Elena Rosenblum is the Vice President of Union Kitchen, a food business Accelerator building brands in the CPG space through a fully vertical supply chain. They are instrumental in the launch and growth of brands through their commercial kitchen, distribution and retail stores.
Before Union Kitchen was even an idea on paper, Elena was doing food-related work in Thailand and looking to move back to D.C. She wanted to do something different that had a direct impact on her world here at home. She felt passionate about food and wanted to find a way to build something that would keep growing.
Food has always been integral to Elena’s career and a deep passion of hers. In her role at Union Kitchen, Elena focuses on working with emerging brands.
In this installment of Retail Tomorrow, we sit down and chat with Elena about her role, what inspires her and what trends she’s loving in CPG.
Q: What was the inspiration behind Union Kitchen?
Way back when, Union Kitchen started as a pop-up cafe in DC called Blind Dog Cafe. We made chocolate chip cookies in a Cuisinart mixer. It was a small operation, but a successful one. We could not keep up with orders. So, we looked to find a place to scale production. After searching for a while we realized there were no viable options for a business like the Blind Dog Cafe. As a food company, you needed to either have a ton of cash or function in less-than-food safe places. Neither of these options felt like good ones, so we created a third option.
We decided to create a shared kitchen space, get businesses to come work out of it and build the community around a shared space. Then we realized there were other barriers. Distribution and retail were both pieces of the supply chain that came with unique challenges to be solved.
We had a place to create products but couldn't find reasonable options to distribute them. So, we decided to start our own distribution. We also noticed we still couldn't get on store shelves. But we could if we owned the stores. In 2015, we rolled out retail locations to finish the ecosystem.
We created an ecosystem where brands could live and grow in. That didn't come without its own challenges. We were the first to create it on the east coast so we had to work closely with the city to get them comfortable with the idea of a shared production space. We were able to get them on board for all different types of production, and are now the only shared kitchen in the country that is approved for USDA meat production.
Q: Tell us about your brand vetting/application process?
We run quarterly cohorts working with ten brands each quarter. We receive hundreds of applications for each. For us, we’re really focused on understanding the founder. We know that whatever product a brand may start with, it will have to change. What’s more important to us is that we want to work with individuals who are excited to build towards what customers want and who are committed to finding new ways to make their ideas work.
Q: It seems there are many ways you can help a brand succeed. What offering is most popular?
We are a full package accelerator - you get programmatic elements (classes, one on one support, resources through our network) and you also work in our kitchen, plug into our distribution and get placement in our stores. Our goal is to grow businesses beyond our own capacity. We want to help brands outgrow us as soon as possible.
Our accelerator works in four phases.
Phase 1 is focused on getting the product and company market ready. This means starting with the basics; checking to make sure everything on-pack is right like nutrition facts and ensuring core messaging is tight.
Then brands move into Distribution. We plug into our own retailers and close partners (Compass Coffee and Whole Foods are part of that network).
Once a brand has surpassed those phases, we move to a multi-regional strategy. Expanding a brand's footprint is the third step in our process.
By Phase Four, our brands are over $1mm in sales with strong margins and distribution.
Recently we raised a $20mm ‘Series A’ investment fund and are reinvesting back into our Accelerator brands to help them grow more quickly. And we have a business model that makes it successful.
Q: What is your approach to the retail experience? What makes Union Kitchen different?
Retail locations vary. Some are in smaller neighborhoods and reflect that, while others are in the middle of big cities in office buildings. We’ve intentionally kept the designs similar and streamlined, because people find comfort in familiarity. We want someone to walk into any of our stores and feel comfortable at Union kitchen.
Our store team and merchandising director oversee the merchandising of the stores. Sometimes we want to bring in brands to learn about them using special promotions, like staff pick areas. Ultimately we want to capture data in a real setting, so we may highlight products but really we want customers to find products on their own and grab it because it does a better job of servicing their needs. We want to continually learn from our customers while providing them the products they need and love.
One of the biggest differences between us and other retailers like us is that we have both national and local products side by side. We want to create an environment where people are excited to shop with us, and find exactly what they want, whether it's a bag of Doritos or something totally new and different.
Q: What about a brand first draws you in?
A big part of our philosophy is “build on what's working” rather than reinventing the wheel. There are reasons people come in and grab that bottle of Coca Cola or that popular brand of chips. We want to build on that and translate that to a “plus factor”, filling out the assortment with brands that feel like a value add to an already familiar product offering.
Q: How do you future-proof your product assortment?
We’re lucky. Because of the volume of applications, we see trends really early. An example is Keto. We saw multiple brands in this trend really early on, before hitting shelves on a mass market scale. Right now, we’re seeing a lot of functional-focused products using new ingredients like Sea Moss, so we'll start to seek out and test brands that represent this trend but aren't currently satisfied by the market.
We like to take a lot of bets. Since we are founder-driven, if the founder seems great we are more than willing to try stuff out. We are also lucky in that we have a real world test. We have actual stores. And we can move fast. We don't have to sit on something for years. We can pivot quickly as we learn what people want and don’t want.
Snacklins is a prime example.Through watching activity in the stores, we saw that customers bought it but pork rinds weren’t a #1 craving for vegans. For those who do like pork, they didn’t want a vegan version. What hit about the product was the low calorie aspect. So, the brand repositioned their messaging and have seen success as a result Snacklins is one of my favorite brands. They were on Shark Tank, Mark Cuban invested, it’s exciting.
Q: How is Union Kitchen helping brands succeed in an omni-channel world? How are you thinking beyond traditional retail to help your brands win?
Stores are a great place to learn. It's a different customer set than online. Thinking about in-store versus online, everything has to change. Even what flavors people prefer can shift a bit between the channels. We need to help brands figure out how to update their packaging, change their case packs, and figure out pricing.
A great example is Revol Snax, which was built in both channels. They are Keto friendly dessert products. We worked closely with their co-founders, Dave and Nadine, to understand how the landscape compared online versus in stores. Online, you can identify and engage clear affinity groups. In stores, you are exposed to a whole host of shoppers. Stones Throw Foods is another exciting brand. They do hash breakfast skillets and Swapples (yucca-based waffles). Takes on nostalgic food favorites that are still doing well. Companies like Pinsa love and Attain Foods are really attractive to customers. When you're able to pair something familiar with something new, that’s a win.
Q: How do you think about your consumers?
Union Kitchen is always trying to learn from our customers. We have a prepared foods area with sandwiches, coffees etc. and that tells us a lot in terms of preferred flavor profiles, the types of products people look for most often, and how adventurous people want to be. Usually, people like what they like. When there's a comfort brand that people love, we take advantage of that and can learn a lot. We are able to provide data reports against other products, both anecdotal and analytical.