Cooking is the heart and soul of communities around the globe. In the U.S., we enjoy the most diverse food in the world thanks to centuries of immigrants from all regions of our planet.
But one crucial demographic has traditionally been excluded from participating in our commercial food economy—home cooks.
Until recently, people in San Diego could not legally sell their home-prepared food to the public. Thousands of talented cooks who make up the “informal food economy”—at-home parents, caretakers, immigrants with limited English proficiency, and low-income individuals—faced significant barriers to entry into the food industry.
San Diego finally turned a corner in January 2022. The County Board of Supervisors launched a two-year pilot program for Microenterprise Home Kitchen Operations (MEHKOs) to become legal businesses in our region.
Business For Good supported the 2018 California bill (AB-626) that legalized MEHKOs. And in June, BFG was awarded over $35,000 in grant money to help San Diego MEHKOs with start-up training, business mentorship, and technical assistance. Read on to learn more about the role of BFG in this exciting opportunity!
What are MEHKOs and how do they work?
A Microenterprise Home Kitchen Operation (MEHKO) is a food facility operated by a resident in a private home. MEHKO owners can serve all different types of hot and cold foods with some exceptions.
The COOK Alliance, a San Diego nonprofit, is the leading voice for home food entrepreneurs in the U.S. Their groundbreaking 2018 home cooking legislation (AB-626) created the very first “Microenterprise Home Kitchen” permit in California.
MEHKO permitting began in San Diego County in February 2022. To get a permit, every MEHKO must do the following:
- Obtain a Food Manager Certification (take a course + an exam)
- Submit their Standard Operating Procedures to San Diego County of Environmental Health
- Undergo a yearly inspection
- Limit their gross annual sales to $50,000 (adjusted to $54,100 for cost-of-living)
- Cap their production at 30 meals/day and 60 meals/week
What are the benefits of MEHKOs?
Thousands of Californians are already participating in the informal food economy due to the substantial capital needed to get started in the commercial food industry.
For example, brick-and-mortar food businesses require about $400,000 in start-up capital. Even food trucks can cost around $50,000.
Yet MEHKOs have an average start-up cost of only around $1,000, creating a viable pathway to entrepreneurship for underserved populations.
The main benefits of MEHKOs fall into three categories: inclusion, incubation, and innovation.
- Lowers the barrier to entry: Individuals who are lower income, undocumented, caretakers, or elderly can make a living from the convenience of their homes
- Improved access to nutritious foods: Provides fresh, nutritious foods to those living in San Diego County’s food deserts
- Provides formal training: Safety guidelines and food manager instructions that can help grow their businesses, should they choose to do so
- Adds to generational wealth: Creates a sustainable home business that can help elevate MEHKO owners out of the lower-middle income bracket
The County has assigned caps to production and income levels for MEHKOs, designed to help them avoid overextending.
Caps also help ensure MEHKOs and brick-and-mortar restaurants can co-exist without an adversarial attitude. MEHKOs are capped at:
- 30 meals/day and 60 meals/week
- $50,000/year in gross sales (adjusted to $54,100 for San Diego County cost of living)
There are so many ways that MEHKO ownership can help people try out new ideas or get them started with something great. Here are some examples:
- A test kitchen before opening a restaurant
- A personal chef preparing nutritious meals for seniors
- Expanding an existing menu
- A home cook making takeout meals for neighbors
- A family hosting cooking classes and a supper club at their home
Business For Good and the San Diego Food Justice Project
Business For Good teamed up with four other local organizations to form The San Diego Food Justice Project (SDFJP). It’s a collaboration designed to serve the needs of the most vulnerable food industry entrepreneurs in San Diego County: MEHKOs, sidewalk vendors, pop-ups and caterers, and immigrant-owned restaurants.
In addition to BFG, the SDFJP includes:
- The COOK Alliance
- Jacobs Center For Neighborhood Innovation (JCNI)
- REC Lab at San Diego Miramar College
- City Heights Community Development Corporation (CHCDC)
Earlier this year, the SDFJP applied for the State of California’s Social Entrepreneurs for Economic Development 2 (SEED 2) Grant Program. The SEED 2 Grant will help these underserved entrepreneurs build successful, long-term businesses in San Diego County.
We are thrilled to report that the San Diego Food Justice Program was awarded a total of $1 million for our SEED 2 Grant. It will be applied as follows:
- $750,000 for directly funding MEHKOs in the form of micro-grants
- $250,000 in programmatic funds for educational and technical support as well as mentorship stipends
“We’re really excited about this program because we are showing systems change,” said Alexis Villanueva, of City Heights CDC and Vice Chair of BFG Board of Directors.
While a MEHKO permit is open to anyone regardless of their socioeconomic status, the SEED 2 Grant focuses specifically on helping individuals with significant employment barriers in San Diego County.
The SEED 2 Grant will give 280 San Diego microgrant recipients the business basics they need to succeed:
- A start-up capital grant of between $2,500 and $7,500
- The G.E.T. Cooking Training Program—How to start, build, maintain and/or grow a small business in California. These workshops will be virtual and in-person, and be available in multiple languages.
- Ongoing technical assistance
- 1:1 mentorship from established local business owners
The role of Business For Good in helping MEHKOs succeed
Starting this fall, BFG will use $35,000—our share of the SEED 2 Grant’s $250,000 in programmatic funds—to help MEHKOs succeed over the course of two years. Our support includes:
- Stipends for five BFG members to serve as 1:1 mentors for MEHKO owners
- Community outreach
- Providing technical assistance
“BFG is literally providing social change in a way we haven’t seen before,” Alexis said. “This is really unique for our organization. BFG started by co-drafting AB-626 in 2018. We spoke with legislators, policymakers, and the Board of Supervisors on behalf of the vote. And now we’ve been granted the funding to actually implement the work. You don’t get to see that very often.”
Alexis also described how the SEED 2 Grant perfectly exemplifies the mission of Business For Good.
“A social impact-driven, business-led policy group like BFG is pivotal to the beginning stage of shaping policy: deciding who should be at the policymaking table, what voices we should be listening to, and what experts should be involved,” she said.
Mentorship is the primary way BFG will support MEHKOs. And we are very well-equipped to do so.
Angel Stancer, Manager of Business Services at the San Diego Workforce Partnership (SDWP) is Chair of the BFG Business Resources Committee. Angel is an expert at mentoring and training small businesses. She has engaged in this type of work for years and has access to all the specific resources needed to get it done properly.
“I’ve always been really passionate about supporting social change through workforce programming and business engagement,” Angel said. “At SDWP, the businesses are our clients. And with the majority of our local economy being small businesses, it’s really a personal mission for me to help them grow.”
Angel will oversee the MEHKO mentorship program at BFG. Her goal is to focus on recruiting BFG mentors who work in the food industry so they can provide more of that aligned guidance to MEHKO owners.
“There’s a lot of power in businesses mentoring other businesses,” she said. “They’ve gone through it. I’m really excited to get our BFG mentors everything they’ll need to be great support systems for microgrant recipients.”
Capital and marketing are always the two things that businesses need to get off the ground. Three-quarters of the SEED 2 Grant money will provide MEHKOs with the capital.
And a good deal of the marketing support will come from our BFG mentors. They’ll share connections, resources, and success tips. Each mentor can help these new entrepreneurs avoid missteps, headaches, and unnecessary costs so they can launch their home kitchen even faster.
The future of food justice in San Diego
BFG believes that the SEED 2 Grant is only the beginning of wholesale systemic change in the San Diego food industry.
“Going forward, we plan to match our $35,000 in SEED 2 Grant funds so that we can continue these efforts on a larger scale after the two-year grant program runs out,” Alexis said. “Over the next two years, we’ll collect a ton of data that will be super helpful in us continuing to replicate this model. There are now a lot of local partners who want to contribute to BFG’s efforts in some way.”
MEHKOs also have the potential to elevate the entire local food economy in San Diego, helping to grow food justice even faster in our region.
“With BFG as a collaborator in the San Diego Food Justice Program, it shows how our organization can intersect with the food landscape and folks who are trying to enter into entrepreneurship in a way that’s been traditionally almost impossible,” said Mikey Knab, Co-Director of Policy at Climate Action Campaign and Chair of BFG Board of Directors.
For example, it can be tough for commercial kitchens to only source their food locally from small farms or community gardens. Doing so would require restaurants to constantly change their menus due to seasonality and availability, and customers want consistency.
“But when you have a MEHKO, with a cap of only 60 meals a week, sourcing all of your food locally is entirely possible,” Mikey said. “So MEHKOs are not only a way to support the new entrepreneurs trying to make food from their home, but also the gardens that surround them. We’re increasing the volume of locally grown, nutritious, planet-friendly food for everyone.”