Dive Brief:

• Raley’s will sponsor a food lab within the Lab@AgStart incubator in Woodland, California, a press release from AgStart announced last week.
• Raley’s Food Lab, a shared-use kitchen incubator accessible to local food entrepreneurs, will serve as a location for product experimentation, development and testing. Raley’s will also offer mentorship to participating entrepreneurs on scaling their businesses. 
• Raley's Food Lab will help the grocery chain develop and test new products that it could potentially bring to its stores.

Dive Insight:

Located in the hills of Northern California, the lab, which plans to open its doors on April 1, will draw from the region’s diverse agricultural industry, as well as take advantage of several food processing firms located in the area. 

These types of labs can offer grocers an opportunity to connect with local startups and experiment with different products before choosing which ones could hit store shelves. Kroger recently funded grants to food entrepreneurs to cover rent costs at Northern Kentucky's Incubator Kitchen Collective. It can also promote an image of community-building among consumers. 

The access to early innovation could be a boon for Raley's, which promotes its use of local farms, selling produce from nearby establishments. Its private label line Purely Made also provides clean label products and include locals influences. 

The $1.5 million facility was created by a public-private partnership between food retail sponsors, the U.S. Economic Development Administration, Yolo County and the City of Woodland. The incubator aims to use sustainable practices in its work. It will be powered in part by on-site solar-covered parking and use LED lighting, for example. This aligns with some of the company's ethos on its website, which emphasizes the grocer's work with suppliers to provide sustainable seafood, cage-free eggs and minimally processed pork, among other efforts. Raley’s other existing sustainability projects include a local effort to reduce microplastics in Lake Tahoe, LED lighting for new store construction and reflective “cool roofs” to reduce air conditioning waste. 

In addition, the Raley’s Food Lab will provide entrepreneurs ready access to the adjacent Yocha Dehe Lab, which provides nutrition and health assessments, as they work to build their brands.

A Food Corridor report from January 2020 on shared-kitchen incubators found that professional development and capacity-building support was in high demand among food entrepreneurs. The report noted the growth of the budding industry was stymied by a lack of formalized regulation and limited access to working capital.

But the report, which drew from survey responses by 180 incubators, concluded that such facilities can provide critical support for successful small business growth as long as there exists a “community of actors and resources” funding and supporting new projects. This community is particularly critical for entrepreneurs who are immigrants, women and refugees.