Launch of Naturally Bay Area a catalyst for CA food brands. But where will they manufacture?

Last November, we reported that a group in San Francisco was in the process of bringing Naturally Boulder‘s community-building model west, to better organize and accelerate northern California’s natural and organic product ecosystem. Vision became reality January 21 with the sold-out kickoff of Naturally Bay Area at the Winter Fancy Food Show in San Francisco.

Naturally Bay Area is the first “regional affiliate” of a fledgling Naturally Boulder network. On one hand, it’s an acknowledgment of the staggering success of Colorado’s natural food and product community and NB’s community-building methodology. It’s also more proof, if any was needed, of the profound change transforming America’s gargantuan food industry. From Boulder to San Francisco, Brooklyn to Portland, a wave of early-stage brands has captivated both consumers and the industrial brands that, until now, have decided what we eat and how its made and distributed. Today, industry innovation resides squarely in emerging food and product communities throughout the country.

Naturally Bay Area will provide structure and organization to what until now has been a loose ecosystem of brands, service companies, investment partners, and other business mentors. If history repeats, Naturally Bay Area will become a community-building engine, nurturing startups, accelerating promising brands, and enhancing the delivery of key services to natural product entrepreneurs.

Less certain is how brands will manufacture. With a more efficient commercialization of ideas, demand for manufacturing should explode. But within the Bay Area’s technology-driven economy, prospects for a qualified manufacturing workforce are sketchy, and manufacturing infrastructure lacking. Where will Naturally Bay Area members make their products?

The evolution of Colorado’s model suggests that a network of new production resources will develop alongside brands. Powered by technology from food-savvy entrepreneurs like The Food Corridor, it should be much easier for early-stage brands to locate commercial kitchens than it was for companies a decade ago. Brands should be able to escape the limitations of one’s own kitchen earlier and easier.

For later-stage companies, a co-packer that manufactures for multiple brands is often the next destination. Colorado’s network of co-packers has been every bit the catalyst as brands in the development of its natural food play. Will a more capable network of Bay Area co-packers develop to meet demand?

If brands can’t manufacture here they’ll move or sell — to industrial producers with the capability to scale manufacturing and accommodate an influx of new products. It’s the goal of industrial players today to do just that, to innovate through acquisition instead of organic growth. Big Food has waved the white flag: It’s given up on competing with the innovation flashed by early-stage food companies. Today it buys innovation.

Exits are fine, but the goal of Naturally Bay Area and the public/private resources sure to rally in support, is the development of a thousand new brands, employing dozens of employees each, driven by the promise of sustained business and manufacturing support. It’s the promise of the sector in California or Colorado: to incubate middle-market growth companies that cut a wide swath through the economy, not the narrow, top-down ecosystem that consumers and entrepreneurs are abandoning.

Who, then, will rally California’s manufacturing ecosystem? In San Francisco and the Bay Area, the workforce challenge alone is enough to stop development cold. In this tech-centric economy, where will food manufacturing’s new labor force come from? What cities and communities will move to develop facilities and provide incentives for companies to stay and thrive? Where will a new manufacturing workforce find affordable housing?

And as Naturally Boulder evolves to the Bay Area, Los Angeles, and San Diego, are public and private resources ready to rally around manufacturing?

Colorado’s ecosystem has grown organically, without a concerted effort from public officials to juice its development. Given the scale of the manufacturing challenge, California’s natural product innovators may not have that luxury.

Bart Taylor is publisher of CompanyWeek. Email him at btaylor@companyweek.com.