Amped Kitchens

Borrower
Amped Kitchens/CED Food
Location
Los Angeles, CA, & Chicago, IL
Financing Used For
Acquisition & Construction
Loan Amount
$8.3 million
Loan Length
84 months
Number of Loans
2
Partner(s)
Nonprofit Finance Fund, Local Initiatives Support Corporation, Genesis LA, Reinvestment Fund, Chicago Community Loan Fund

Across the nation, consumers are interested in healthier and locally produced foods—for reasons from ethical concerns to dietary restrictions to a desire for fewer additives and less processing. Food production is changing to meet these shifting demands. Yet small businesses keep getting shut out. Mott Smith and Brian Albert, co-owners of Amped Kitchens, asked why.

Smith explains, “We spoke with countless small food businesses who were trying to have an impact on regional food systems, and they all described a similar story: They would start their business, get traction, get a big potential order, then hit a wall because they were working in someone else’s kitchen and didn’t have the infrastructure to satisfy their production requirements.”

Smith and Albert had an answer: A turnkey manufacturing facility that removes barriers for food production companies of all sizes—including emerging businesses run by entrepreneurs from low-income communities—enabling them to scale with very little capital investment. Amped Kitchens was born.

They opened their first space in 2015, in Northeast Los Angles. Two years later they got an acquisition and construction loan from BlueHub to open a second space—Amped Kitchens LA South—converting a 100-year-old granary building into a 52,000-square-foot food production facility. Due to their success in LA, the mayor of Chicago invited Civic Enterprise Development to open another location there, and in 2020, they opened a third facility in Chicago's Belmont-Cragin neighborhood with 64 ready-to-occupy kitchens, thanks in part to a $6 million loan from BlueHub.

Amped Kitchens’ tenants have sufficient storage space for both raw ingredients and finished products; they have packing areas where they can assemble their product and put it on pallets; they have access to loading docks—and to a staff of eight to 12 people who have food-handler cards and who know how to drive a forklift. All that means tenants can take on new orders with the confidence that they have the infrastructure to deliver.

While Amped tenants are helping supply healthy, fresh, prepared foods, they are also creating critical jobs. Smith explains, “The food industry is an incredibly important part of every region’s economic vitality, representing billions of dollars a year. But when people look at economic development, they often think about lowering barriers to entry. The challenge in the food world is that a lot of the barriers are there to protect public health, so lowering them isn’t a good strategy. We enable smaller companies to comply with standards faster and for less money than they could do on their own.”

That means the companies can survive, thrive—and generate jobs. Each Amped Kitchen location hosts companies that employ about 200–300 people per site. These are good jobs available to people without college degrees, and these jobs often provide opportunities for advancement, too. That potential for job creation was one driver for BlueHub’s investment interest. Smith speaks of how grateful he and Albert are for that support.

“During our first project, we used to joke that Brian and I were developers without a big balance sheet, building a project without comparables, for tenants without credit. That is basically ’three strikes and you’re out’ in terms of financing a deal. It took financing partners who had a really special vision to make this a reality. And BlueHub has been an incredible partner in helping us structure these deals in a way that recognizes their innovative nature.”

He smiles, adding, “We’ve also experienced incredible support, incredible assistance, and the rigor that creates better, more stable projects. We’re excited to keep working with them.”

Photo courtesy of Toni Browley, Scone House Café