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Daily news and analysis about the food tech revolution

home brew

Exclusive: PicoBrew is Up For Sale

PicoBrew, the Seattle-based maker of high-tech beer, spirits and coffee brewing appliances, is up for sale the Spoon has learned.

According to company CEO Bill Mitchell, PicoBrew had until mid-December to close a new funding round as part of terms agreed to with a bridge lending group comprised of current and new PicoBrew investors. PicoBrew had decided to take on bridge financing last year as it looked to lock down its second institutional funding round.

Mitchell said conversations went fairly deep and they entered due diligence conversations with a few potential strategic investors, which led the lending group to extend the original due date on the loan from June to mid-December of last year. However, PicoBrew ultimately wasn’t able to close the funding round, and the bridge lender decided to call in the loan and force PicoBrew into selling the company through a somewhat complicated process called receivership.

Mitchell indicated the bridge lending group has plans to continue funding the company through the Washington State receivership process and hopes to essentially take full ownership of the company with a winning bid, but runs the risk that another bidder will swoop in with a higher bid.

Mitchell told me the receivership motion was filed yesterday.

So how exactly did PicoBrew get itself into this position in first place?

According to Mitchell, it’s a complicated story in part because the company’s product portfolio has become increasingly complicated. After first making products tailored towards home and prosumer craft brewing enthusiasts with the Zymatic and later the Pico, the company ventured further into equipment for both small craft breweries and cold brew coffee makers. From there, the company made a small distilling add-on for its home and pro brewing appliances, teased a new coffee machine, and, most recently, has expanded further into professional distilling with a new spirits-aging product line called CaskForge (more on that later).

While all of these products are essentially high-tech beverage appliances, they serve different markets and, as a result, each were of varying interest to different suitors. According to Mitchell, the company had “investment interest in PicoBrew and spent hundreds of hours with some of the biggest names in the industry.”

Ultimately, though, things got hung up due to the diversity of the portfolio and, said Mitchell, their cap table.

“It’s important to understand that we operate a diverse and complex business,” said Mitchell. “PicoBrew is comprised of 3 completely different yet complementary businesses and as you might expect from a 10 year old startup, we have a diverse and complex cap table as well, both of which have hindered our fund-raising efforts.”

In other words, beer might be interesting to one strategic investor, coffee products to another. However, finding an investor who wants the entirety of the product portfolio, which the company has sometimes described as “brewing computers”, has been a tough task, at least up until this point.

I also think, generally, hardware startups have been a tough sell over the past couple years in the world of venture capital. And while PicoBrew does offer suitors a hardware+ continuous revenue model with their food supply business with PicoPaks, the company’s yet to turn that business into a huge revenue driver.

So what now?

Wait and see who bids says Mitchell. He indicated that he expects other potential buyers to come out of the woodwork, but wouldn’t name any names.

I can see a big beer or CPG company being interested in the IP portfolio the company’s amassed has built around beer and spirits. I also think we’re slowly moving towards a post plastic coffee pod world, so I wouldn’t be surprised to see the company’s new coffee machine business being of interest as well to appliance company suitors looking to take on Keurig.

Being a backer of the company’s first Pico through a Kickstarter campaign back in 2015, I personally hope someone buys the company, in part because I’d like to see my countertop beer brewer continue to have the support of a growing company.

On another level, the company’s also been fascinating to watch ever since I first wrote about the Zymatic back in 2014, in part because it was the first time I’d seen a company attempting to bring the same precision and automation to beer I’d seen in the food within the Modernist Cuisine movement. Founded by a couple Microsoft founders (Mitchell essentially ran a skunkworks division for Bill Gates, leading the software giant’s first smartphone and smartwatch efforts), the company has essentially been doing continuous invention in the drink space since their founding a decade ago.

They may not have hit on a home run yet, but the company’s been fun to watch for a food tech nerd like myself, so let’s hope someone with deep pockets purchases the company and continues to fund their crazy ideas.

Food Tech News Roundup: Ben & Jerry’s, Food Waste Snacks, and Target Takeovers

It may have been a short week (at least for some of us), but it still feels good to reach the weekend finish line. Let’s celebrate with some food tech news, shall we?

We’re still riding a high from the announcement of the FoodTech 25: twenty five companies we think are changing the way we grow, source, cook, eat, and think about food. But lots of other food innovation news popped up around the web as well! Here are a few of our favorite stories, from Ben & Jerry’s new sustainability initiative to BYO homebrewing packs.

Chobani incubator to focus on food tech
Lately, quite a few CPG brands have been launching food-related incubators — including Greek yogurt darling Chobani. This week Chobani announced new incubator program which will revolve around our favorite subject: foodtech. The Food Tech Residency will be the company’s fourth incubator initiative, and will run parallel to their original incubator class. They’re currently searching for startups involved in agtech, food safety, innovative packaging, and other areas to improve the food system. Once selected, participating companies will have access to all Chobani Incubator programming, including factory visits, mentorship, opportunities to pilot new products, and a chance to pitch for funding. They have three spots open, so if you’re an emerging food tech or agtech startup, get on it!

 

Tyson Foods rolls out snacks made of food waste
Poultry giant Tyson Foods has created a snack brand which makes “Protein Crisps” out of food waste such as chicken breast trim, spent grain from beer brewing, and excess vegetable purée from juicing. Dubbed “¡Yappah!,” the brand will be used as an umbrella under which Tyson will release other sustainable food products. Each individual 1.25-oz serving has 8+ grams of protein and is packaged in a recyclable aluminum can. The crisps launched on IndieGoGo on May 31st, and are available to back now with a projected ship date of July 2018. Clean meat, food delivery startups, and now food waste snacks? Tyson Foods continues to work to be on the cutting-edge of all emerging food innovation trends.

PicoBrew now offers DIY PicoPaks
Countertop homebrewing startup PicoBrew rolled out DIY PicoPaks this week via Kickstarter, an option that lets Pico users load up their own ingredients to make beer and fusion drinks. The new bring-your-own ingredients option – which will work with the new Pico U as well as the existing Pico Cs and Pico Pros – provides an option for those in the Pico community who have wanted brewing flexibility beyond want preconfigured PicoPaks allow. The reward bundle includes containers for both beer brewing and PicoPak minis to create “fusion drinks” at home such as kombucha or goldenmilk. Post-Kickstarter, it will be interesting to see if PicoBrew offers brewers a variety of DIY container bundles depending on their preferences and brewing frequency.

Three new Targets to open up in Seattle area in 2019 & 2020
Target will add three smaller, grocery-sized stores in the Seattle area over the next two years, according to the Seattle Times. These are in addition to their original urban format store, which opened in Seattle in 2012. Their new stores are designed to fit into dense cityscapes and will stock products tailored to the surrounding neighborhood. This, as well as their recent expansion into same-day delivery, smart home-powered replenishment service, and acquisition of Shipt, is another way that Target is trying to keep up with the shifting grocery game and fight against Amazon.

 

Photo: Ben & Jerry’s.

Ben & Jerry’s works to offset their ice cream’s carbon footprint
Customers at Ben & Jerry’s scoop shop in London’s Soho neighborhood now have an opportunity to counterbalance the carbon footprint of their waffle cone of Cherry Garcia or Chocolate Chip Cookie Dough. For each purchase, Ben & Jerry’s will pay a penny to offset the carbon used to raise the cows, produce the ice cream, and ship it to the shop. Customers then have the option to donate a cent of their own and double the impact.

According to Forbes, the ice cream company is partnering with a not-for-profit who is helping them use blockchain to divide carbon credits — which are typically quite large — into smaller transactions which can link up to each ice cream purchase. They’re even developing an app to help customers keep track of their person carbon offsets.

 

Photo: Anova

Anova finally opens new Anova Kitchen
We’ve been monitoring the retail ambitions of sous vide specialist Anova closely, so we were intrigued to learn this past week that the company will finally open the Anova Kitchen for a sneak peek on June 6th. A company spokesperson told The Spoon that the new space will be used for events and will have some public-facing retail space, but that we shouldn’t expect the Anova Kitchen to be open to the public every day.  This contrasts with Brava, who plan to open a full time retail space early this summer.  Either way, we’re intrigued to check out the Anova’s new retail/event space. If you are too, make sure to RSVP for next week’s event and report back to us!

Did we miss anything? Tweet us @TheSpoonTech to let us know the best food tech news of the week!

PicoBrew Surpasses Anova To Become Top Food Kickstarter Campaign Of All Time

With just one day to go, PicoBrew’s latest Kickstarter campaign surpassed Anova to become the top campaign of all time in the food category. The company’s Pico C campaign reached $1.812 million to eclipse Anova’s $1.811 million campaign for the Anova’s 2014 Precision Cooker campaign.  The company announced the milestone in a livestream update on the campaign page.

While the Pico C reached its initial funding goal of $350 thousand within hours of launch, breaking the record was no sure thing. After an initial surge of backers who gobbled up the best backer rewards that offered a $279 price on the company’s latest model beer brewing appliance, momentum slowed. Earlier this week, the campaign still stood more than a $100 thousand away from the record.

But thanks to a last minute surge of backers in the waning hours of the campaign, the Pico C is now tops in the the food category on Kickstarter.

“We picked the Pico Model C as a Project We Love early on and are thrilled that, with the help of over 4,100 backers, it broke the record for Most Funded campaign in our vibrant Food category,” said  Clarissa Redwine, Kickstarter’s Design and Technology Outreach Lead for the West Coast in an announcement.

PicoBrew seemed to have its sights on the becoming the top food Kickstarter from the beginning. The company announced new backer rewards throughout the campaign, including some fairly surprising new hardware add-ons. First came the PicoStill, a device that can be used to make essential oils and even whiskey, and last week the company announced the PicoFerm, a fermentation monitor. The company also announced the Pico would be able to brew kombucha and offered free PicoPaks as additional incentives throughout the campaign.

Anova was unseated after holding the #1 spot in the food category for almost three years. Of course, both campaigns are a long way from the top when looking at top Kickstarter campaigns of all time, with Pebble (now owned by Fitbit) claiming two of the top three spots and the troubled Coolest Cooler claiming the #2 spot.

A Look At The New Machine Washable Pico C Keg

This morning I wrote about PicoBrew’s new Kickstarter campaign and their new lower-priced Pico C homebrew appliance (starting at $279).

While much of the focus for PicoBrew in this most recent product launch was reaching a more affordable price for new brewers, the company also focused on making the process of home brewing a little easier. This effort included a new brew app as well as a new beer subscription service, but perhaps the biggest step forward in ease-of-use is the new Pico C Keg.

What’s the difference with the C Keg and the older ball-lock model that came standard with the original Pico? For one, the connectors move away from a ball-lock model to a much simpler hose-barb connector.  According to PicoBrew CEO Bill Mitchell, newer brewers often will neglect to fully lock in the ball-lock connectors on the older model, so the newer connectors should eliminate that possibility.

But perhaps the biggest difference is the new Pico C’s removable lid and machine washability. One of the challenges with home brewing is the need for home brewers to make sure equipment is really clean, which usually requires special cleaners that need to be purchased at a local homebrew store or speciality retailer online. With the Pico C Keg, the need for special cleaners are eliminated since you can just drop in the dishwasher.

Of course, this doesn’t eliminate the need for cleaners for serving kegs, but one step at a time, right?

You can watch PicoBrew’s Bill Mitchell explain the new C Keg in the video below.

Want to meet the leaders defining the future of food, cooking and the kitchen? Get your tickets for the Smart Kitchen Summit today.

AB InBev & Keurig Team Up to Create Home System For Beer & Cocktails

While companies such as Picobrew and Whirlpool’s Vessi were showcasing their high-tech methods for brewing beer at CES 2017 in Las Vegas, two giants of the beverage industry confirmed a partnership that could shake up the market for home-based brewers. AB InBev, the world’s largest beer brewer, and JAB Holdings, the corporate parent behind the Keurig pod-based drink system, announced they are teaming up to create a home-brewing system that can deliver beer and spirits to consumers.

The deal should come as no surprise given that JAB Chief Executive Olivier Goudet is also the chairman of AB InBev.

The announcement leads to more questions than answers, but the partnership is likely to take advantage of the technology behind Keurig’s Kold machine which offered single-serve sodas. Considered a bust, Kold was discontinued in the summer of 2016 when customers who owned the product were given refunds. Some of the Kold features, such as “Party Mode,” which allowed a user to crank out more than 30 drinks in a row, will be useful for the new unit.

The new appliance will be able to serve beer, spirits, cocktails and mixers. Given that those beverages require vastly different brewing methods, In-Bev and JAB might be looking at two machines. Beer requires a lengthy fermentation process which would be challenging to distil into an on-demand dispenser. For beer lovers, the two companies could develop a popularly priced home-fermentation machine along the lines of Whirlpool’s Group W Indiegogo project, Vessi. Such a machine might carry the branding of AB InBev’s popular Budweiser or Stella Artois, targeting the fan bases of those already popular brands.

The AB InBev/JAB Holdings partnership will have little impact on the higher-end home beer brewing market. Entrepreneurs looking to build DIY systems are focused on experienced hobbyists who want to create highly customized brews. Home brew masters are rarely novices and are more likely to want machines that allow them to focus more on the art of brewing rather than the mechanical process. The brewing appliance created by the new partnership will target those wanting to up their home entertaining game rather than sophisticated drinkers.

The Keurig for the cocktail set is an easier play for the two companies, with a retooled and improved version of the Kold (a 2.0) ready to tackle that segment. The robotic bartender market is already well established with such companies as Barbotics, Blend Bow and Bartesian already creating interest with early adopters.  Bartesian is making cocktails in second utilizing a proprietary cocktail capsule. Neither InBev nor JAB owns any companies in the spirits business, but plenty of brand names in that space would be eager to partner with someone able to crack the mass market with an adult beverage Keurig machine.

On the surface, building a market for home beer making could appear to be a conflict for In Bev. In actual practice, companies such as Starbucks, Dunkin Donuts and even JAB’s Peet’s Coffee did not lose branded-store customers when they expanded their reach to include retail channels and Keurig K-Cups. In fact, by allowing beer drinkers to enjoy a fresh Bud or Stella from their home taps could extend customer brand loyalty to bars and restaurants. The challenge for the two companies will be to create an easy-to-use set of ingredients and recipe to replicate the branded brews while allowing the advanced home brewer the opportunity to put his or her signature touch on the final product.

One thing is certain—anything proprietary that results from AB InBev/JAB alliance will be more closely guarded than Keurig’s original K-Cup design. The patent for Keurig’s single-serve pods expired in 2012 because of the ambiguous wording of its original claim. Failure to protect its IP cost the company billions as competitors lined up to create pods for the popular machine.

PicoBrew Will Now Let You Customize Your Brew With FreeStyle PicoPaks

While PicoBrew’s second generation home brew appliance, the Pico, made significant leaps forward in approachability when compared to the company’s first home-brew machine in the Zymatic, it also sacrificed one really cool feature: the ability to customize your home brew.

That’s because the Pico uses a pod-system called PicoPaks that come preconfigured with the grains and hops rather than requiring the home brewer to mess with all that him or herself. It makes brewing much easier, but it also means less creativity since you are brewing a pre-configured and pre-measured brew from the PicoPak.

But at CES this week, the company announced the arrival of the FreeStyle PicoPak BrewCrafter, their new online PicoPak configuration tool that allows home brewers to drag and drop ingredients in a virtual PicoPak to create custom homebrews.

Drag and drop beer making is really cool, but unlocking custom beer brewing with the Pico required much more than simply creating a web-based configuration tool. The vast majority of the work was on the back-end manufacturing and assembly of the new custom PicoPaks, where the company has created the ability for a PicoPak to move down the assembly line and get a one-off custom mix of grains tailored by the home brewer through the BrewCrafter tool. This is a significant departure from traditional assembly line production where there’s an emphasis on high degrees of repeatability. PicoBrew CEO Bill Mitchell told me they’ve had some observers who work with automated food production visit their production plant in Seattle and have said they’ve never seen anything like it.

As a Pico owner, I’m pretty excited about FreeStyle PicoPaks. However, I am slightly worried I’ll go overboard with certain ingredients like when I would frequent those Mongolian-style BBQ restaurants where you tell the cook all the ingredients you want on your food, but soon realize three handfuls of hot peppers might not have been such a good idea. It looks like Pico will try to steer amateur brewers like me away from overloading certain flavors as the BrewCrafter will gently nudge you back towards sanity with mix-balances to “ensure creation of a delicious beer recipe.”

For the Pico user, FreeStyle PicoPaks are available now. The BrewCrafter guide holds your hand along the way by provided “know-good” baseline beer recipes for you to tweak with a personal flourish by adjusting grains and hops to change the flavor, alcohol content and more. Admittedly, creating a custom brew in a browser might not satisfy those hard-core home brew types that want to measure grains and hops the old fashioned way to achieve their beer masterwork, but it’s likely those folks probably wouldn’t have bought a Pico in the first place.

And anyway, if you do own a Pico and want greater control over your home brew, you can always buy a Zymatic.