PONDERAY — Buried in the back of the Bonner Mall, it’s not uncommon to find Derek Blumenschein and his employees making and canning his signature pepper jelly.

Blumenschein’s business, Sweet Heat, is based out of Bonners Ferry, but at least once a month he makes the trip down to Ponderay to utilize the Pend Oreille Special Foods Incubator. POSFI is a professional, licensed kitchen that allowed him to grow his operation from 60 jars of jelly a day to as much as 1,500, making his business viable. 

"It’s the only way I can keep going,” Blumenschein said. “In a normal day, I’ll do like 1,200 to 1,500 jars, you can’t do that cooking on a stovetop with a couple of pots. It’s made it where I can produce more... without it, I would be looking for a job.” 

Businesses like Blumenschein’s are the driving force behind POSFI, which enables small businesses to expand their operations at a relatively low-cost. Blumenschein said if he attempted to create the kitchen and space in Bonners Ferry, it would cost him upward of $750,000. 

"One kettle, new is like $50,000 to $60,000. Those food processors I’m using there are $6,000. There’s $200,000 to $300,000 worth of equipment here,” Blumenschein said. “Somebody starting, they can’t afford to go out and build something to bring that equipment in, unless they have money.” 

Originally constructed in the 1990s at the Bonner Business Center, the kitchen incubator has gone through several versions on its way to becoming POSFI. After the city of Sandpoint sold the Bonner Business Center in 2014 to make more room for medical device manufacturer Lead-Lok, much of the kitchen went into storage.  

For four years the region went without a kitchen incubator, until Kitchen Spokane revived the concept at its current location in Ponderay in 2018. The journey of Kitchen Ponderay abruptly ended after the owner, Jayme Cozzetto, unexpectedly passed away in 2023. 

That’s when Pend Oreille Economic Partnership’s Executive Director Brent Baker said business owners using the space reached out to him for help. With Baker’s help, business owners including Blumenschein created a board to form POSFI as a 501(c)(6), non-profit organization. 

"For the first time ever, the economic development community and the users of the kitchen had control,” Baker said. “As a nonprofit, [we] now had out destiny in in our own hands, and we could take control and run the thing going forward.” 

Much of the kitchen equipment are remnants from the 1990s original kitchen, but Baker and the POSFI board have been hard at work to improve the kitchen. That work began with a $30,000 grant from the U.S. Department of Agriculture and $9,000 from the Bonner County Water and Soil District to modernize the facility.   

Now bustling with six or seven businesses using the space monthly, POSFI is reaching a point of full utilization and reaching a stable point financially, Baker said. 

In August, the Bonner Mall was sold to a group of investors based in Spokane, who Baker said was very supportive of their use of the mall space. He said there haven’t been long-term conversations to keep POSFI in that location, but that he’s hoping to continue growing the incubator there. 

Baker said POSFI is so much more than a kitchen and that with support from Litehouse Foods, business owners also benefit from its connections and advice. Baker said the owner of Honey Stinger, an energy bar brand, J.D. Robinson volunteered his time to help those in the incubator learn to scale their business. 

"Our interest wasn’t so much just to have a shared commercial kitchen for small businesses. It’s to help them grow,” Baker said. “We’re trying to make it more than just a shared space, but a place where you can really grow your business and scale up over time.” 

That stable support has meant everything for Sweet Heat, which has struggled to find a consistent home to make Blumenschein’s jelly since it opened in 2010. Now, 15 years after Blumenschein made his first batch of jelly from leftover jalapeños in his garden, he said he’s hoping to take the next step to his own facility. 

“Ideally, that’s what it’s supposed to do, someone starting something and wants to grow and then they hopefully get to a point where I am to take the next step in a couple of years,” Blumenschein said.  

    Owner of Sweet Heat Derek Blumenschein pours a fresh batch of his pepper jelly into an automatic dispenser at the Pend Oreille Specialty Food Incubator's commercial kitchen.