Immigrant-Led Food Startups Face an Uphill Battle in the Pandemic

This story was originally published on Civil Eats.

This spring, as Tarun Bhalla was testing out eight-ounce curry packets for a new line of meal kits, he found that they had a tendency to burst open in a shipping test. He’s been looking for a company that can manufacture stronger packets ever since, but he still hasn’t found one. And meetings are hard to arrange during a global pandemic.

Bhalla and his wife Anu launched Meal Mantra brand curries in 2016, and they had just begun ramping up production when the coronavirus hit. They turned to the idea of selling meal kits after their biggest client closed, grant applications were denied, federal aid was out of reach, and bank loans were looking impossible. Bhalla has no backup plan and no clear path forward.

“That’s all we think about,” says Bhalla. “We have to see this year out. It’s survival, that’s it.”

The Bhallas and countless food entrepreneurs like them are essential contributors to a diverse economic landscape. They enrich cultural exchange through culinary diplomacy. They’re immigrants, they’re working parents, and they’re lifting themselves out of poorly paid wage work. And yet when it comes to staying in business during the pandemic, many have been left to their own devices.

Earlier this year, the Bhallas struck a deal to sell their pre-made curries to Boston College, which wanted to add them to five cafeteria menus after a successful pilot. But when the campus closed down in the second week of March, Meal Mantra lost 20 percent of its revenue overnight, and left the Bhallas with a glut of product.

The future of the company was suddenly in jeopardy. Self-professed marathon-running health nuts, the Bhallas had long been disappointed with the highly processed curries cluttering supermarket shelves. Anu, granddaughter of tandoori innovator Kundan Lal Gujral, adapted her recipes to incorporate fresh, New England-grown ingredients, and their lemongrass and galangal-infused Goan Curry won a Sofi Award in 2019, the same year their revenues hit $60,000.

Meal Mantra was founded with money from a pharmaceutical business the Bhallas sold before immigrating from Delhi four years ago. Their daughter is heading to dental school and their son is a college sophomore. Tarun just turned 50 and the company was supposed to see him through to retirement.

“We were just plowing that money back into our business hoping this would grow,” he says. “And it was growing.”

In India, Tarun could pick up the phone and connect directly with buyers at colleges, grocery chains, and banquet halls. In America, finding new clients meant trade shows.

“Food shows are the only way we can really get our product in front of our customers and get new accounts,” he says. “We signed up for six shows this year, but sadly none of them are taking place.”

Retail hadn’t been a focus, but Meal Mantra curries had been available in a few local grocery stores. After the pandemic began, they shifted production from gallon bags to jars, and set their website up for online sales. Familiar customers placed orders, but it wasn’t nearly enough to make up for losing Boston College.

Adapting to a new reality

Companies like Meal Mantra are among the most vulnerable to disruptions caused by the coronavirus, according to Leticia Landa, deputy director of the food incubator La Cocina in San Francisco.

“Anybody who doesn’t have a lot of savings isn’t going to be able to invest in the business in the way that it’s going to need to [adapt],” she says. “Businesses that are just getting started, or families that are in business together and there’s not any outside source of financial stability, that’s also challenging.”

For the past 15 years, La Cocina has helped low-income women and immigrants create financially sustainable culinary food businesses. Today, they’re just helping their members survive. A standard incubator cohort is 34 businesses, but that number has almost doubled since a number of recent graduates are still working with the organization.

Many of their restaurants and caterers have closed temporarily, but packaged food producers are struggling as well. People are cooking at home more than ever, but getting packaged products onto grocery store shelves is expensive and the margins are thin.

“There’s very few small regional, local food producers making packaged foods who rely entirely on grocery [sales],” says Landa. “That’s one of the things they’re doing, and then they’re also selling at farmers’ markets or doing catering.”

Supermarket shelves may be expensive and competitive real estate, but Lilian Ryland aimed to make in-store retail her coronavirus salvation.

The year had started off great for Ryland, the sole proprietor of Kent, Washington-based Naija Buka, which is named for the tiny pop-up roadside restaurants in her home country. “In Nigeria the best meals you’ll ever eat are from bukas,” says Ryland.

Reliable weekly catering gigs brought in good money without too much stress (she refuses to work weddings), and without too much time away from her children. But when Seattle’s office buildings closed down, there were no corporate workshops or off-site meetings to cater.

Office closures also cut into Ryland’s other main gig — preparing freezer-ready meals for busy professionals in her Nigerian expat community. Sales of those meals dropped 68 percent by April.

“There was so much uncertainty; a lot of people didn’t want to spend that money to buy food,” Ryland says. “And they were at home, so they could cook.”

Fortunately, Ryland had also begun producing shelf-stable sauces — first jollof, and then Everything Sauce — through Seattle’s Food Innovation Network and started pushing them alongside meal kits through social media and her website. But she knew she needed more outlets.

In December, Ryland had pitched Naija Buka to PCC Community Markets, a Seattle-based co-op. They agreed to carry a couple sauces on condition that she eliminate vegetable oil and cornstarch. Ryland reworked the recipes, but finding a distributor wasn’t easy.

“In Nigeria you can just jump out of your house, sell food, and people just come and buy it,” she says.

Seven years ago, before joining her then-fiancé in America, Ryland was a journalist and digital editor in Abuja. She worked at Nordstrom after immigrating until she was eight months pregnant with her first child. She impressed other expats with her Afang soup and jollof, built a reputation at farmers’ markets, then switched to catering corporate events after having her second child.

So it was frustrating when her applications and emails to regional food distributors were ignored, and infuriating when she did hear back.

“They said, ‘We’re not sure, it’s not something that’s familiar to us’,” she says. “Which is offensive to me. They have a wall full of pasta sauces and here I am with the first ever authentic Nigerian jollof sauce — and you have a huge African community here.”

It took five months before the Puget Sound Food Hub, a member-owned cooperative, agreed to distribute her sauces in May. Then, in mid-June, PCC started selling them at their newest location.

It was exciting, and a big financial relief. Then, less than a month later, Naija Buka was available at all 14 PCC locations after loyal customers waged an informal campaign demanding greater availability. But not all Rylan’s peers have been so lucky.

Fresh food vendors face another set of challenges

Shelf-stable products like Meal Mantra curries and Naija Buka sauces can outlast temporary fluctuations in demand. They can be centrally produced and distributed easily. But fresh food vendors also have to be immediately responsive to market changes or their inventory spoils.

“For food producers who are used to selling through farmers’ markets, catering, or doing groceries for the grab-and-go section, it’s pretty cost-prohibitive to ship cold unless people are buying a big quantity,” says Landa.

Take Oyna Natural Foods. The three-year-old company makes kuku sabzi and other Persian frittatas, and it had just expanded its retail footprint from six to 20 stores early this year. Then, the company’s owners pulled out of the new locations when coronavirus restrictions brought in-store demonstrations to an end.

“Education is definitely a huge part of our business,” says Oyna co-founder Mehdi Parnia.

Parnia and his wife, Aisan Hoss, built up their culinary reputation face-to-face at farmers’ markets, where they could offer samples, introduce themselves and a little bit of their culture to connect with potential customers. But when it’s sitting alone on a grocery shelf, Parnia found that it is harder to introduce kuku to new markets.

Oyna Natural Foods was expected to triple its business this year, according to Parnia. The one-time construction engineer took up food entrepreneurship after immigrating from Tehran to the San Francisco Bay Area in 2013 so Hoss could pursue a career as a choreographer. The couple started 2020 off focused on expansion, attending specialty foods trade shows, meeting store buyers, and finalizing new branding.

Instead, when cities shut down, business contracted sharply. Sales at the six stores where Oyna Natural Foods was already established became inconsistent. One week, Parnia would restock his entire inventory, the next week nothing sold. Other small vendors disappeared from the shelves entirely.

“The grab-and-go, ready-to-eat meals section has been significantly hit,” says Parnia. “Most of the shoppers were workers wanting to get lunch.”

Parnia and Hoss rushed to create a web store, photographing kuku and assorted sauces themselves. They now make deliveries once a week throughout the Bay Area. Still, they’re selling about 400 a week as opposed to an average of 2,000 a week last year.

They’ve experimented with shipping discounts and deals, and they’re courting new customers through social media, but Parnia finds that his inability to grasp the nuances of American pop-culture render Instagram a foreign language. Social media is “worse than going through the immigration process itself,” he adds.

Money is tight. Parnia admits that if La Cocina hadn’t suspended rent they would have stopped production entirely, and even without that overhead the business is in survival mode. But the pressure to keep going is more than financial.

“This is like a baby,” says Parnia. “We have been putting a lot of sweat and tears to make this business what it is today. If this goes away, it’s going to be a really, really painful and hard situation for me to figure out what to do.”

Get to where the sales are

Landa’s pandemic advice to La Cocina members is: “Cut your expenses as much as humanly possible; try to figure out where the sales are.”

One such member, Hayward, California-based Alicia’s Tamales Los Mayas, is selling tamales to Bay Area school districts for their lunch programs as an option to be eaten at home during the pandemic. Meal Mantra was able to sell some leftover curry from their Boston College production at cost to a food relief program run by the city of Boston.

La Cocina has been reaching out to food critics for reviews, and to national retailers like Williams + Sonoma, which carry assortments of specialty foods and packaged meals. They also sell La Cocina Food Boxes packed with nine items from a rotating cast of members. Oyna Natural Foods has been featured.

So has Teranga, the baobab-based juice and energy-bar company from Nafy Flatley. In early 2020, Flatley had her products in almost 40 Bay Area retailers and did frequent in-store demonstrations.

Flatley also catered events and she saw the crisis impact her business early on. By late March, roughly half of the stores and cafes selling Teranga products closed or started buying less.

“It’s been very hard to see those stores close and [know they] might never come back again,” she says.

Farmers’ markets became a stressful and profitless endeavor. Flatley directed customers to her online store and closed her four stands. By mid-March, she was stuck at home with three kids who no longer had schools to go to, trying to devise ways to salvage her business. By the end of the month, she was selling ready-to-heat meals through her website: Maafè one week, Nambè another, Yassa for Independence Day week.

“It’s not making up for what we were making before, but at least it’s keeping us on the market,” she says. “It’s keeping us producing. It’s keeping in people’s minds that we’re not closed.”

The private meals are more work. It takes longer to package individual portions than to prepare catering trays, and only four businesses at a time are allowed in the La Cocina kitchen, which is half the businesses typically allowed to operate there at a time. There are additional costs as well. Flatley pays extra for eco-friendly containers. She has a reserve of imported baobab and hibiscus, but ginger has doubled in price.

“It’s very difficult for me to increase my prices because I don’t believe in selling expensive food,” she says. “Everybody should have good, healthy food and it shouldn’t cost an arm and a leg.”

The extra labor is offset by Flatley’s husband, who delivers meals, restocks store shelves, and buys supplies. But he can only help because he is no longer working. The family depends on Teranga now as its sole source of income.

“I would like to move forward with all of the goals and plans and ambitions I’ve had since the beginning,” says Flatley. “That’s one of the reasons I immigrated to the United States. I think the American dream is still possible for me and my family.”

Flatley, who is from Senegal, worked in marketing before leaving to care for her firstborn son, born premature, and her mother, who was diagnosed with dementia around the same time. Selling the juices and energy bars her family made and sold back home when she was a child through word of mouth led to a new career path that she could balance with family.

But, as of early July, she says, revenue had been slashed in half. And while Teranga isn’t operating at a loss, it can’t provide a cushion for emergencies or next steps either.

Federal bailout fails small businesses

All the entrepreneurs who spoke with Civil Eats for this article are wary of taking on debt, and some distrust banks outright.

“I’ve been denied loans because of who I am and what I look like,” says Flatley. “I have good credit. I can show them proof of how the business is sustainable and is growing every year, but they don’t care about that.”

However, given the dire circumstances, even wary business owners have looked into federal relief programs this spring. PPP loans were met with widespread confusion over who qualified and how to apply. When eligibility opened to owners, gig workers, and the self-employed, the confusion worsened. Banks were inundated with applications, and those without an existing business relationship with the bank were all but guaranteed to be lost in the chaos.

“It’s the big players that have relationships with their banks,” says Meal Mantra’s Bhalla, who doesn’t even have a U.S. credit score.

La Cocina was able to secure a PPP loan and keep its full staff, who researched relief programs across the governmental strata. The organization partnered with other San Francisco community agencies, and tried to find the best options for each of their members. Not everyone qualified for assistance, but Landa says that everyone who did apply got it. La Cocina also successfully raised over $500,000 to create an in-house emergency relief fund.

But most small food producers don’t have La Cocina in their corner.

“It was super confusing the whole time. And they kept changing the rules,” says Landa, noting that she’s a native English speaker born and raised in the U.S., college educated, and familiar with institutions. Anyone newly immigrated, speaking in their second language, or unaccustomed to traditional banking institutions would have found the PPP process impenetrable, she said.

None of the entrepreneurs we spoke to received first-round federal relief. Several applied for grants, and some received them. Since she spoke with Civil Eats, Flatley applied for a loan through the Small Business Administration. “I was granted a loan, which is far from enough but I will use that for now until other opportunities come up,” she says.

Seeking a path forward

As the pandemic rages on, there’s no clear future for most of these small food businesses.

In Portland, Oregon, Wambui Machua opened Spice of Africa in mid-February with the intention of serving lamb burgers, curries, and Kenyan tacos in a new food hall — but when that closed down in the spring, she had to sit tight until customers returned in mid-June. But sitting tight didn’t come easy to an ambitious entrepreneur who has been building her business for over a decade, including catering, farmers’ market sales, and classes.

After graduating with a degree in business management, she pitched a cooking class to Portland Community College with a home-made brochure. “I started my business to share and educate people about my culture,” says Machua, who hails from the Kikuyu tribe in Central Kenya.

Last year, Spice of Africa brought in approximately $100,000, its most successful year. Machua would book three, four, sometimes more gigs in a day, delegating tasks to eight or 10 contract workers as needed. After the coronavirus hit, she worked alone staffing one farmers’ market stall on weekends.

There was never any question of shutting down and finding work elsewhere. “My mother says that I’m not employable, because I have been my own person for way too long,” she says.

Things could have been worse. Even with a teenage daughter, Machua has low expenses and a stable home. The landlord of her restaurant suspended rent, and the angel investor who backed the kitchen build-out did the same. Regular customers called in bulk orders of samosas to pick up at the farmers’ market. Then, in late June, she accepted an offer to teach an online cooking class. Going virtual would be an adjustment—there would be less dancing, no ability to sample other people’s dishes. But the first virtual class went so well Machua began setting up her own.

After three months, restrictions on indoor dining were relaxed in Portland, but Machua wasn’t sure whether customers would feel safe enough to return. She hoped so — she would have to start paying rent again — and had been passing out discount cards at the farmers’ market. But with coronavirus infections climbing, she also didn’t want a crush of customers at the counter. It was time to look into delivery apps and hire a business manager.

Everyone Civil Eats spoke to is slowly plotting a path forward. Nafy Flatley worries about the increase of infections in California but remains optimistic about opening a bricks-and-mortar location for Teranga at the Municipal Marketplace, a public-private venture in San Francisco that will offer kitchen and retail space to several La Cocina incubator graduates. Construction has been delayed, but she still holds out hope that it will open.

“I have a deep belief that we’ll recover and bounce back and life will be normal again,” Flatley says. “We don’t know when that’s going to be but slowly, step-by-step, we have to walk towards our goals.”

Mehdi Parnia wants to make kuku sabzi a regional sensation, then expand the brand nationally. Positive feedback from trade shows, and the interest from retail outlets, gives him reason to believe such growth is possible. For now, Parnia has been in talks with Tastermonial, an online market and food box company catering to people with specific dietary needs.

Although Lilian Ryland is doubtful her catering business will rebound, she’s still invested in the Seattle-area food scene. She wants to see local farmers grow crops that African chefs can use instead of dried imports. One earlier attempt at cultivating the scotch bonnet peppers that give her sauces a kick failed, but she believes the Nigerian community alone could drive market demand.

Tarun and Anu Bhalla are taking the longview, as they work to find stronger sauce packets for Meal Mantra. As worried as Tarun admits to being, he also believes they have a proven product that will become more popular over time. In the meanwhile, they’ve introduced a few chutneys that they’ve been selling online and at the farmers’ market.

As La Cocina’s Landa sees it, the greater community shares some responsibility in supporting small business owners who add diversity to the culinary marketplace, and — through their sauces, dishes, and immersive cooking classes — to the variety and complexity at the heart of American culture.

“I’m hoping that there’ll be continued interest in supporting these businesses,” she says. “Pay attention to focusing on smaller, local brands when you do your grocery shopping.”

• Immigrant-Led Food Startups Face an Uphill Battle During a Pandemic [Civil Eats]