IFTNEXT’s NOLA Startup Night on June 3 provided a forum for the local and global startup community to get to know each other and to learn from leading industry experts during a panel entitled “Realistic Scaling in a Unicorn Culture.” Several New Orleans-based food startup companies showcased their innovative wares—everything from cotton candy and five-seed nut butters to a prebiotic dietary supplement and antioxidant bar.
The event provided an opportunity for participating IFT19 Startup Alley exhibitors, finalists in the IFT19 Food Disruption Challenge, and local startups to network and discuss the challenges they face with industry experts including venture capitalists, innovation officers, product developers, and buyers.
Competitive environment: The goal of the 45-minute session was to provide advice on how to build and maintain a successful startup in the food and beverage space. “It [the marketplace] is getting more complex,” explained panelist Sanjeev Krishnan, chief investment officer and managing director of S2G Ventures. “There’s a lot more competition and less barriers to entry.”
While the environment enables fledgling startups to enter the market more easily, it also means an often overcrowded space in which to compete. That’s why, according to Jim Murphy, vice president of Global Venturing and Emerging Growth Platforms at Coca-Cola, it is vital to maintain competitive advantage. “If someone can copy it [the idea] the next day, you’re not going to be around for long,” said Murphy.
“Take time to build the community within the organization,” advised Chef Jessica Foust, RDN and vice president of Culinary Innovation & Nutrition for The Food Group. Formerly culinary director of Chicago-based startup Farmer’s Fridge, Foust has first-hand experience being a part of a startup that has seen stable growth since it launched in 2013. A key to Farmer’s Fridge’s success, claimed Foust, is that the entire organization is aligned around realistic goals. This sometimes means controlling creative ideas in order to remain focused on the target customer.
Keys to success: One advantage of today’s lower barriers to entry, said Krishnan, is that the internet enables a startup to conduct trials and get feedback before it attempts to enter the retail market. As he explained, some startups scale quickly and are not ready from an organizational or pricing standpoint for that challenge. “Not going into a certain channel is almost as important as what you do go into,” said Krishnan.
In addition to distribution, manufacturing partners are vital to the success of a startup. Foust recommended verbalizing and then writing down the standard for the product. Sometimes, this process is difficult, but the more thought out it is, the easier it will be to make sure you are selecting the right manufacturing partners to meet that standard, said Foust. “It’s not just a one-and-done,” explained Foust. “Manufacturing changes every day and you have to be on top of it and fight for that standard every single day.”
Managing capital: When it comes to capital investment, “every dollar counts,” according to Krishnan. “You have to prove enough to get more traction,” thereby, hopefully, securing more investment. He cautioned again financing inventory with capital investment and reminded the audience that there are “implications with whatever capital you take.”
What stake a startup founder should give up in order to get capital is “all about fit,” said Murphy. He advised making sure investors have similar values as the startup company. With corporate capital, Krishnan explained that there are a lot of benefits, such as increased distribution, but to “make sure it doesn’t harm your ability to maneuver.” In addition, taking outside investments usually puts the startup on a “time path,” said Krishnan. Investors want to know when they are going to see a return, which can put pressure on the startup to make hasty decisions that might weaken the brand. “Your only objective shouldn’t be wild revenue growth,” advised Krishnan. “Be authentic to what [the company] is and what your brand is.”
The New Orleans-based startups that participated in the event were as follows:
Beyond the Equator: Beyond the Equator’s 5 Seed Butter has 8 grams of protein and only 5 carbs. Manufactured in a facility free from the top eight allergens and contains absolutely no peanuts, tree nuts, or soy. 2018 Sofi Award for Best New Product in the nut butter and seed butter category.
BiomeBliss: A prebiotic blend that promotes metabolic and digestive health by nourishing your existing gut bacteria. Ingredients include inulin from agave, beta-glucan from oats, and polyphenol antioxidants from berries.
Brass Roots (co-host of the event): Creates nutritional snacks made from honest, plant-based ingredients with a delicious taste that lives up to the standards set by New Orleans’ rich food culture. The company is focused on giving back to the local community through working with organizations that help empower youth.
Jambalaya Girl: A women-owned business that brings an authentic taste of New Orleans to the world with easy-to-prepare food products, inspired by Jambalaya Girl’s family recipes. Proudly made in New Orleans and blended by Chef Paul Prudhomme’s Magic Seasoning Blends.
Poof Cotton Candy: Offers hand-crafted, gourmet treats with novel flavors, including twists on classic New Orleans flavors. The offerings—which include King Cake, Cookies & Cream, and Toasted Coconut—are dressed with sprinkles, edible glitters, and other delicious morsels like crumbled cookies. Winners of the 2019 JEDCO Challenge.
Pranam Superfoods: Pranam’s Antioxidant and Protein Bar is made of a blend of spices, plants, seeds, and fruits, and is rich in antioxidants, vitamins, nutrients, and minerals. Pranam believes in nourishing the body, mind, and spirit.
RePurpose Food Co.: A New Orleans-based business that uses reclaimed produce to make nutritious, affordable baby food at low or no cost to underserved communities. Steamed and pureed, it’s an all-natural product with no preservatives or additives. Propeller’s PitchNOLA: Living Well finalist.
Swerve: “The ultimate sugar replacement” is made from ingredients found in select fruits and starchy root vegetables, and contains no artificial ingredients, preservatives, or flavors. It’s zero-calorie, non-glycemic, and safe for those living with diabetes since it has no effect on blood glucose or insulin levels.
The event was made possible by the Greater New Orleans Inc., New Orleans Business Alliance, Brass Roots, NOLA Brewing, and IFTNEXT.