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Catering to a Detroit Community
After three years of managing the Inner City 100 program, I’m often asked what types of successful firms are located in the inner city. Truth is, there’s really no prototypical inner city business: Inner City 100 firms are typically very diverse—from their size, to management structure, to their industries.
But there is an undeniable trend. Over the past few years, ICIC has watched incredible growth in the inner city food cluster. We all love great food, sure. Yet these companies are more than the food they produce or distribute. These businesses are channels for local jobs that are accessible to low-income residents and, often, serve local markets that were once ignored.
Edibles Rex is one of these food-related Inner City 100 companies.
The woman- and minority-owned catering company is based in Detroit and primarily serves corporations, charter schools, and local events. Edibles Rex specialized in healthy food for children, such as delectable black bean brownies—an ICIC staff favorite. Among the firms largest clients are the local schools. Because local schools are only allotted $2 per each meal, Edibles Rex had to find a cost-effective way to provide these healthy options while remaining competitive in a fierce food market.
Through smart supply chain management, and reduction in overhead costs, the company continues to thrive. Edibles Rex finished #92 on the 2012 Inner City 100 list with an average year-over-year growth rate of 12% and 2012 revenues of $2.4 million.
CEO Tammy Tedesco started the company as a yogurt shop and deli where she received requests for catering services. Once she transitioned the firm into catering, Tedesco was able to build a network of customers largely through word-of-mouth referrals. The company’s growing reputation in Detroit began to trigger substantial growth, and Edibles Rex moved into a 2,000 square foot commercial kitchen space in order to satiate demand.
Today, Tedesco and her team have quadrupled their kitchen space. According to Tedesco, the company is again outgrowing its space as it continues to add new charter schools to its customer base.
In addition to improving children’s health, Edibles Rex is having an impact on the rest of its community. Located in an EmpowermentZone (EZ), a designation provided by the federal government for highly distressed communities, Edibles Rex is eligible for a combination of grants, tax credits and alternative financing to help the business grow. For instance, some EZ businesses are eligible for employment credits of up to $3,000 yearly per EZ resident employed.
The EZ designation is paying off—quite literally—for both Edibles Rex and surrounding neighbors. Eighty-five percent of Edible Rex employees live in the inner city and eighty percent live within just a few miles of the Edibles Rex facility. The company has also been a local driver in minority employment as roughly two-thirds of the Edibles Rex team is of minority status.
For a city that has been challenged with systemic unemployment, creating jobs for local residents is essential to addressing its poverty. By its mere definition, an inner city neighborhood is either plagued by high unemployment and/or high percentages of residents living in poverty. Yet, due to Edibles Rex high growth, the business has been able to more than double its workforce over the past five years—a feat all the more impressive given the uncertain economy these past few years. The firm utilizes its community colleges and local programs such as Michigan Works! to find capable and competent staff.
The company provides more than just a job, however: Tedesco offers her employees great benefits too. Edibles Rex employees have access to on-site business skills training as well as off-site professional development opportunities. Employer-sponsored workforce development benefits provide career ladders for workers who are then better able to provide for themselves and their families.
Tedesco believes that such investment in her team has led to practically zero turnover at Edibles Rex. She also cited that her team (given that so many are inner city residents) understands and appreciates the importance of the company’s mission in providing children of low-income families with healthy meals so that they can continue to succeed at school and in life.
Do you know of any companies in your inner city that are making a local impact like Edibles Rex? Nominate them now for a chance to land on the 2013 Inner City 100 list. Winners receive national recognition in Fortune and local publicity for their success, plus year-round management education from professors at Harvard Business School?
You can also nominate successful inner city firms in need of outside debt or equity investment for our Inner City Capital Connections program.
We look forward to working with firms from your network and community so that they can continue to create jobs and value in their inner city neighborhoods.
BY Alex Rodriguez on August 6th, 2012
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