The Food + Enterprise Summit took place today in Brooklyn, New York where local food entrepreneurs, producers, distributors, and investors met to discuss improving local food systems.
There was no lack of new innovations and ideas in the room, but there were clear challenges in scaling sustainable, local food products and technologies.
Here are four pieces of advice AgFunderNews gleaned from the first day for entrepreneurs in food and tech.
Be transparent about your long-term motivation
Be honest with yourself and your investors, speakers on the Hidden Traps of ‘Normal’ Food Enterprise Growth panel to delegates.
Join Us! Sign up for our next fund here.
“What do you really want the business to be? And how can finance take you there? You decisions will change five years out. Does your investor think you’re going to be a $50 million revenue business, but you are happy to be smaller? Make sure you realize the balance,” said Dan Pullman managing partner at Fresh Source Capital.
Simplify your pitch
Make your businesses easy to understand, simple, and finesse your elevator pitch, said speakers on the For Love and Money investor panel.
“I love getting a one page executive summary in my inbox,” said Jason Ingle, partner at impact fund Closed Loop Capital.
“Lots of investors look at deals and read the first paragraph of a deck or pitch and if they’re not interested they will toss them aside,” said David Robinov, a serial entrepreneur and Slow Money angel investor.
But for some impact investors in the space, knowing what to look for is still a work-in-progress, according to Stacey Faella, executive director of The Woodcock Foundation. “So you all need patience and persistence with us,” she added.
Predict ticking time bombs in your business model
“Investors expect business models to be broken,” said Fresh Source Capital’s Pullman. “You need to really break down as much detail as you can around execution in the market you’re trying to sell to; who’s going foo buy it? How many stores do you need? How are you talking to potential clients? What’s the selling cycle? How many meetings will you need and people to execute your sales plan? And it’s the same for production operations. You have to immediately tear away the idea that the internet will make it easy; it won’t.”
Calculate your sales timeline
Ian Kelleher, director of alternative channels at Peeled Snacks said it was rare to see businesses calculating their sales timeline, but that it’s hugely important.
“It’s very tough to wrap your head around this,” he said during the Hidden Traps of ‘Normal’ Food Enterprise Growth panel. “There are a huge number of dominoes that need to be knocked over before you get there. It’s not easy to anticipate these. Get help about what dominoes need knocking over and in what order. Get advice.”
Other nuggets from the day…
The labour-intensiveness of food e-commerce is the subsectors’s biggest challenge and many more are destined for failure, argued angel investor Joanne Wilson during an on-stage interview.
“Labor is expensive. It’s great for the consumer, but as an investment it’s hard to make hash,” she said.
She also expressed shock that large grocers were not doing meal kit delivery services. “Why isn’t Whole Foods going meal kits? Their margins would totally change and they would be turning food into products and producing less waste. To me that’s a tremendous opportunity and they should partner with small nimble companies to make it happen.”
Food needs to be humanized again, argued Carolyn Steel, author of Hungry City and an architect.
“We’re dealing with the dehumanisation of food. Commercializing food appeals to our animal selves,” she said. “Food used to animate public spaces as people went into public spaces to purchase their food and interact over it. There’s a reversal of that now. Now food comes in boxes to your door.”
Steel also argued for a return to garden cities.
Did you attend Food + Enterprise? Do you have any other advice to impart to entrepreneurs in the sector? Please get in touch [email protected]