Daily news and analysis about the food tech revolution
Despite the complexity of building two businesses at once and presenting them as one integrated whole, Tovala’s managed to build a highly loyal user base with what is arguably the highest lifetime user value in the connected kitchen space.
I decided to catch up with Tovala’s CEO David Rabie and ask him how he’s managed to find success while other companies have struggled.
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Apeel just raised $250 million from investors including celebrities like Oprah Winfrey and Katy Perry. I spoke with Rogers a few days before they announced the funding to learn more about how he, a materials scientist, got the idea to switch from creating solar panels to developing produce technology. We also got into bigger discussions around food waste, how tech is mitigating it, and the ways in which COVID is affecting our relationship with food (and waste).
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Last week, an email went out to Picobrew customers informing them that PicoBrew had been sold through the bankruptcy process and had new owners (that won with a $7.5 million bid). The email also made clear the new owners weren’t all that interested in running the business.
And so as they sell off the pieces, I’ve been thinking about what lessons we can pull from the remains of a company that once had so much promise. There were many, in part because the company was trying to do so many things. They made hardware, had a consumables business, and sold into both consumer and professional markets. In a way, PicoBrew was as much a test lab for new ideas as it was a company, providing a fantastic case study for various food tech concepts and business models.
Of course, each company is its own unique combination of people, investors and ideas that ultimately results in a journey specific to them. That said, we can learn some truths from story of PicoBrew that are both instructive and broadly applicable to companies charting similar waters:
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Up through February, the company had been trucking along, seeing robust growth for a product that it had largely sold through corporate food service channels.
Then came COVID-19 and everything changed.
I talked with Kreisberg about how a young consumer food brand focused on office workers has dealt with the pandemic. He was very clear that the playbook is being rewritten as we speak.
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And I have to say, that’s how I felt the other day hearing Johnny Grey describe how he thinks about design. We got together over Zoom and he walked me through his latest design concepts, called “The Evening Kitchen,” and I was pulled in as Johnny described a kitchen design process that worked to summon all five senses in creating more warm and welcoming environments.
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Since Nourished lies at the intersection of two burgeoning food tech trends — personalization and 3D printing — I reached out to Snover to learn more about Nourished. In our interview she clued me in on how they settled on 3D printing (fun fact: she actually invented the first ever 3D food printer!), why she’s not rushing to link up with DNA analysis, and sets the scene for a futuristic vision where your health is managed autonomously by wearables and home 3D printers.
It was a super cool conversation that gives real insight into where we’re at right now, both in the 3D printing and personalization spheres. You can read the full transcript of my conversation with Snover, complete with synced audio. I also excerpted some of the most noteworthy parts of our conversation below.
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But what about the constant stream of innovators bringing their products to market? Companies big and small from around the world are launching plant-based meat products of their own, trying to carve out a piece of the lucrative pie before the market becomes too saturated.
The offerings go far beyond burgers — companies are also creating plant-based seafood and developing next-generation protein ingredients to power these new meat alternatives.
To give you a clearer picture of the playing field, we’ve created a database naming the companies making plant-based meat, fish, and protein ingredients across the globe.
This sortable database includes the following fields: Company Name, Protein Category, Website, Year Founded, Region, City/State or City/Country, Company Summary, Location of Product Availability, Total Funding.
You can apply filters to search the database by keyword and also sort by category such as region, protein type and more.
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Welcome to the Spoon Plus Weekly Intelligence Brief. Each week I’ll dissect trends that are unfolding in the world of food tech.
We’ve read a lot over the past two months about the loss of restaurants. Some prognosticators suggest that up to 75% of independent restaurants could permanently disappear.
While the pandemic’s impact on restaurants will continue to be massive and will undoubtedly reshape that industry’s landscape for years to come, another food-related market – appliances and housewares – could also see a dramatic impact in a much different form.
First, the good news. Since quarantines have started in the US, the home appliance market has seen a surge in demand as consumers have shifted to staying and home and eating a much larger number of their meals at home.
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This graphic from NPD’s Joe Derochowski shows how overall kitchen electrics have seen a bump in absolute dollars spent as consumers buy countertop appliances to help them cook at home. Total dollar percentage change for kitchen electrics was up 22% during lockdown.
Figure 1: Percentage Growth of Home Products March 15th-April 18th (NPD Data)
But while a near-term jump in consumer purchases of countertop cooking appliances is no doubt good for the bottom line for some of these companies, the untold story is COVID-19 no doubt set back the same industry from a product roadmap perspective.
At least that’s my belief after looking at data from our COVID-19 impact survey of food and kitchen industry professionals (see the full report here) conducted in late April. I cut a slice of the data from the survey, which had 377 respondents across the food and related industries, to look at how those within the home appliance and housewares market responded.
As you’ll see from this chart, the appliance/houseware business wasn’t immune to the pandemic’s impact, with 43% indicating their company had to lay off or furlough employees (compared to 52% of the broader food industry).
Figure 2: Have you had to lay off or furlough employees due to COVID-19?
Perhaps the most significant impact in the appliance and housewares businesses is not the near-term impact on employee headcount, but a longer-term impact on company product roadmaps.
The graph below shows the results from where we asked our survey respondents whether they had to delay or cancel a product.
Figure 3: Has your company had to delay or cancel a new product due to COVID-19?
58% of those that worked for an appliance or housewares company indicated that their company had delayed or outright canceled a new product. This compares with 45% of those who worked in other food-related industries.
Why cancel or delay? The biggest reason for respondents was lower revenue/shrinking business, with over four in ten (43%) staying this was a reason. Another big reason (respondents were allowed to pick more than one contributing factor) was the impact of COVID on potential customers (40%), while another factor was COVID-related business disruption (38%).
Other reasons stated by at least two startups in the appliance space was lost funding rounds as investors grew skittish due to the impact of COVID-19.
The aggregate data tells a story of an appliance industry that has been hit hard, but differently than restaurants and other food-related businesses. How so? Perhaps more so than non-hardware businesses, appliances, and housewares companies often plan for revenue in the coming year or years with new products that, if canceled, will undoubtedly impact their outlook. New products often take years to bring to market, and the reality is the cancellation of a future product very likely changes the outlook of the company for years.
But it’s even bigger than that. New products often represent a company’s future vision for itself. Not to be too grandiose, but in some ways canceling a product is equivalent to a company canceling or delaying a vision of their future selves.
Not that these companies shouldn’t have shifted strategies. The reality is the landscape is going to be different. Consumers will have less money. The way they buy food and how they consume food is (and already has) changed. To not change how your company navigates a landscape where the map is suddenly much different would be a breach of your fiduciary duties as a company executive.
But it’s still worth trying to understand the long-term impacts of these many altered product roadmaps. To do that, it’s worth looking at what types of products were canceled or delayed.
The table below shows some of the products listed by the respondents:
Table 1: What type of product or service did you delay or cancel due to COVID-19?
As you can see, many responses were fairly generic (“kitchen appliances” or “home appliances”). Others were more granular (“braising pan”, “beverage dispenser” or “smart garden appliance”). Others spoke to more services-related products related to the appliance or houseware industry (“SaaS service” or “Residential kitchen designs”).
But what is most telling, to me at least, is how the language speaks to how these companies are canceling what is next. One respondent said their company is canceling a “new generation of large home appliances”. Another “postponed next version of automation product .” A third cut “new technology and product-related R&D.”
Again, we’re traversing a new world. Product roadmap adjustments are required. But I can’t help but wonder how much innovative work and progress was lost due to COVID-19. In the coming weeks, I’ll continue to evaluate how the reshaped appliance industry landscape will look and what I expect kitchen tech and food-related innovation efforts will look like as we emerge on the other side.
I wrote a couple weeks ago about how smart garden equipment was seeing a massive surge as consumers. In that post, I also mentioned that interest in backyard chicken farming was also on the rise, no doubt due to the same inclinations that led people to start buying seeds and developing plants for backyard gardens at a record rate over the past month or two.
But the sheer jump in interest in chicken-farming related products on Amazon is worth looking at. As show in the graphic below, Amazon-related searches for backyard chicken farming related products has most definitely shot through the roof. Chick supplies? Up eight-fold. Chick starter kit? Six-fold. Interest in chick coops has tripled.
I don’t think we’ll necessarily see tens of millions of chicken farmers, but I would definitely say the pandemic has meant chicken-farming has jumped the chasm from hipster hobby to a broader swath of the population concerned about their own food supply in what has been revealed to be, perhaps more so than they thought, a somewhat fragile food supply chain.
As I wrote last month, consumers are thinking about food sovereignty, many for the first time in their lives, and so I expect at-home food production to continue to be a big trend going forward.
It’s pretty easy to diagnose the reason for the demise of first-generation meal kits at this point: They were expensive and oftentimes required a lot of work for people who, at the end of the day, wanted to get food on the table at, yes, the end of the day.
But in some ways, I think the meal kit may be making a come back in products like that from Omsom, a meal-starter-by-mail service that allows you to essentially cook authentic Asian cuisine with little to no previous experience. In a way, it’s similar to the vision that ChefSteps had with their Joule-ready sauces, which I thought (and still do) think is a good idea before it became a victim of ChefSteps company-specific financial problems.
I also like Yo-Kai’s meal kit concept, even though it’s slightly different from Omsom in that the product provides the entire meal (including proteins). As you can guess by now, I love Asian food, and while I think Asian food meal kits probably are just better because Asian food is better (sorry not sorry), I think it’s more about not only being convenient and making life easier, but it’s also tapping into food passions. I’m going to be more passionate about an Asian food-by-mail offering than a more generic offering from the likes of Blue Apron or Plated. I also like the flexibility that greater and longer shelf-stability provides me (like with Omsom), which was always a problem with Blue Apron, which always felt like a race-against-the-clock for me.
This includes Japan. To learn more about what’s going on in that country, I caught up with Taichi Isaku, the CEO of CoCooking.
I’d met Isaku in 2018 when I was in Tokyo for the second Smart Kitchen Summit Japan. Speaking to me in flawless English, Isaku told me about CoCooking’s online marketplace called TABETE which sold excess restaurant food at a discount to customers in Tokyo and other big cities. You can read about the company here in a post I wrote about their seed funding.
During our chat, we talked about how restaurants are dealing with the COVID-19 crisis, including some of the new digital strategies many are employing. We also talked about how restaurants are navigating Japan’s unique legal system and how the government is dealing with the crisis. We also discussed the ways in which consumer behavior is changing in the midst of the pandemic.
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