The Pop-Up Business Model for Food Startups

Zaarly Bazaar Pop-Up Market in Seattle

Zaarly Bazaar Pop-Up Market in Seattle

By now you have probably heard the term pop-up. You might not know what a pop-up is or how they function but the concept is becoming widespread around the world. But pop-ups are not a brand new hipster creation. In fact, pop-ups have been around for millennia—but they’ve only recently become mainstream.

So what is a pop-up?

A pop-up is a temporary store or place to sell or produce a product. Centuries ago, apprentices learning a trade would "pop-up" in their master's space before they were ready to go out on their own. Today there are many types of pop-ups including those focused on food and food production, art and music, and retail goods. This instance of the shared economy has endured because it is an affordable way for entrepreneurs to enter an industry without the typical risks or capital associated with a brick and mortar startup. Have you ever noticed KFC/Taco Bells or Taco Bell/Pizza Huts? Or costume distributors that pop-up in vacant storefronts during Halloween and then disappear as soon as the holiday has passed. It’s more cost effective for some entrepreneurs to operate using shared resources and empty space. Pop-ups are a way for food artisans to test their product, build a following and save capital to take their business to the next level.

Green Grocer (Windsor, CA) puts on a pop-up for Bay Area Green Tours on a farm in Petaluma,  showcasing all local products. 

In my opinion, the most interesting type of pop-ups are in the food industry. Many retail pop-ups function by taking over a completely empty space like a farmers market or mall for a given period of time. However, food artisans are constantly coming up with creative ways to build their businesses starting with pop-ups. Food artisans and chefs can rent out spaces from restaurants and kitchens that are vacant or sitting unused for certain periods of time. When facilities and spaces are sitting empty, potential is being wasted. Value-added food producers can rent commercial and community kitchens at schools, churches and industrial production facilities. By better utilizing this space, our food artisans are adding to the sustainability of our communities and economy. 

The Benefits of Pop-Ups

In addition to helping better utilize community resources, food artisans and chefs can save tons of money by starting out as pop-ups. The average restaurant in a major metropolitan area costs around $500k to open and operate during its first year. This has to do with the high costs of equipment and leases that are due upfront. These costs are often hard to recoup which is why only about 10% of restaurants make it to their second year. Pop-ups offer a way for chefs to minimize that risk by sharing facilities that aren’t being used all the time. The average cost of operating a pop-up is $2k-$5k per week or about one fifth to one-half the cost of starting from scratch. These savings can really boost a chef's brand and help them to year two and beyond.

Jorge of Sabor Mexicano (Berkeley, SF) hosts a private farm fresh pop-up where guests can harvest the food they cook for lunch.

But pop-ups don’t just help the chefs, they also help the community and the owner of the unused space. The primary lease holder is able to share their space and earn revenue during times their operation would normally be empty. Opening their space more frequently also allows for more exposure. If a pop-up chef is gaining momentum and support from friends and family, the foodies who eat there are then exposed to the restaurant and are likely to come back with or without incentives. 

Communities also benefit because pop-ups chefs frequently buy from local producers and keep money rotating within the local economy for that much longer. Pop-ups are great options for filling vacant spaces that line many neighborhood streets. If the space has been sitting idle for a while, a pop-up operation can help liven it up. Communities who embrace the pop-up concept and find ways for artisans to do their thing are in a better position to spark community and economic development. 

More to Come

It’s clear that pop-ups are becoming an economic and cultural force to be reckoned with. But it can be quite difficult to actually get a pop-up going without the proper tools. Anyone can have an idea but there needs to be an easy way to successfully execute it. There’s nothing worse than getting your hopes up only to have them shattered by an unsuccessful pop-up. 

PopUp Peanut (Berkeley, CA) puts on a pop-up once a month (with a DJ!) during the summer featuring various types of peanut inspired food. 

To help artisans navigate the pop-up realm and give them the resources they need to be successful, we’ve created PopUpsters. We want to help artisans start, grow and expand their businesses by giving them the tools and audience they need to be successful. 

Over the next couple of months, as we roll out PopUpsters.com and as I finish my creative component on pop-ups for my masters degree, I will be writing more posts that focus on the ins and outs of starting and maintaining a pop-up food venture. From planning to executing to maintaining, I’ll be doing my best to give a comprehensive guide for the food artisan. If there are specific types of topics you want to learn about feel free to email me at aaron@popupsters.com.  Until then sign up for our launch updates at www.popupsters.com.

Cheers!

Aaron

 

PopUpsters is a platform for food artisans to start, grow and expand their businesses. We help artisans cut their startup costs by connecting them to vacant or underused space and to people who want to buy their goods. PopUpsters is an all around resource guide for artisans to navigate their way through the startup phase and beyond. Contact Aaron at aaron@popupsters.com to get involved!