I can’t tell you how many articles I’ve read focused on the latest and greatest trends in the food industry. There are more articles on food trends than food trends. When we were asked to add to that list, the desire to rush forward with our prognostications was - um, overwhelming? There seemed little point in rehashing the insights from other folks. What could Food-X possibly add to this already overdone subject?
But perhaps I was looking at it all wrong?
The reality is Food-X is not a retailer, we’re not a big food company - in fact, Food-X is not seller of anything food. What Food-X does is find food founders who are wanting to create amazing food companies and we back them with cash, expertise and access to our ecosystem - 110 percent!
Food-X has been called the #1 global food accelerator, and that is exactly what we are. That may (?) make our perspective unique.
We receive hundreds of applications from food entrepreneurs from around the world. They apply to join Food-X and in so doing, they answer a range of questions on their business. They tell us what amazing products or services they want to deliver to which markets and which consumers. They tell us what problems they will address, how big their addressable market is and how they are going to change the world.
We then sift through these applications, consider the markets, the team, the solution, and a whole range of other factors and then, as a team, we talk to perhaps a hundred of them. After that, we come together as a team, we challenge and argue with each other until we’ve arrived at a shortlist.
We see companies which are tackling the same problems but in totally unique ways. We see many companies which are quite similar. We see patterns and trends, across the approximately 1000 companies who apply annually to Food-X. Lets face it, there are not 1000 different business models and because Food-X is one of the more well known ‘brands’ in the food accelerator and investment space, we see many companies, most do not.
its just possible that we have a unique perspective.
Towards the end of 2016 the Food-X team had the distinct pleasure of reading through more applications from prospective Food-X cohort companies. For three months or so, we had been receiving a steady flow of applications from some of the most imaginative, persistent, dogged and insightful food entrepreneurs from around the world.
Over the last few years there have certainly been trends.
Apps, meal kits, crickets flour, cricket cookies, cricket back scratchers and many other ways to deliver cricket protein to the masses. Companies trying to take very well known models (AirBnb, Uber, Blue Apron) and add their own spin - the list goes on.
There are certainly trends in food entrepreneurship. The tough thing isn’t seeing the trends, I’d argue the difficulty comes from knowing the difference between a trend and a fad.
Without getting into nuance - lets agree that a fad is something which is popular now but will not necessarily stay the test of time. A trend in comparison is an evolution, a change, a movement forward. I would argue that meal kits are a fad however the desire for healthier quality food, sourced from local farmers, with simpler and cleaner nutritional panels is not a fad but a trend.
Food Transparency & Simplicity:
We are seeing young companies coming through our application process who are strongly focused on simplicity and transparency. In some cases, they are opting for a vegan or gluten free ingredients panels as a way of delivering what they perceive as healthier and more desirable food products. Taking a step back, the consumers desire for simplicity is also seen in the products which they purchase. We recently met the founder of Back to the Roots, an innovative food company which has just become the preferred cereal in the New York State school system, ousting Kellogg’s from that top position. I’m sure there are various reasons why that decision was made, but Back to the Roots cereal has far fewer ingredients with nothing in the product which shouldn’t be - literally three ingredients. That simplicity means they are now the chosen cereal for 1.1 million eligible New York students. (New York Times Article: https://www.nytimes.com/2017/03/01/dining/cereal-health-new-york-city-public-schools.html)
Healthier Food Doesn’t Need to Taste Like Cardboard Anymore (Who Knew….?):
Five years ago, three years ago, maybe even less - a line could have been drawn around the ‘healthy’ aisle in a typical grocery store and very few customers crossed that line.
That aisle, in many of these stores, was somewhat dusty, and in the least traveled parts of the store. This healthy aisle was the modern day loss leader, a begrudging necessity to keep the nutritional crackpots happy. Those days are gone!
Now the grocery powerhouses are challenging each other to select the most innovative healthy perhaps locally sourced foods - they are prepared to experiment and bring in unheard of products and brands that increasingly meet healthier standards. In response these healthier brands are getting creative.
As part of the food-X application process, we are seeing healthier products being developed which are not only healthier than their counterparts but also are prioritizing mouth feel and taste. For example - Dollop Gourmet, is a frosting and snack food company. There are so many ways to do frosting the wrong way. Dollop doesn’t. It has half the sugar of regular frosting, it has sustainably sourced ingredients, its vegan, non-GMO and is rainforest certified. But here’s the really surprising thing - it tastes REALLY GOOD! Who knew that vegan products could actually be really tasty (tongue firmly in my cheek). (http://www.DollopGourmet.com)
Food Waste is Sexy (Just as long as you don’t call it ‘Waste’):
We purposefully chose a few really exciting companies who are tackling food waste to join the most recent cohort of Food-X. Every application cycle we go through there are a decent number of entrepreneurs wanting to tackle one or another of the food waste problem. We rarely invest in these companies. Not because we have anything against tackling food waste but rather because many of the applications are ‘academic’ and the founding teams haven’t come down out of the clouds and translated their ideas into real, actionable business models and plans which would work in the real world. Perhaps they’ll win awards from one well meaning not for profit organization or foundation and we’ll applaud their idea. Unfortunately there are no shortage of ideas - there are though a shortage of teams who can translate those ideas into practical, real world solutions which will have a significant impact. Food-X invests in the later.
One trend we’re seeing is food waste companies coming through who actually have a real shot at shaking up the food waste problem and in the process creating businesses which generate real economic value. Yes, its possible to do good and create value for your shareholders - its a brave new world! Want another example or two?
In our latest cohort we invested in Rise. Rise developed a technology to convert spent grain, a waste byproduct generated by the beer brewing industry, into nutritious and delicious flour. That waste byproduct used to end up in landfills or pig feed. Now it can be used for yummy pancakes, brownies or even donated. Instead of a byproduct that brewers would pay for disposal, our cohort company’s technology can convert it into a food stuff which is nutritious. (http://www.riseproducts.co/).
Wasteless, a company also from the current cohort, is focused on addressing the food waste problem within the grocery channel. Its a solution that provides instore pricing based on a products expiration date. As products get closer to their expiration date, the system changes product pricing to ensure products are sold before expiration. (http://www.wasteless.co/)
FruitCubed, is a young company taking fruit and vegetables with short lifespans and through FruitCubed proprietary technology, extending the chilled shelf life of these fruits and vegetables, by up to 60 days. I wish I could give more information about FruitCubed and how they are having a significant impact on food service in hospitals and other places, but unfortunately they have slapped me with a gag order. We’ll tell you more as soon as they let us. (http://www.fruitcubed.com/)
So one food trend is not only companies addressing food waste but companies doing it in a practical way that may actually deliver on the promise. And Food-X will be there, front and center, to support them to achieve their vision. Just like we do with all of our cohort companies.
Obviously there are other food trends not covered in this article, we were told to give you three - if this article doesn’t sink like a stone then maybe they’ll be a follow up. Its up to you. Want more? If this article gets one billion likes, we’ll write a part dos. Until then, be part of the solution :)
Originally published on SOSV.com - Author: Andrew D. Ive