Growth in the city's food and beverage industries is bubbling over, outpacing the rise of businesses, but the local startups need some juice to keep growing, according to the New York Daily News.
Food and drink manufacturing companies jumped 11 percent to 1,097 from 2008 to 2012, according to a study commissioned by City Council Speaker Christine Quinn and conducted by the Pratt Center for Community Development.
According to the Daily News, in the past year, at least 40 new food and beverage manufacturers were rooted in the city.
"There's clearly a big appetite for economic growth in our local specialty food manufacturing industry," mayoral hopeful Quinn told the Daily News. "With over 1,000 firms, these businesses have rebooted this sector of our economy, remaining as a bright spot throughout the recession, and are poised for even more growth."
The Food and Beverage Association of America, a non-profit organization composed from individuals in the hospitality industry, is dedicated to helping promote and advance relationships between members. Encouraging potential businesses to move forward while providing industry-related scholarships, and providing support for critical social issues.
The food and beverage startup face challenges, especially when they transition from self-distribution to hiring third-party distributors, according to the study.
According to the Daily News, while distributors are desperate to gain access to larger retail accounts, small companies often can not afford costs, which include terms and limitations. Startups struggle to find affordable manufacturing space.
According to Mike Schwartz, co-founder of Long Island City, Queens-based BAO Food and Drink, a maker of organic and fermented food and drinks, startups also have a hard time accessing capital funding.
"The distribution model is very complicated," Schwartz, told the Daily News. "Distributors are large and they don't necessarily want to deal with small companies."
According to the Daily News, the study recommendations for the city, include creating a "specialty food industry economic development corporation that would offer education, marketing, exporting and cooperative services."
Some startups can apply for a loan program for food manufacturers to help them along as they make the leap to third-party distribution. The FBA invests in the future of the hospitality industry by offering scholarship and awards; financial assistance for professionals who have demonstrated need and maintained structure. In 1997, the association committed a five-year pledge of $100,000 to fund a learning center in the name of the Food and Beverage Association of America.
"The reality is, local food manufacturing is unbelievably strong," Schwartz told the Daily News. "If the city can help support it, it could create a very large cottage industry."
