We do share this office right here, so this is both the business and the non-profit. We hire a lot of students who graduate from high school, and they’re really not quite ready to go to college, so a student was just in here. Now he works for Fresh Corner, and he is honestly the best worker we have ever had. I’ve hired 7-10 people from the community, and I found them from wherever and they haven’t come through any training program, and they’ve been probably in their late 20’s early 30’s, and here is this 19 years old student who knows exactly what to do when things go wrong. He knows who to talk to; he’s always thinking about what can I do to fix this problem before I talk to somebody else. You can see his training is like really there when you teach people not just to find somebody to fix your problem, but what can I do personally to do my best before I find somebody else, and let me get it to the best point that I can get it to and then look for help. The communication, it’s just amazing to see when students get that training up front. It’s not like anything in life; it’s just some pointers and some direction and then students pick it up on their own and do really well with it.
Romy: By you encouragement, too, I can see you have a very encouraging demeanor about yourself. Do you want to say something else about that?
Noam: Yeah, I was thinking about other connections. Along the lines of learning from the students in Ceasar Chavez in Southwest Detroit, when you ask people to solve their problems and see what solutions they come up with and how much more powerful and effective it is, I was just thinking now we have this pop-up model, and we’re going to be expanding to 88 sites across seven different counties, and we know nothing about those seven counties. I hardly know enough about Detroit to be effective as I want to be. I’ve been here for five years. It just takes so long to learn about even just one block. To learn like what the dynamics are and what’s going on and how to be most effective there. Thinking a lot about well we’re going to the 88 sites, we’re entering communities, can we work with people from those communities to be selling out product.
How do we engage that community? We think we have a, we work with what we call pop-up specialist and with every single site, rather than hire pop-up specialist internally and send them out to all over southeast Michigan, we’re going to be working with each community site to identify a pop-up specialist from within that community who we think can be a good ambassador for our program and a good ambassador for the community. Then they’ll develop some wages, and it’ll be hopefully a win-win for both. I’d say the connection is more philosophical between [crosstalk [00:25:33] than anything.
Romy: Right, but that’s exciting. I wanted to address that because I guess I want the listeners not to get tangled up. Do I have only to be for profit or non-profit? You can put two side by side, and we find that works very, very well. I guess I want to encourage people to release themselves of a structure. Do what honors your business and your community the best and your finances. People always focus on the sustainability of a social impact that, but if there isn’t financial viability, nothing keeps it going. I say all the time, we don’t live in a culture of trade solely, some of it, but still need dollars to send back and forth sometimes. All right, so shifting gears here. Just a couple more things. If you were just to let yourself dream colossal, with what you know at the moment, would you let yourself dream big right now? Not thinking about what money you might have or what could this look like if you let yourself dream?
Noam: I’ve had that opportunity to dream a little bit, I never thought this 88 sites in seven counties, I thought that was four or five years away. We have this opportunity, and it seems like it could happen in the next month or two that we’re starting to aggressively approach that, not that we’ll be in 88 sites like that. In some ways, this is a big dream come true, as we roll it out. I think beyond that, thinking about how this pop-up retail could transform into maybe something more semi-permanent retail and thinking about how you can create these points of access that are more than just the healthy food spot, but they can become more community spots and spots that can serve a lot of different needs through these semi-permanent pop-up locations.
If you can demonstrate the demand, what else can you build around that pop-up? Maybe it goes from one day a week to two days a week to three days a week to seven days a week, and then from one hour a day to four or five hours a day, and as the demand grows, I think it becomes contagious, and the word of mouth grows and says this is a really cool spot. Let’s get our food here rather than the local McDonald’s or whatever is around the corner. Seeing that just the natural development of this pop-up retail and to more permanent is just really exciting to me. On the workforce development and working with young people, right now we have 250 students, and that’s siphoned down to 25 in the summer, and we have 11 of them now working with us as part time and full time, depending on the season. I think this invite business is going to be amazing. I think it’s just the perfect product with the perfect story, and our students are really invested in it.
When you have your employees who feel a part of the product and a good product. What other ingredients do you need for success? I think that will be a national business, and I think it’ll be it’s employee. I don’t know numbers, but a lot of young people. Keep seeing just more than that employment, the $12.50 and hour is amazing but also how that helps build confidence and how that helps connect them to their next opportunity, whether it’s in the food system or whether it’s in another industry entirely or whether it’s college, but just hopefully facilitating bright futures for all the students who go through our program, is really an exciting piece.
Romy: This is so rich with opportunity. I find myself with you right now.
Let’s tell the listeners where they can both access contact you, and then maybe where they’d find the students products, the [inaudible [00:29:14] and all these right now.
Romy: All right, perfect. Thank you, Noam, for being on this podcast. I’ve had you on my wishlist for quite some time, so thank you for making time for me. You’re so busy; you’re so calm right now, but I know there’s a lot going on here, so thank you so much.
Noam: Thank you. Thanks for having me.
Romy: Thank you so much, Noam! He had so many nuggets of wisdom tucked in there! He truly lit up when he talked about making a difference with the youth. I hope everyone caught the message about using pop-ups for growing your businesses! If you get creative, you can even pop-up with service businesses.
Okay, let’s turn our ears over to the Detroit artist, Griz, and his song ‘Love will follow you’ featuring Russ Liquid. All of our Detroit artists are curated by Assemble sound. Talk to you next time.