Milwaukee-based Outpost Co-op has begun construction on a new commercial kitchen at its corporate office, 3200 S. 3rd St., a project aimed at meeting growing customer demand and expanding its food production capacity.

The nearly 9,000-square-foot kitchen will replace Outpost’s current central kitchen operations, which have been based since 2005 at the co-op’s Bay View store, about a mile and a half away at 2826 S. Kinnickinnic Ave. The existing facility produces a range of fresh foods, including wraps, soups, salads, entrées and baked goods, for Outpost grocery stores as well as wholesale customers such as hospitals and retail outlets.

“With a new commercial kitchen, we’ll be able to increase community access to healthy, locally produced foods made with all-natural and organic ingredients,” Outpost CEO Ray Simpkins said in a Tuesday press release. He added that the expanded space will allow the co-op to introduce more products and grow its wholesale business.

The $3.5 million project will convert existing warehouse space at the corporate office into a food-service-only facility. Bakery operations will remain at the current 3,100-square-foot space on Kinnickinnic.

Outpost said the new kitchen will include several environmentally focused upgrades, such as Energy Star-certified appliances and water heaters, LED lighting, electronically controlled exhaust hoods and a refrigeration system that uses a low global warming potential refrigerant.

The kitchen is expected to open in 2026 and initially employ 27 current Outpost workers. Additional hiring is planned beginning in 2027 as the co-op expands operations to multiple shifts.

MSI General is serving as the project’s general contractor, with Coolsys Inc. handling refrigeration installation and WaterStone Bank providing partial financing.