West Chester's Artisan Exchange, cooking up business together

Marianne Cozzolino, co-owner of Jenny & Frank's Artisan Gelato, recently found herself short three dozen eggs - just as eggnog gelato season was getting into full swing.

Fortunately, she shares her production space with a half-dozen bakers, one of whom had eggs to spare.

That kind of neighborly assist is an everyday occurrence at Artisan Exchange, a year-old artisanal food hub hidden within a nondescript industrial park in West Chester.

This bland backdrop is the unlikely testing ground for an innovative new model for incubating gourmet food producers: Offer them affordable, flexible work spaces; provide a wholesale distribution network to get their products to market; and add retail opportunities to stimulate early cash flow.

The latter comes in the form of a weekly artisan market, held Saturdays in the exchange's cavernous distribution corridor and featuring artisans' products as well as food trucks, music, kids' activities, and farm produce. It attracts 500 to 1,000 shoppers weekly, and for the holiday season is loaded with gift treats like truffles, biscotti, teas, and cakes.

But Frank Baldassarre, who runs the exchange, said the key was not only the infrastructure, but also an ingredient that comes directly from members.

"The most important piece of this is collaboration," he said. "It's like-minded entrepreneurs interested in building something that supports one another."

This is a business solution born out of a different business problem: In the depths of the recession, Baldassarre's family's business, Golden Valley Farms coffee roasters, was struggling. The organic, fair-trade roaster had scaled back production and streamlined its business model - but that left its 27,000-square-foot manufacturing facility mostly empty. No buyer or tenant for the excess space could be found.

Baldassarre, who left a career in finance to help get the family business on track, had an idea: Carve the facility into small work spaces, 120 square feet and up, and rent them for around $300 per month including utilities. Soon, the previously unmarketable real estate was in high demand.

Now, 30 companies are headquartered in four large rooms, each equipped with the triple commercial sinks and other equipment required for food manufacturing, saving each business about $35,000, Baldassarre said - the cost of installing it separately.

Entrepreneurs bring in their own ovens, mixers, refrigeration units, and specialized equipment - whatever they need to churn out offerings ranging from vegan raw fudge to homemade pasta, Greek yogurt, meatless scrapple, and toffee popcorn.

Families who have always talked about going into business with heirloom recipes are finally giving it a shot: Deborah Streeter-Davitt, co-owner of MacDougall's Irish Victory Cakes, said she was replicating "great-granddad's techniques" for her colorful bundt cakes; she shares an oven with Lavinia's Cookies, which are based on a biscotti recipe prized by baker Vince Lattuca's great-grandmother.

Scott Garber, a retired doctor, just rented a space in preparation for launching Altitude Foods, which will make a line of vegan, gluten-free brownies.

"I could not do this otherwise," he said. The start-up cost at the exchange is "thousands of dollars, not hundreds of thousands of dollars."

He said he was encouraged by those already at work in the space. "Most of the artisans are meeting their expenses soon after they get going. How many businesses do that? Not very many."

A month ago, the Artisan Exchange launched its own distribution network. For a commission, it represents the artisans, targeting regional restaurants, specialty stores, and others.

"The biggest barrier I see for these companies isn't production. Everybody is passionate about what they make," Baldassarre said. "The big barrier is sales and distribution. . . . So we now have enough scale, with 30 companies on site and another 20 related, that we can run our own distribution network."

They hired a salesperson to market the portfolio, and use Golden Valley's trucks for deliveries.

Economies of scale also help with purchasing. Producers team up to meet required order minimums or negotiate prices. Baldassarre said vendors who ship with dry ice teamed up to bring down the cost from 95 cents per pound to 25 cents.

Though Baldassarre admitted 30 entrepreneurs can mean "30 type-A personalities," the supportive atmosphere appears to be a recipe for success. Many tenants have already doubled or tripled their spaces, and the Artisan Exchange is nearing capacity.

Baldassarre would like to expand, but he doesn't expect tenants to stay in the exchange forever. Two, Vera Pasta and Pure Blend Tea, have outgrown the space and moved out. Vera has moved to its own manufacturing facility in West Chester, with retail space.

To Baldassarre, their departure is a sign of the exchange's success. "We kind of call it, they graduated."