Overcoming barriers to entry: Microgrants help Somali Sambusa maker, other food startups scale up
The Market Entry Fund helps entrepreneurs get a leg up in the packaged food industry. This year’s grant recipients included a Taiwanese sausage maker and a cookie maker.
“Hoyo” is the Somali word for mother.
When sisters Mariam, Halima and Asha Mohamed launched Hoyo in 2015, their goal was to employ Somali women making a much-loved Somali snack: the deep-fried, beef-filled pastries known as sambusas.
Since that time, Hoyo has grown into a local food success story, serving 200,000 sambusas a year at schools across Minnesota. Hoyo sambusas are also sold in co-ops and supermarkets.
The business is one of 12 local food producers that recently received microgrants from The Market Entry Fund (TMEF), a St. Paul nonprofit that works with food and beverage producers from underrepresented communities.
TMEF’s Micro-Grants Program provides $5,000 to $20,000 grants to food startups. The goal is to help small businesses overcome barriers in the packaged food industry.
This year’s recipients included a range of food producers, including Taiwanese sausage maker Linko Food and Junita’s Jar, which sells cookies at Target.
“The only reason that we are still here and survived is really the support of these people who are still with us, helping us as we speak,” said Hoyo co-founder Mariam Mohamed. “Any ethnic group or any person who’s starting a food [business] you have to have support, people who know the food, who are in the food industry, people who can guide you.”
Kayla Yang-Best, TMEF president, said the grant program started in 2019 and was born out of necessity.
In 2017 she was running a “social purpose” grocery store allowing entrepreneurs to shelf their products in her store and keep 100% of the proceeds. It was there she learned of the many obstacles some of the business owners were facing.
“We were getting so many makers coming in on the retail side, asking for help, and we were not equipped as a retail store to do that,” Yang-Best said. “They were asking questions about business support, licensing support, packaging support, really all of that wrap-around business needs.”
Yang-Best said the grants are funded through private, corporate and community foundations. In 2019 they gave about $35,000 and are now up to $100,000 in their most recent round of grants.
Yang-Best said the businesses the nonprofit works with share many of the same struggles.
“It ranges from not understanding how the inspection process [works] or [what] the requirements are, to some of it may be even language challenges,” Yang-Best said. “Some of it may be the process that they use, may not be something that is acceptable in the way Western culture processes things.”
One challenge startups face is finding kitchen facilities that meet the standards of inspectors. Hiring help is another.
It’s that hiring process that businesses like Hoyo have been focusing on lately.
On a recent weekday, Mariam and Halima Mohamed oversaw the production of 3,000 sambusas by workers at a gleaming production kitchen in Bloomington.
The triangle-shaped pastries sizzled in a deep fryer as the smell of garlic, onion and beef filled the room.
Part of Hoyo’s business model includes giving work opportunities to immigrants as they transition into a new life in America, Mariam said.
“Now it’s $15 [per hour] everywhere, but we started with $15 [per hour], we provided transportation. We allowed people to, if they have issues any day, call in at the last minute. We didn’t fire them,” Mariam said.
Joani Essenburg, who works in sales and distribution for Hoyo, said the company realized that Somali women were having a difficult time finding jobs partly due to language barriers, work skills and the hijabs they wear.
But before being able to hire anybody, Hoyo had to learn the process of freezing their products.
The Mohamed sisters worked with co-founder Matt Glover and General Mills to master a frozen version and develop packaging for their products.
Hoyo first broke into the scene via farmers markets. Success there led to distribution at food co-ops across the state before they began contracting with school districts to supply sambusas for lunch.
Hoyo now supplies 24 Minnesota school districts with sambusas and its products are sold in 60 stores.
“Schools don’t see it only as a food. They see it as an item that brings people together and talks about different cultures,” Mariam said. “So we want to go national, go to other school districts.”
But amid its growth, Hoyo has faced some setbacks.
In March 2023, the company had to recall more than 1,000 pounds of product due to “possible contamination” caused by steel scrubbers.
The incident was reported by a school, and Hoyo notified the USDA.
“Hoyo was using steel scrubbers to clean the large sheets we use to receive the sambusa after we cook. One tiny steel scrubber got attached to the outside of one sambusa,” Essenburg said.
Since that incident, Hoyo has transitioned to using sponges in the cleaning process, Essenburg said.
She said although Hoyo has had a strong business growth over the years, the goal for now is strengthening operations and securing funding or investments needed to build capacity for growth.
Meanwhile for Mariam, it’s about giving the sambusa as wide a platform as possible, all while maintaining a strong base with her workers.
Yang-Best said grant recipients have seen a variety of success in business. Some like Hoyo have established contracts with school districts while others like Junita’s Jar have recently made it onto shelves of big chain stores like Target.
“There is a big local food movement here in Minnesota, but the newer immigrants in the packaged food space, typically have a harder time getting into the market with their products,” Yang-Best said.
Also among this year’s grant recipients was Linko Food, owned by Sasha Szutu and her husband Eddie Shih, which specializes in Taiwanese sausages.
Shih said the sausages are made of pork, spices and vodka. The meat inside the sausage isn’t as finely ground as other sausages and the drying process is shorter.
But unlike Hoyo, which has been able to hire more than 20 employees to help production, Linko Food is a two-person business.
Shih said grants like the one from TMEF could help expand the business.
“We do not hire many laborers, we’re still trying to expand,” Shih said. “This is the goal for every business owner. We want to get grants to improve ourselves and our process.”
Currently Linko Food sells its Taiwanese sausages at two Minnesota locations: United Noodles Asian market in Minneapolis and the Asian Food Store in Rochester.
Shih also said that due to a large Taiwanese population in California and the Chicago area they’ve been able to make connections with local markets there to sell their sausages.
According to Yang-Best, TMEF is focusing on helping companies with foods that could be consumed as a meal rather than just snacks.
Another goal for the nonprofit is to elevate businesses like Linko Food into a position where they’re more commercially sustainable.
“I’m imagining that they’re still in the cultural markets which doesn’t really bring them that level of sustainability that we want to see,” Yang-Best said.
Shih and Szutu spent the summer at different festivals and events. There they grilled sausages and tried to spread the word of their business outside of their normal clientele.
Shih said the goal is to be the best provider of Taiwanese sausages in the country.
“Hopefully people will start to recognize and appreciate our product so we could sell more,” he said. “We could get more distributors. When you make more sales and more money you’re able to expand, maybe make different products.”