Osso Good relocated its production facility to Fresno in 2017.
Written by Edward Smith
When Osso Good came to Fresno in late 2017, they had already been in business for five years. The makers of organic bone broth and soups were limited by the shared cooking space they were working out of in Marin County.
“We were selling out every week, working out of our little kitchen,” said Meredith Cochran, co-founder and CEO of Osso Good. “Selling out every week is a good problem to have, but it’s a huge problem.”
Now, they are finding that the 15,000 square foot production facility in Southeast Fresno has already “gone quick.”
Because of their ability to find easily adaptable space for food production and readily available labor – relative to other parts of California–production of their all-natural broths and soups is able to meet the increasing demand.
Now, Osso Good has a retail facility in Los Angeles and is shipping across the country wholesale, via their website and on Amazon, supporting 50 employees from when they started as a husband-and-wife team five years ago.
While she worked at a hospital, Cochran became interested in using nutrition as a “form of healing.” Her schooling with traditional Chinese medicine taught her how to use food as preventative medicine.
The lack of market for bone broth, which some tout for its anti-inflammatory and joint health benefits, interested Cochran.
Making organic bone broth requires sourcing responsibly raised ingredients. Vegetables have to chopped and roasted, and it all has to simmer for at least 24 hours. The process can be strenuous.
Cochran’s first trial making bone broth was “terrible,” she said. But the quality soon grew, and their growth evidenced their success.
They funded the business with the money Cochran and her husband were given by their parents for their wedding. They were doing everything themselves, from labeling pouches to packaging and shipping. They did everything together in their spare time while she was going to school and working part-time, and her husband, Jazz Hilmer, who is now CTO, maintained a full-time job.
Cochran said she and her husband knew they needed help. Her brother-in-law came in and put his financial background to use.
Their search began close to home in Marin County. But lagging inventory in industrial space made available areas highly competitive.
A March 2018 op-ed in the North Bay Business Journal authored by Al Coppin of Keegan & Coppin Inc., a commercial real estate broker, says construction has not kept up with demand.
“The market can absorb 1 million square feet a year of flex and industrial space in Sonoma County, and less than one-quarter of that is being built,” Coppin wrote in the article.
What’s more is that demand is increasing rental rates, and in the Bay Area, food processors like Osso Good have to compete for space with capital-intensive businesses in the technology, bio-technology and emerging cannabis markets, said Ethan Smith, SIOR, CCIM. Because of this, industrial real estate can run 4 or 5 times what it would in the Fresno area.
Smith, senior vice president with Pearson Realty in Fresno, brokered the deal. He said finding a space often means bidding against tenants who can pay cash on the spot.
A broker in the area suggested the Fresno market to the team at Osso Good.
The broker contacted Smith, who began scouring the Valley for potential spaces.
Of the roughly 67 million square feet available, Fresno has a vacancy rate of 1.67 percent, Smith said. The company’s rapid growth demanded a space that could be easily adapted to their needs. The scope of production can often demand specialty needs like enlarged natural gas lines to fuel cooktops.
“Even for people willing to spare no expense, it can take 4-6 months to convert a non-food processing building, to up to more than a year” said Smith. “If you’re a high-growth company, they really would struggle to plan a year from now.”
They were able to find an off-market space on Shields Avenue between Clovis and Fowler avenues that used to house a chocolate factory. This made retrofitting the space relatively easy.
While Smith wouldn’t call the find lucky, he did describe it as “fortuitous” and “atypical.” It took knowing the landlord, who had decided to let Osso move in immediately rather than put it on the open market.
“We were amazed we could find a warehouse space that was a food facility already,” said Cochran. “With minimal construction, we were able to get started.”
The first emails for the building purchase were being sent in July 2017, according to Larry Westerlund, Fresno’s director of economic development.
By winter of that year, they were in limited production, and by July 2018, following their final permits from the U.S. Department of Agriculture, they were in full production, according to Cochran.
Moving to Fresno also meant access to a larger labor pool. Most recent available statistics in December 2018 had Fresno County with 7.5 percent of its 455,300 eligible workers unemployed, according to the Employment Development Department. In Marin County, that ratio was a steady 2.2 percent of 146,100 workers.
Additionally, employers need a workforce trained and eligible to do the job. Finding between 2 and 4 percent of the population working in a business’ specific field is ideal, said Westerlund. For Fresno County in December 2018, 2.76 percent of workers were in food manufacturing, with 5.68 percent in manufacturing as a whole.
This allowed Osso Good to expand from seven people when they were in Santa Rosa to 50, where they are now. And staffing agencies provide the company with enough labor where they can choose motivated workers, said Cochran.
Now, Osso Good is selling their soups out of their location in Los Angeles. They can ship their product in two days, according to Cochran, compared to what would be three days in Marin County. They can sell via Amazon as well as their website.
They’ve begun wholesale contracts and Cochran says getting on grocery store shelves is their next step. They aren’t in any Fresno grocery stores yet, but as Cochran says, “they’d love to be.”
They are riding what Cochran calls a renaissance in the food world for traditional, healthful food. “It didn’t start with bone broth and it won’t end with bone broth,” she said.