After two months of scrambling to save their businesses, the former members of Pilotworks were dealt another blow yesterday, again in the form of an email, this one with the subject line “Unfortunate news.”
Founder Adam Melonas invited all former tenants back and said he expected the space to be up and running within a week. That plan apparently hit a wall, quickly.
“There’s no easy way to say it—our plans to open Nursery at the former Pilotworks Brooklyn site will unfortunately not be moving forward,” Melonas wrote in the December 18 email. “We gave everything we had to the opening of Nursery and invested heavily in trying to reopen this facility.”
Pilotworks’ shared kitchen space closed abruptly after notifying tenants via email on October 13, leaving more than 175 small food businesses homeless leading into the busy holiday season. Many producers lost thousands of dollars in rent and unpaid distribution invoices as well as their customers as they struggled to find new kitchens to fulfill orders. That struggle has been ongoing ever since.
“The confusion surrounding the sudden shutdown led us to lose several accounts, so we’ve spent a lot of labor hours trying to reopen them. Some of them took a long time to set back up with a reliable distributor and led to huge loss of sales. Some of them simply decided to go with another company because it was easier,” said Pilot Kombucha owner Alex Ingalls. “All told, we’ll miss our projected gross sales mark by about $50K, and I’d attribute two-thirds of that directly to the shutdown.”
Others, like Bija Bhar founder Anjali Bhargava, fared better, since her turmeric elixir is shelf-stable and she had a lot of inventory at the time of closing. However, Bhargava said she needs to start making product again soon, and she hadn’t been able to find a new space with the right equipment. She was one of many producers planning to join Nursery as soon as the doors were open.
Liz Santiso, co-owner of Brooklyn Biscuit Company, was especially eager to join Nursery. Of all of the Pilotworks makers, her business was especially hard hit because it required baking fresh daily. Santiso was able to find temporary kitchens to operate piecemeal, but she recently lost access to one temporary space and was having trouble finding another that had the right equipment and wasn’t cost-prohibitive. Last weekend, she officially shut down the wholesale side of her business—a $350,000 business that had been selling to big-name clients like Dean & Deluca and Union Market.
Santiso was impressed by Nursery’s offerings and was hoping to turn things around. “A lot of people are skeptical because the model is really different, but I appreciate the difference,” she said, referencing how the incubator planned to help businesses grow and provide access to resources, in exchange for a stake in the company.
She talked to the team and signed up quickly and said she heard from many other makers who were all planning on joining. Everything was looking bright, until the Nursery team went silent.
Melonas did not respond to requests for comment, but former members suggested the reversal had to do with issues with the facility itself. In his email announcing Nursery would not be moving forward, he wrote that “during pre-inspections, we discovered some conditions that we do not believe match the extremely high standards by which our company is known to operate.” In an earlier email sent December 1 announcing the takeover and inviting former Pilotworks members to attend info sessions about joining Nursery, he also hinted at facility inspections being the last piece of the puzzle. “We are doing our best to reopen as quickly as possible, and are working to restore operations that will allow our tenants to take advantage of the busy holiday season … but this is dependent on the Department of Health,” he wrote.
That prospect adds another layer to the ongoing saga, since while there were other companies in the running to reopen the space, inspection issues would presumably disrupt their progress, too.
Former Pilotworks member April Wachtel, the founder and CEO of Swig + Swallow, said that the situation brought into sharp focus the fact that running a food company out of a shared, rented space is a precarious business. ““When you are in an incubator that is itself a startup, there are just a ton of liabilities,” she said.
In October, she started SupportIndependentFood.com to provide a way for consumers to support the affected businesses, and while activity around the project has petered out as makers have gone their separate ways, the site is still up and running.
Wachtel has since secured her own space, shared with one other maker, but she was able to do that because the Pilotworks shutdown didn’t hit her business as hard as others. Those who were more dependent on Pilotworks for distribution or cooked fresh food were not so lucky, and now, a potential solution has vanished. “People were left starting from square one on this,” she said.
People like Santiso, who had a one-year business plan to open her own space and was on track to do so before October. “We were just killing it, and when it shut down, we thought we could sort of save everything and piecemeal it and keep all the clients, and it’s actually not doable at this point, so we’ve had to give it all up,” she said. “As a matter of fact, I just started looking for a job. That’s what this looks like.”
Photos courtesy of Facebook/Chew Innovation.