Hyunjoo Albrecht runs a kimchi and hot sauce manufacturing company called Sinto Gourmet. Over the last decade, she has had an unusually intimate vantage on “food tech” companies. That’s because she has been a landlord to many of the Silicon Valley delivery apps and other venture-backed businesses who were trying to “disrupt the food space.”

This is the story of how Albrecht had to partner with these companies to build her own food business in the Bay Area, why she vowed to stop working with them and how in the pandemic she ended up partnering with a company that had burned her in the past.

The Road to a Sustainable Business

Unlike food tech companies that spring to life with venture capital, it took Albrecht years to build her business. She immigrated from South Korea in 2003 and started Sinto Gourmet with some recipes from her North Korean grandmother. Then she started slowly expanding her fermented offerings.

She sells tubs of spicy napa cabbage kimchi. There is a mild version and a crunchy option. In 2014, she started selling a mixture of fermented California root vegetables: red beets, daikon, turnips, rutabaga and carrots. Alongside the kimchi, Albrecht has developed two hot sauces: tangy apple and sesame garlic.

Albrecht began selling the products in grocery stores and then directly to individuals. Eventually, the business grew enough that she needed a commercial kitchen, which is hard to find in San Francisco. So she decided to take her life savings and build a large kitchen.

Her kitchen is one of the larger commercial cooking facilities in the city. It's in a roughly 5,000-square-foot warehouse in the Bayview neighborhood. The walk-in freezer alone is 500 square feet. She jokes that it's bigger than most one-bedroom apartments in San Francisco.

Albrecht's plan was to make her kimchi there and rent out the extra space to other local cooks. But the tenants that flocked to her space were not small independent chefs, but instead venture capital-backed food companies.

Albercht began leasing them unused space in her kitchen. Many of the companies she leased space to came with big plans and then disappeared when they ran out of venture capital. Her tenants included companies like the pizza-delivery app called Easy as Pi, a meal delivery service called Din and a ready-made meal kit company called Sprig.

A Different Business Philosophy

Over the last five years in the U.S., there have been over 2,000 venture capital investments made into what folks call "food tech companies,” which includes everything from delivery to bioengineered meat. According to a report from a venture capital fund called AgFunder, there was almost $20 billion invested in 2019 alone.

Many of the companies that have sprung up over the years, like Sprig and Munchery, have gone bust. At KQED, we covered how the local chefs Munchery was working with had to fight for over a year to get paid the debts they were owed when the business closed.

As Albrecht watched these kinds of food tech companies come and go in her kitchen, she’s sometimes tried to give the young executives tips. “They just don’t listen,” Albrecht says. “The only things they care about are their goals, their investors and their ‘scalability.’ ”

Albrecht says most of the people she has met at these companies are very different from her and owners of other local food businesses. She struggled to characterize the difference, but it was more than just their corporate philosophy.

Many of the people she knows trying to make a living selling food are immigrants, women and people of color — far different than the food tech would-be entrepreneurs. “They are young, white,” she says, “the kind of people you see in a J. Crew catalog.”

There is also a big difference in who they bring in to work at their companies. Albrecht hires local workers to make her kimchi, many of whom have worked preparing and handling food for years. They look very different from the workers at the food tech companies.

“All these people they hire are also from Silicon Valley companies who have no experience in a food manufacturing company,” Albrecht says. “Often these positions are for logistics, operations, marketing, all those people. Those are the people they hire.” 

One anecdote about a former tenant of hers really hits home regarding how different her business is from their business.

A tenant with a meal kit company wanted to automate filling a container with a few ounces of sauce, so Albrecht says they bought a giant machine to squeeze sauce into cups. It came in on a big pallet, and it was a huge operation to assemble. Albrecht says they were really excited about this machine.

But when they finally got it hooked up, it didn’t work as expected. She can’t help laughing while she tells the story. “When the sauce comes out of this machine and lands into the little saucer cup it doesn’t land 'pretty' enough. So they just stopped using it. They just left it there.” The giant machine sat hulking on a pallet, unused, for months.

Albrecht says she she quickly realized her tenants weren’t trying to build a sustainable business like her. They were swinging for the moon.

“I try to grow little by little,” Albrecht says, “and luckily I have never lost money. My business is profitable. I can pay myself. I can pay my employees. I can pay all the bills to my suppliers on time.”

An Uneasy Partnership

At the start of this year, Albrecht and her workers were turning 5,000 to 6,000 pounds of piles of napa cabbage into kimchi every day. She had finally grown the business to the point where she didn’t need to rent space or sell her product to a food tech company. Albrecht she was happy to be done with them. But then the pandemic hit.

While Albrecht’s sales have declined, delivery apps are flush with business. She has found herself working again with a company called Local Crate. Before the pandemic, she says the company was super late paying her for the products she sold them.

“It was not a lot of money, but it made me really upset,” Albrecht says. “I don’t know why they run the business like this.”

Albrecht didn’t want to work with them anymore. But now with the pandemic, she welcomes any business she can get. She also convinced the company to pay her up front. She’s happy for any sales right now. Although, she looks forward to the day she can get back to selling her kimchi directly to grocery stores and customers.