At 6:42 p.m. on Saturday, October 13, the owners of more than 175 Brooklyn food businesses received an email from Pilotworks informing them that the company was shutting down and they would no longer have access to the facility starting at 5:00 p.m. (more than 90 minutes prior to the notice) that day.
Members who were in the kitchen prepping foods expected at events and markets the next morning were escorted out by security. After one member expressed anger, the police were called.
By early the next morning, a resource-sharing email chain was up and running, and Dippin’ Rings founder Josh Henderson had created a Slack chat. “There was this community board where we would post things and people would respond, so I didn’t want to lose that,” he said, “and I kind of realized that every second that would pass, the community would spread out further and further.”
At 10 a.m. on Sunday, about 30 members were already meeting at a café. “Obviously a little bit was commiseration and hugs and venting,” said Bija Bhar founder Anjali Bhargava, an original Pilotworks member. However, she said, the resounding theme of the meeting was, “We need to move forward.”
Pilotworks (originally Brooklyn Foodworks) was touted as pioneering incubator model that would become the WeWork of small-batch food production. Less than a year ago, the company announced it had closed a $13 million round of financing in a press release that touted big-name investors like the co-founder of Seamless and David Barber. It opened additional locations in Providence, Portland, Maine, Newark, Chicago, and Dallas, and claimed others were coming.
Former members and employees said that while it felt like a start-up environment, there was no indication the company was struggling financially. When the Providence and Portland locations were shuttered, they assumed it was due to the constraints of smaller markets.
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14 hours ago my business and hundreds of others small food businesses received the news that our kitchen incubator, Pilotworks, had closed all operations as of 5 pm yesterday, because they had failed to raise more capital. (I believe they raised $13 million in the last year from @campbells venture capital arm and millions more including money from @nycedc) They not only failed to give us notice, they let all the staff go yesterday and shut the gas off and forced people out who had food on the stoves and in the ovens for events and markets this weekend. They refused permission to cold and dry storage until Monday. Many of us are gearing up for the holidays- a time that can represent 40% or more of our annual sales and are suddenly without a space to produce. We will all be scrambling to find commercial space and the lack of notice has already cost many businesses thousands of dollars in losses. Many of us are gathering this morning to share resources, ideas, and probably some hugs. This story is one that I’ve just scratched the surface of myself and while industry sites are sure to cover it, I think this represents an opportunity to help people understand the costs and obstacles small food manufacturers face and is a story New Yorkers, and all Americans should hear! I’d love to connect with any journalists who might want to dive deeper into the story. You’d be very welcome to come to our gathering @loisbarnyc in the East Village at 10 am or I can connect you with members who were there during the shut down etc. If you see this and have any suggestions or thoughts on getting this covered or journalists who might want to help share the story, we’d all be grateful. As far as Bija Bhar goes, I am lucky that I recently mixed several batches and even got much of it packaged, so while things will be complicated, I can continue to sell and very much welcome all of my direct and wholesale customers to continue ordering directly. We need your support more than ever. Thanks for reading and for any leads, suggestions, votes of confidence, hugs, etc. Tagged businesses are just a few of the hundreds impacted.
In a statement posted on its website, Pilotworks said it was ceasing operations “after failing to raise the necessary capital to continue operations.“ A representative declined to provide further comment for this story.
A former employee (who did not want to be named) said employees received the news in the same abrupt fashion and were devastated to be immediately unemployed. They were also so heartbroken by members’ situations that a few volunteered to come in during business hours on Monday through Wednesday to allow members to collect their food and supplies.
“I can’t tell you the thousands of dollars I lost in the past three days,” said Brooklyn Biscuit Company co-owner Liz Santiso, who was baking biscuits seven nights a week at Pilotworks for buyers like Dean & Deluca and Union Market, who she had to call to inform they wouldn’t be receiving their orders the next morning.
Bhargava is owed a few hundred dollars for pre-paid kitchen time and also about $2,400 in unpaid invoices from the company’s distribution arm. Pilot Kombucha founder Alex Ingalls was doing much more distribution through Pilotworks and said that at the time of closing she had $17,500 in outstanding invoices, including $5,000 that was already overdue. Members said they were having trouble getting in touch with the company about the money they are owed, and during an interview, Santiso gasped loudly into the phone. “I just looked at my emails,” she said. “Oh my god, they just tried to charge me for rent.”
In terms of moving forward, though, the email chain, Slack chat, and meeting were just the beginning. In just a few days, former members created a robust website that outlines both how makers can help each other and how consumers can help the community.
To help with storage issues, Ingalls has been in touch with the building’s management in hopes that she can “take over and coordinate with the companies currently storing product there to continue to do so.”
Hot Bread Kitchen stepped in to connect businesses to available kitchens throughout the city, and Santiso said several chefs have reached out to her offering up their kitchens as a stopgap measure while she finds a permanent space.
“I’m hoping I can produce tonight, but if this continues on for another three days, I’m out of business,” she said. “The Brooklyn food ecosystem is basically crashing right now. When you think about how many people we employed, how many people we serviced … the ripple effect is just enormous.”