“The heat in the food industry is pretty intense,” Andrew Ive, Food-X’s new managing director, tells AgFunderNews.
Founded in 2014, the program focuses on launching food-related ventures, investing $50k into each through SOSV’s $250 million multi-stage fund.
Food-X selects startups twice a year to take part in a 14-week program where the accelerator and its roster of mentors work to prepare each company for a Series A offering. In some cases, Food-X also participates in that round. The accelerator will launch its fourth cohort in March.
Until Food-X, Ive was an outsider to the food tech world, but he is no stranger to the startup and technology scenes after founding multiple startups and working for big names like Oracle, Proctor & Gamble, and Lloyds Private Bank.
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Since joining the accelerator, he’s been struck by the interest in the food industry from both entrepreneurs and funders after Food-X received around 350 applications for Cohort III, which ended in October 2015.
He and his colleagues are now in the middle of selecting Cohort IV, which will be announced in March 2016. And he’s impressed with many of the ideas. “Some of the business ideas we have read engender a real kind of ‘Wow!’ when you read them; it’s not just a superfood plus an ice cream. It’s a team that has taken this really significant technology from another industry having nothing to do with food and, if they pull it off, it will revolutionize the food supply chain,” he says.
When it comes to looking for quality people behind each innovation, Ive says it’s just as crucial in the food space as in other realms. “It’s phenomenally important,” he says. “If the team and person behind the idea don’t give you confidence that they have the tenacity and an affinity with the consumer, it makes you nervous. At Food-X we find really good founders and teams.”
Companies leveraging existing infrastructure in new ways have particularly caught his eye. He points to a Cohort III alumnus Forkyoo, which partners with local restaurants to create meal kits that allow users to prepare their favorite dishes at home.
Consumer packaged goods like protein-based snacks featuring unique ingredients like worms and crickets have also captured his interest, although the Food-X team is undecided on whether consumers are ready to nosh on creepy-crawlies, he adds.
“From our point of view, we invest in all the companies that join the accelerator and commit mentally to the fact that we will be working with those founders for 3, 5, 7, maybe even 10 years,” Ive says. Ultimately, they see themselves as sitting on the same side of the table as the startup.
Ive’s fresh take on the space makes it easy for him to identify more macro current trends. “From a food movement standpoint, and as a newbie coming into the whole category, there seem to be two camps,” he explains. “There’s the camp that believes there needs to be an absolute alternative set of companies growing up to rival and do away with the old traditional food companies.”
“Then there seems to be this group of folk who believes more traditional companies need to start shifting, changing, and evolving in new ways; to start becoming more innovative and responsive,” he adds.
While this may be challenging for some mega brands, Ive has noticed a large number of the bigger players acquiring small startups to help them stay on top of food trends.
Examples in the consumer foods space include Hormel Foods nabbing natural meat producer Applegate Farms, The Hershey Company buying all-natural jerky snack brand KRAVE Pure Foods, and General Mills purchasing natural and organic food brand Annie’s.
Compared to his experience in other sectors, Ive has started to view the space as part of a bigger picture. “As I get deeper into Food-X and meet more of our mentors, I realize just how critical the food industry is. It’s not lipstick, or a car, or something that people sort of use. It’s absolutely fundamental to our survival, existence, and health,” he explains. “Yes, it’s pleasurable. It’s something that brings us together as a family around the table, but there are some significant challenges that we need to address as a food industry to improve our lot as a race. That’s what’s hit me.”
Ive takes this quandary one step further, drawing on his past experiences to surmise what the solution to our current food production system might look like. “We need a food system that isn’t based on a post-industrial revolution, widget-based approach. We need something closer to the source, an efficiency that allows us to produce good, healthy, nutrient-rich — not sugar-rich — food.”
Entrepreneurs have a big role to play in helping the solution become a reality. “I don’t have a lot of faith that politicians or policymakers are going to solve the problem, but I do think that entrepreneurs, together with well-educated consumers who are starting to ask the right questions and starting to get real dialogue with the food industry, will come up with the solutions,” Ive says. “I have the utmost faith in entrepreneurs.”
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Image credit: 3D Perspectives, the official corporate blog of Dassault Systèmes