Apologies in advance for the indulgent use of hyperlinks to follow, but there really were so many interesting organizations highlighted last night that I feel the need to link to a lot of them. Plus many people who weren’t able to attend last night’s event at 500 Startups in Mountain View have asked me for a full recap. So here goes.
Of all the food and food-startup events I’ve attended this summer, I found last night’s “The New Food Chain: Investing in Food Startups” event to be by far the most relevant, inspiring and tasty. The event was a balanced combination of presentations, panels, and two-minute startup demos. I left with lots of edible startups I’d like to profile, food apps I’d like to download, and connections I’d like to strengthen. Lots of familiar faces in the room, including some of my favorites:
- Des and Cam from Grubly (and my new friend Peter, Grubly’s engineer)
- Catha, GSB intern at La Cocina
- GSB grad Jen from Revolution Foods
- GSB grad Brendan from Kitchit
- Stanford d.school alumni Abby and Jennifer from Culture Kitchen
- Max from Foodia
- Daria from Cooked.it
- Maria from Cookorgasmic
Will Rosenzweig from Physic Ventures kicked off the evening talking about investing in food and technology. Will was Founding CEO of the Republic of Tea and a Senior VP of Odwalla. Now he’s the Co-Founder and Managing Director of Physic Ventures, a VC that invests in keeping people healthy. He talked about the impressive growth of US healthy food revenue (consistent 7-10% CAGR, forecast to amount to $162B in 2012) amidst a struggling conventional food industry. But he also listed a lot of very real barriers to successful ventures in the food space (CPG-specific):
- Slow consumer adoption
- Low barriers to entry (proven by the impressive stat of 15,000 food and beverage companies entering the market each year)
- A lack of seasoned entrepreneurs (which now seems to be changing slowly)
- Entrenched distributions systems, and the growing competitiveness of retailer private labels
- An immature venture ecosystem with a dearth of early stage VC funding for food ventures
Despite these barriers, Physic is seeing a ton of opportunity in the healthy food space. Will brought up Physic’s MBA intern, my friend from Wharton and food rockstar Ella Merjanova, to talk about the project Physic is calling “Food@Home.” Of the approximately $115M invested thus far in US food-based startups, the majority has been directed to ventures in the eating-out/restaurant space. Physic sees opportunity in shaping the way food is eaten at home. They’ve broken down the at-home eating process on this “million-dollar” slide, and added the names of start-ups playing in each space (NOTE: PHYSIC HAS, SADLY, REQUESTED THAT THIS PHOTO BE BLURRED. SORRY ABOUT THAT!)
Next came a wave of two minute demos which were a ton of fun. We saw:
- Fiona from Foodspotting, which just reached 1M users YESTERDAY. Congrats!
- Brian from Shopwell, a tool which helps consumers navigate the more than 40,000 products in a typical grocery store
- Rajat from E la Carte, one of my favorites from the evening. Founded by Rajat, an MIT PhD dropout, E la Carte makes tablets and accompanying software for restaurant tables that allow consumers to do a ton of useful and fun things: browse the menu (photos, nutritional info, sourcing of ingredients), order and customize orders, play games, draw (a la crayons on a paper tablecloth), and most importantly pay at the diner’s convenience. They sold me. I’d go to any restaurant in the Bay Area to try it out.
- Igor from Skipola who honestly rubbed me the wrong way. He started off the demo by saying, “well we are very similar to E la Carte so this is awkaward” totally fine, but then , “but we’re better. “ He continued with subtle comparisons to E la Carte throughout the demo and, now that I had grown to love the E la Carte guys, I was really turned off. Most people in the food world stand out to me because of their lack of antagonism and petty rivalry and their genuine enthusiasm for all the innovation in the food world. His tone seemed misplaced and counterproductive. And Skipola just didn’t seem as cool…
- Marc from HeardAbout which plays in the microdiscovery space, similar to Foodspotting, although thankfully Marc didn’t feel the need to put Foodspotting down while talking about his product.
Next came an investor panel, during which Tom Cole totally stole my heart. He’s the CEO of Beau-coup, a wedding favor website, but is also an angel investor in two food startups: Foodzie and J&D’s which makes bacon salt. The story he told about the origin of J&D’s was priceless: two management consultants sitting around talking about how they should start a company that makes everything taste like bacon. One of them won $5,000 from submitting a video to America’s Funniest Home videos (no joke) and used that money to start their company. J&D’s now makes bacon salt, bacon mayo, bacon ranch dressing, bacon popcorn and, most awesome, bacon-flavored envelopes. Tom started his introduction with a picture of the bacon-patterned wallet J&D’s gave him and the quote, “my money is in bacon.” Love!
Dave McClure from 500 Startups joined Tom on the panel, along with Ilya Fushman from Khosla Ventures and Aki Sano, co-Founder of Cookpad. Aki won over many of us in the audience by proclaiming, “Just look at all these talented people in the room here that are working on this important problem of healthy eating instead of focusing on social gaming.” Lots of #foodstartups tweets quoting that line.
More fun demos followed:
- Kristee from Smart Gardener, an app I must download asap, which enables data-driven management of your own backyard garden. There are 69M people growing their own food in the US, a number that’s up 20% over last year. These people are spending $2.5B a year and five hours per week to tend to their gardens, and 33% of them are brand new to gardening. The app offers a full “plot to plate experience” (hah!) allowing you to identify your own particular growing season based on your exact location, manage an interactive journal, generate a weekly gardening to-do list, and (very cool) deliver recipes for certain veggies right at the time you should be harvesting.
- Ahmed from Go Go Mongo, which teaches kids to eat better via an iPhone game. In the game, kids are in charge of feeding Mongo foods that make him healthy. One desperate dad emailed Ahmed saying that after playing the game, his four-year-old is asking for cauliflower for dinner, and the dad didn’t know how to cook cauliflower. Cute anecdote.
- Hugh from Wednesdays.com, which enables lunch and dinner clubs. I didn’t get more details on what it really does because Hugh’s co-founder kept interrupting him to speed through the demo. Not super effective.
- Kenji from Yorder, a location-based mobile ordering app. The example they used is ordering concessions at a sports game from your seat so you don’t miss a minute of gametime.
If you’re still reading I’m impressed—this post is getting long. And so was the event. We were ~30-40 minutes behind schedule at this point, and it really bugs me when event moderators don’t publicly acknowledge that the event is running behind. It makes all the difference for me to hear that acknowledged, and to know that the moderator is trying to be respectful of our time and not keep us too late. That never came. At least not before I left.
The next panel was entitled, “Taking Lessons from Corporate Food Brands – Trends in Innovation for Startups.” The panel featured Michael Hammer, Director of VC Strategy at Pepsico, Andrew Pederson, Global Sustainability Chocolate Manager (awesome title) at Mars, and Nitzan Waisberg, my former professor from the Stanford design school. I was thrilled that Nitzan was able to share with everyone the work we did in our class at Stanford called Designing for Sustainable Abundance. We worked with Stanford Dining Services to redesign the dining halls to reduce meat consumption; not make everyone eat vegetarian but to slightly shift the balance in order to save money, improve students’ health, and reduce environmental impact. Stanford Medical School implemented some of our solutions in the Dining Halls in the spring and statistically significant data are emerging that some of our design tweaks accomplished our goal. Very exciting!
There was some talk about what the big brands are trying to do to improve the healthfulness of their products. Michael got me with this line, “We’re looking for salt reduction technologies and new crystal methods, for salt that is, not crystal meth.” Thanks for the clarification. Even though Pepsi’s junk foods are addictive, I’m glad to know they’re not using illegal substances to hook their customers.
Chefs from Google spoke on the topic of “Corporate Wellness: Feeding Next Year’s Innovators” and continued to impress me with all the cool things they’re doing to accomplish their company-wide goal of “having the healthiest workforce on the planet by 2020.” They’re doing tons of research on their food purchasing, which has created surprising results. For example, they’ve found that buying rice bran oil from Southeast Asia is actually the most sustainable, least carbon-intensive, and lowest cost option, even though it’s not local. Google started the first “Community Supported Fishery” (CSF) to enable employees to bring home sustainable seafood to cook with their families, and they’re expanding the Community Supported Food to Go program (“Google Green Grocer”) to include grass-fed beef and produce. So cool.
At this point it was time for me to head out, which means I missed the last panel called “Food Startups: How is Food Bringing Communities Together – Offline and Online?” I was disappointed to miss it but I’m sure I’ll be able to find a recap online. The panel featured Munchery, Culture Kitchen, Spoondate, Punchfork, Any Leaf, and Cookpad.
Overall a great event. Just wish it had stuck to its schedule! We ate delicious food including my absolute favorite salad from Calafia Café (the “Super Salad” with raw kale, quinoa, dried cranberries and walnuts), yummy SanFranola granola, and Coupa Café snacks and coffee.
Hope you’ve enjoyed the recap!