As more and more startup accelerators enter the food tech space, one trend on the rise is larger entities building out programs to keep a pulse on innovation. Several major CPGs already have programs in full swing around the world, and now, other organizations are starting to develop their own takes on the accelerator model.
One such organization is the Dairy Farmers of America (DFA). Started in 1998, the cooperative of family farmers now has 13,000 members from dairy farms across the country and works with some of the world’s largest food producers besides manufacturing its own brands.
It’s also home to a relatively new accelerator program that gives startups an entry point into the dairy industry and at the same time looks to bring more tech to the farm to help production, animal health, and safety, and other elements. And, of course, it’s a way for the DFA to connect with younger companies pushing newer, tech-driven ideas to the agricultural industry.
That’s especially important right now, as the U.S. dairy industry as a whole has seen a significant drop in numbers of late. The USDA reported that more than 2,700 dairy farms closed in 2018 in the U.S. The reasons for these closures are legion, politically complex, and partly based on changing consumer demands. Tech may not be able to solve all of them, but bringing more innovation to the farm could help with labor costs and shortages, product diversification, and measures to make farms more productive.
Speaking of DFA’s inspiration behind starting an accelerator, the program’s Director of Innovation, Doug Dresslaer, told me, “[We] needed a way to partner with someone who could [get us] on the right path and get in front of some new technologies.”
The program focuses on two areas, agtech and dairy food products, and on finding companies innovating in those realms. For example, ripe.io, who uses blockchain to improve supply chain transparency, was a member of the 2018 cohort. My Dairy Dashboard, one of the members of the original cohort, makes a cloud-based data analytics solution for dairy producers and their advisors.
The accelerator takes around six or seven companies per cohort, according to Dresslaer. The program itself is a combination of onsite meetings and virtual programming. Of the 90 days that make up the duration of the program, participants will usually spend four weeks of that time onsite in Kansas City (where DFA is headquartered), meeting with mentors and industry figures and attending sessions around business development, product development, marketing, and other aspects of startup growth. While there’s no requirement for companies to relocate fully to Kansas City, Justin McCarthy, a Public Relations Manager at DFA, says many of them hire locally anyway, to have a presence near headquarters.
As far as the types of companies DFA chooses for the program, it’s based largely on how their innovations can improve processes, reduce margins, and improve overall productivity on the farm. While McCarthy noted that DFA is staying current with topics like plant-based dairy, right now, the focus is more on helping the farmers through tech.
To that end, the 2019 cohort featured a mix of sustainability, like Bezoar Laboratories’ patent-pending probiotic for cattle that reduces methane production, and technology, such as Labby’s AI-powered smartphone app that tests milk onsite to save farmers the time and money from sending samples to the lab. The 2029 class also included a few smaller CPG companies making dairy-based goods and snacks.
McCarthy notes that on the farm, especially, adoption of tech is increasing. “Most farmers are very receptive to new tech developments,” he said, adding that nowadays farms are being passed down to younger millennial generations who “understand creativity in technology” and are “much more willing to entertain” conversations about adding tech to the dairy farming process.
Larger organizations may be getting into the accelerator game, but the dairy industry itself doesn’t have a huge presence there yet other than Land O’ Lakes’ program, which is currently on hiatus according to a recent email sent to The Spoon.
For its program, DFA typically looks at companies with a product already in market or, in the case of hardware offerings, close to manufacturing stage. Unlike many accelerators, there’s no hard stop for applications, which are instead accepted on a rolling basis throughout the year. And while they’ve yet to announce dates for the 2020 cohort, the program typically runs in springtime.
But as Dresslaer noted, the program itself is really just a jumping-off point to a longer-term relationship between DFA and the participants. “The goal of this type of program is that we only take companies that we see long-term relationships being built with them,” he explained. “We really want to help them and partner with them in some way.”
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