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The Spoon

Daily news and analysis about the food tech revolution

The Hatchery

SKS 2019: Why Big Food is Betting So Heavily on Startup Accelerators

So you’re a new food startup who wants to level up and get some funding and mentorship. Or you’re a big CPG company who wants to uncover the latest food trends and acquire companies already tapping into them.

The answer for both quandaries might be food accelerators or incubators. Key word: might.

At SKS 2019, we dove into the wide world of food accelerators: what are they, which types of food companies should consider them, and why they’re suddenly all the rage. Weighing in on this conversation from the stage were Natalie Shmulik, CEO of The Hatchery; Tessa Price, Program Manager of WeWork Food Labs; and Peter Bodenheimer, Partner & Managing Director of Food-X.

If you’re contemplating applying for an accelerator program or just curious what they actually entail, you should watch the whole video of the panel below. Here are a couple of standout points made by our speakers to spark your interest:

What do food accelerators look for?
All of the panelists agreed that when searching for candidates for their programs, fit is critical. Shmulik emphasized the importance of a good founder presence. Price said that companies have to align with WeWork’s values and offer some technology that can accelerate WeWork’s ecosystem. For Bodenheimer, though, one of the biggest factors is persistence. “When the sh*t gets tough, will they stick with it?” he asked.

Why are food accelerators so hot right now?
You may have noticed that food accelerators seem to be popping up left and right lately. According to Bodenheimer, this is at least partially because of Big Food companies. He explained that large food and beverage companies typically only allocate 1-2 percent of their budget to R&D, so they turn to accelerators as a way to access more innovative products. Sometimes this can be productive, but other times it can be muddy, especially if the Big Food company doesn’t have a clear objective for their program.

So, what are the newest food trends?
Of course I wasn’t going to let these industry experts off the stage without asking them about the innovative new trends they were seeing bubbling up at their respective accelerator/incubator programs. Shmulik noted that more and more companies were looking to make eating an experience, not just a task. Price spoke about personalized nutrition and on-demand ordering, and Bodenheimer said he’d seen a lot of companies tapping into food as medicine, plant-based offerings and CBD.

If you want to hear the rest of the panelist’s up-and-coming dining trends to watch, or learn more about food accelerators in general, watch the full video below.

SKS 2019: Building a Food Accelerator

The Hatchery is an All-in-One Incubator for Chicago’s Food Entrepreneurs

Say you want to start a company to start selling your granola, vegan burgers or world-famous kombucha. How do you make the leap into a bona-fide business?

It’s definitely not easy. Budding food companies have to find an industrial kitchen space, funding, co-packing facilities and distribution partners. It can be really, really expensive.

That’s where The Hatchery, the Chicago-based food business incubator comes into play. “Company owners would normally have to spend 80-100K to build out their own kitchen,” Natalie Shmulik, CEO of The Hatchery, told me as I toured the facilities this week — a huge financial risk when you don’t even know if your product is going to be successful. With The Hatchery, however, nascent food entrepreneurs can rent out kitchen space, coolers, storage space, and other necessary pieces to run their own business, without investing a massive amount of capital up-front.

The Hatchery was founded three years ago when ICNC, a small business incubator, suddenly started receiving a massive influx in applications from food and beverage companies. It didn’t have a suitable kitchen space for these startups so it teamed up with Accion, which provides small business loans, to create a non-profit that would foster food businesses and provide them with a startup space and the potential for investment.

In addition to physical space, members also get free access to The Hatchery’s series of events on topics like restaurant technology, accounting, and branding. The public can attend the events for a fee. Hatchery members also get connections to some of the incubator’s partners, including large food corporations like Mondelez, Kellogg, and others. For example, ingredient provider Ingredion has a permanent chef on-site to help entrepreneurs figure out how to make their products shelf-stable, etc.

The majority of The Hatchery’s entrepreneurs work in the CPG space, but the incubator also has companies in food tech and catering (both Tovala and Farmer’s Fridge are members). According to Shmulik, a few top trends they are currently seeing are ghost kitchens, healthy snack food, plant-forward foods, and even CBD products. (Though CBD food and drink is technically illegal, Shmulk told me that the state of Illinois had approved it for food use.)

Pricing varies, but Shmulik gave me a number of $2400 per month for an entrepreneur, which covers storage, coworking space, kitchen use and member coaching. The incubator currently has about 200 members and 20 businesses operating out of its space.

Lately food business incubators have become quite en vogue. Notable players besides The Hatchery are the Chobani Incubator program, D.C.’s Union Kitchen, and The Kitchen in Israel. However, The Hatchery is different in that it doesn’t take any equity, offer any funding, or limit membership to any sort of timeline. In that way they’re almost more akin to straight-up shared industrial kitchen spaces, like Boston’s Commonwealth Kitchen or Pilotworks, which offered commercial kitchen space for budding food entrepreneurs.

Of course, Pilotworks ended up having to shut down after failing to raise enough capital to continue. This doesn’t seem as much of a risk for The Hatchery, as it’s backed by companies with pretty deep pockets.

That’s a relief for aspiring food entrepreneurs in Chicago. Shmulik told me that there are only two shared kitchen spaces in the city, so it can be very difficult for entrepreneurs to secure a spot. As demand for local food rises and more entrepreneurs step up to fill that need, all-inclusive food incubators like The Hatchery will become even more of a hot commodity.

Natalie Shmulik will be speaking about the food tech startup ecosystem at SKS 2019 this October! Early Bird tickets are on sale now. 

4 Food Tech Incubators Startups Should Look Into Right Now

Last week, The Spoon chatted with WeWork Labs’ Tessa Price and Food-X’s Peter Bodenheimer about foodtech accelerator programs and what they can offer to startups seeking the next phase of growth.

Brought up during the conversation was an important point that sometimes gets lost: the difference between accelerators and incubators. While the sheer number of programs nowadays means the distinction between the two is often, as Bodenheimer suggested, “interchangeable,” there are still some key differences. Most notably, incubators tend to foster companies who are still very early on in terms of their growth and who may not necessarily be ready to commercialize. And unlike accelerator programs, which typically run for a set amount of time, incubators most commonly take participants on a rolling basis.

Even those distinctions aren’t set in stone, however, and the best way to decide if an incubator is right for your food business is to examine the program details and see if they line up with your own ideas and goals about your business. With that in mind, here are some of today’s most popular food tech incubators:

The Kitchen
Israel

The Kitchen bills itself as a “FoodTech Hub” and takes companies on a rolling basis. It was founded by Israel’s largest food and beverage manufacturer, the Strauss Group, and invites participants from up and down the food chain. Notable members of its portfolio include food safety company Inspecto and cellular agriculture startup Aleph Farms.

To apply, startups are asked to introduce themselves via email that includes an overview of the company, team, and competitive advantage. If your credentials pass muster, The Kitchen will set up an interview process that leads to an eventual meeting with its Office of the Chief Scientist, with whom the buck stops. Chosen companies get a $500,000 budget over a two-year work plan, office space, and assistance from various business leaders in the food industry.

Email The Kitchen to start the application process.

Chobani Food Tech Residency
NYC

In some ways, Chobani’s Food Tech Residency operates more like an incubator than the company’s officially titled Chobani Incubator program. The Food Tech Residency brings startups to Chobani’s facilities so they can work side-by-side with members of the company’s operations team. Since the Residency is all about innovation and improving ideas and solutions, startups don’t have a product in the market yet to be eligible. Successful applicants will be given a chance during the program to pitch their businesses and potentially secure funding.

Chobani is currently taking applications for the next Residency program, which kicks off in September 2019. Applications are open until July 14. Since the program is more tech-focused, traditional packaged food and beverage products are not eligible for this program.

The Hatchery
Chicago, IL

The Hatchery is a massive facility in Chicago that offers food entrepreneurs access to shared kitchen and co-working space. It also maintains an incubator-like program that offers, coaching and consultations, access to a large member network, classes, and opportunities for financing (via The Hatchery’s joint-venture partner Accion).

One of the cool things about this program is its large number of events and workshops open to the public, which give potential applicants a chance to check out the facility and its culture in depth before handing over an application fee. Check the schedule here, and if it’s intriguing enough, you can apply to become a member on an ongoing basis.

Those serious about joining should be willing to base their operations out of the Chicago area.

Union Kitchen
Washington, D.C.

Union Kitchen offers multiple levels of involvement for food startups, from simply using its shared kitchen space in Washington D.C. to joining its incubator program (which it confusingly refers to as an accelerator). For the latter, chosen companies work with Union Kitchen to move from idea to concept and to actual product, and eventually launch their goods and/or services first in the D.C. area and then into other regions.

Union Kitchen participants come from across the food industry, though there is a strong emphasis on consumer packaged goods. The program happens in three phases over the course of about a year and a half. Those interested can schedule a tour beforehand. Union Kitchen takes applications on an ongoing basis.