Rutgers Food Innovation Center

April 15, 2011

With local, state and federal budgets under scrutiny, funding for university programs is increasingly at risk. But New Jersey’s Rutgers University has found an innovative solution that encourages education and new business development in the value-added food industry.

The Rutgers Food Innovation Center was founded in 2000 as a food business incubator – a program to help startup food businesses get up and running. Incubators are commonly used in technology sectors, which typically require large capital investments, but the Food Innovation Center is a service-centric model that focuses on mentoring existing businesses and encouraging new product and business development, said Margaret Brennan, executive director of the center.

There are three key areas that the 11 full-time staff members – two in food safety and quality assurance, one in charge of product development, three in operations and engineering, two that handle client services and three in management and administration – work with clients on: professional guidance, manufacturing and education. The professional guidance covers the business management, marketing and professional development, among other topics. The manufacturing guidance starts with product development and testing on the front end, through manufacturing in the center’s kitchens and processing rooms. It also involves managing the physical facilities and quality control of production activities. The final tier of the center’s work is education, where clients learn to take the business or small startup to the next level, food safety training, HACCP plan development and third party audit review.

It’s a new business model for fostering innovation in the food industry, which has typically relied on individual companies investing in their own product development, research and testing to bring a new product to market. There are around 1,400 business incubators in North America, but few focus on food, and those that do are typically smaller and focused on farm market-type products.

But as costs rise, companies are seeking out partnerships to innovate with less cost, and that’s where a business incubator comes in. The center works hand in hand with clients to get a product in the market. It’s a “cluster” of resources in one place, Brennan said. The client mix is diverse at FIC, and there hasn’t been a need to aggressively market the services – it’s at nearly full capacity from companies requesting assistance, Brennan said. The reputation has grown, and now its network of partners such as the New Jersey Department of Health or Rutgers Cooperative Extension will put clients in touch with the center, she said.

The center also is a model for innovative funding strategies, Brennan said. As federal deficits lead to cuts in Extension funding, programs will need to be more self-sufficient in the future. The FIC was able to build its headquarters, a 23,000 square-foot, state-of- the-art facility that houses a food production plant, labs, offices, conference room and meeting space, with no debt thanks to state and federal grants ¬- and clients pay only for the services they use, keeping costs down.

Brennan said the model could work in other areas, since it doesn’t take a new building to bring clients in. If the service offerings are driven by client need, then you can build a very successful program without a processing or kitchen facility. Service-centric programs are what a successful food incubator is all about.

“It’s not about the facility, it’s about the services you offer,” she said.

Processing Facilities

About half of the space in the facility is dedicated to services, education, focus groups and sensory analysis, with the rest dedicated processing rooms. There are four in total, two ambient temperature and two refrigerated. One ambient room is a bakery and the other is hot processing room that allows companies to graduate in scale to higher batches, from 20- to 40- and then 100-gallon batches. The room features kettles, a bottling line, ovens and stoves for various products. The refrigerated rooms have chillers and freezers for fresh-cut or frozen products, as well as storage facilities for the raw materials and finished products. One of the refrigerated rooms is a HEPA-filtered clean room that can be used for assembly and packaging.

The space is managed to the highest food safety standards, and food safety is job No. 1 at the facility, Brennan said. Through the university, FIC has access to experts with knowledge about the most current practices, as well as experts in food science and nutrition.

“I think having an affiliation with the university raises the bar as far as services provided – especially as far as food safety,” she said.

The space is sizeable enough to take a product from the idea stage through production. Once a company grows to a level where the capacity at the center no longer meets a client’s needs, the staff and client work together to find larger processing space, either through co-packing or investing in a plant.

The development of the Food Innovation Center was led by Brennan and Lou Cooperhouse, who served as the center’s director from 2003 to 2010. Cooperhouse left the Center in 2010 to become president and chief operating officer of F&S Produce in nearby Rosenhayn, NJ.

FIC Impact

Since 2000, the center has helped more,200 companies in New Jersey, across the United States and around the world. In 2008, the Food Innovation Center opened an $8.3 million facility, which sits on six acres in Bridgeton. That site was selected because Bridgeton is in a federal empowerment zone with the second-lowest per capita income in the state, and the goal was to improve an economically depressed area by fostering business innovation.

“We really wanted to be able to make an impact in the area where we were investing,” Brennan said.

Bridgeton also had a food history and heritage, Brennan said, and the center would have the most impact in an area near New Jersey’s food and agricultural sector. The city has welcomed the investment, and has decided to pursue culinary arts as an investment strategy. Bridgeton named the business park the center sits in the Food Innovation Park and the city is planning to develop a facility next door to the Food Innovation Center that will allow clients that graduate from the center’s program to larger facilities.

The impact has been felt in the community through Rutgers’ and the city’s investments, but the clients are investing in the area as well. One of the clients that came to the center for help developing gluten-free products, an Italian company called Schar, broke ground this winter on a 50,000 square foot, $15 million facility in the area after working with the center on a new line of gluten-free breads. Not only did the center help with creating the product, it has continued to help Schar with site selection and plant design.

Growers in the area have also benefited from FIC help. Circle-M Fruit Farms, a peach growing operation in Salem, N.J., worked with the center to identify what to do with cull peaches that are normally plowed under in the fields. Together they found those peaches were prime for juicing, so Circle M worked with a bottler to package and market it as peach cider. The grower now is able to earn considerable profits from raw materials that were previously discarded, Cooperhouse said.

The products developed with help from the Food Innovation Center typically cater to niche markets with refrigerated and shelf stable products. Further value-added products include high-end tomato ketchup, various sauces, jams and jellies.

The Rutgers Food Innovation Center has become globally recognized for its unique model and economic development impacts, and was named the Incubator of the Year by the National Business Incubation Association, and also recognized by USDA as a national Innovative Program Model and an Agricultural Innovation Center Demonstration Program.

In 2010, Cooperhouse testified at Congress, and also spoke to the World Bank, about the tremendous impacts of agri-food business incubators, and their effective and efficient role in job creation and entrepreneurship development. He has also provided assistance to developing incubator programs in Africa, as well others in North, Central, and South America.

“Hopefully, in the near future, universities and economic development agencies will establish similar programs across the United States and around the world,” Cooperhouse said.