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Daily news and analysis about the food tech revolution

The Kitchen

Dispatches from Israel Food Tech Ecosystem: Amir Zaidman, The Kitchen

Last month, I visited the Kitchen Hub at their office in Ashdod, Israel and sat down with Amir Zaidman, Co-Founder and Chief Business Officer of the Kitchen. Prior to co-founding the Kitchen, he spent 10-14 years in business development in medical technology working on both the startup and investing sides. 

We chatted about what the Kitchen does, what sets Israeli startup founders apart, what the ecosystem needs, how precision fermentation is the new software, and what it’ll be like for Israeli customers to try the first cultivated meat product. 

J: Let’s talk about what the Kitchen is and what it does. 

A: First and foremost, we have capital we invest in startups like a seed or pre-seed stage venture capital. We have more money than a typical seed stage venture capital would invest because we are also getting money from the government to invest in those startups. While a typical seed stage fund would not invest $200-0.5M, we can invest closer to $1M in a company. Those companies become portfolio companies and they have access to the facility but it’s also the very close support that the team in the Kitchen is giving the teams in the companies. At least for the first 2-3 years after we invest in them, it’s a very intense relationship. 

J: Would you say the Kitchen is like a venture studio? 

A: Not exactly. For us, venture studio is when we start with a blank page. Then we brainstorm and figure out what we want to do based on needs from the industry, global trends, and where the industry is going. We start scouting for the enabling technologies, science, intellectual property that might be relevant for the project. When we find that, we go into negotiations with universities or research institutes and we go into a licensing agreement to own the license for that technology. Then we go recruit the team and give them equity into the new company that we created that holds the license for the technology. The venture studio model for us is starting from nothing and bringing all of those building blocks together. 

The third thing the Kitchen does is activity in the foodtech community in Israel. 

J: Let’s dive into your role here, I understand there’s two main components so can you elaborate on what those are?

A: I take part in this venture studio model by thinking about our new directions and what we need to do. The most significant part is making deals with universities and entrepreneurs for the terms under which they’ll come into the Kitchen. It depends on whether or not it’s a venture studio or a regular investment. But if it’s a regular investment, it’s very much in line with a typical VC investment model. And if it’s on the other side, then it’s more complicated with the licensing agreement and everything that has to do with that. 

The second thing, which is the part of my job that keeps me most busy, is working with the CEOs of the startups on their business development activities, around possible agreements that they might have like joint development or collaboration agreements, and most importantly, on their next round fundraising.

J: You have a view of the entire food tech ecosystem here because you’re working with many startups, but you also have a more specific view of individual startups and what they need. What secret weapon do startups here have that make them competitive in a global market? 

A: I think there’s a few elements to that. One is that Israelis are very entrepreneurial, which means that a person might define himself as an entrepreneur, regardless of the vertical that he’s working in. One day, he’s an entrepreneur in medical technologies and the next in food tech. When there is a new field which is impactful, it will draw seasoned entrepreneurs from other verticals to come and build their next startup in the space. 

The second thing is that there’s a lot of innovation in Israel. 

But I think the most important is that because Israel is such a small market, all Israeli startups are born global. They never consider the Israeli market first. They think of Europe, the US, and Asia first. They have to think global which helps them get a bigger sense or a better sense of the bigger picture.

J: Where do you find the best research and the best founders here?

A: Everywhere. The food tech sector is so diverse. If you look at cybersecurity, they come from specific intelligence units in the military. It doesn’t work like that in food tech in Israel. We source the IP and science from specific research institutes, but the entrepreneurs themselves, we get them from everywhere. We get them from previous entrepreneurs of biotech companies, medical technologies, or food companies.

J: They come from everywhere but what are the characteristics that they share? When you’re thinking about building a community of food tech startups here, what are you looking for? 

A: You don’t stumble upon foodtech. It’s not something that you do because it was there, you have to want it. And you typically want it because you feel that this is something that can change the world for the better. All of the CEOs and founders of those companies are passionate like that and this is what makes them unique. 

J: With the Kitchen’s access and view of the food tech community as a whole, what is it that you think that founders here really need? What kind of resources do you hope will become more accessible in the coming years?

A: You’re touching a very hot point, because we’ve been talking about those issues for the past three years. If you’re a food startup in the US, you’ll come up with the idea, you will go to a research center, and they will help you develop it. In Israel, you cannot outsource the development or the manufacturing.There’s a lot of infrastructure that is missing. And we’re working on that. Not the Kitchen specifically, but the Israeli community with some support from the government. Every startup in precision fermentation has to buy some equipment and there’s a movement to set up a precision fermentation center, which will be like cloud computing but for precision fermentation. You can do the very small scale in your lab and when you go up one notch to bigger fermenters, you will be able to lease and not buy. 

J: This is interesting because food tech is a very capital intensive industry compared to software.

A: Software used to be capital intensive, because you used to have to own your own servers,  until AWS and Amazon invented web services. And suddenly, it didn’t have to be so capital intensive because you can have everything on the cloud. 10-15 years ago, it wasn’t like that. This is now also changing in food tech.

J:Ultimately, the goal of food tech is to change the way people eat which requires a big behavioral change, even if the technology is there. How would you say the consumers here in Israel have been reacting to things like cultivated meat? 

A: I can’t really say because no cultivated meat product has been launched in Israel yet. We’re hoping the first ones will be launched by the end of this year. I can tell you that Israel is very fast to adopt new trends and technologies and it’s very plant based. I expect those new technologies to be very well accepted. Although the market is small, it’s gonna be a very good test market for every new product. We have a lot of chefs that are extremely interested in what’s happening in food tech because they want to incorporate the new technologies into their menus. It wasn’t like that, three-four years ago but now the culinary world and the food tech worlds are getting closer together.

J: Cultivated seafood was one of the theses the Kitchen had that resulted in Wandafish and Forsea. Clean packaging and reduced sugar have also been themes among the Kitchen’s portfolio. My final question is, as you’re thinking about the trends and new theses to follow, what technology are you hoping to see?

A: One of the main things we are hoping to find is technologies that will enable sophisticated technologies like precision fermentation and cell cultivation to produce products that will be affordable. Because today those technologies are expensive and they produce expensive products. Cultivated steak will probably be more expensive than a regular store-bought animal based one because the meat industry is good at creating affordable products at mass scale. It’s very difficult to compete. The companies that are creating cultivated meat are very close to market but they have premium prices. So we’re looking for the technologies to enable them to reduce costs, to reduce price, to be more efficient, and to bring the gospel to the people. 

Edited for clarity and length

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.

Next Up In Israeli Foodtech: Pesticides, Healthier Fruit Juice

As foodtech innovation goes, Israeli startup hub The Kitchen definitely has an eye for the “hot button” issues of in the food world, whether it’s sustainability, accessibility, better production, or health. It’s already invested in Meat the Future, who wants to find a better way to provide meat products to the world, and Amai Proteins, who uses biotech to create more environmentally friendly taste proteins.

The hub’s latest two investments, which were just announced, continue that trend, with projects that address possibly two of the most hotly discussed topics of the day: pesticides and sugar.

Inspecto has developed a portable kit that can be used for early detection of pesticides and other contaminants in food. The company claims its product will, once it hits the market, provide a much more affordable way to detect such things. Users operate a portable scanner to detect pesticides or contaminants, then analyze the results, which they get in real time. There’s no sending samples to a lab or getting other third parties involved.

Inspecto also wants to make the kit available up and down the food supply chain. Farmers would be able to measure the amount of pesticide residue on crops and ensure the levels adhere to regulations. Supermarkets could use the device to check for contaminated products before they hit the shelves. There’s even the possibility of using it at border patrol, so that food with contaminants or high pesticide levels can’t enter the country.

Inspecto is currently testing two pilot cases of its product: one in partnership with Strauss’s coffee program, and one with Shinho, a Chinese condiment company. The company wants to have kits available to customers within six to 12 months.

Meanwhile, Better Juice is tackling the ongoing concerns about sugar in fruit juice—a topic debated by everyone from medical practitioners to news organizations and soccer moms.

The startup is using sugar-reduction technology to create an enzymatic process that joins the sugar molecules in fruit juice, so that they form one long chain of fibers or carbohydrates. The result is a low-sugar, high-fiber juice, which basically solves the two biggest gripes about fruit juice out there right now.

The technology is currently in beta form, and Better Juice has used it on apple and orange juice. No word yet on the juice’s actual tastes or when it might become a more widely available process, but the mere fact that it’s possible to get low-sugar, high-fiber juice is an encouraging thought.

Outside of those two companies, Israel in general is becoming an important center for food technology, with some even claiming it’s in “the top five of countries in terms of food-tech innovation.” Late last year, researchers as the Hebrew University of Jerusalem introduced a patent-pending process for 3D-printing entire meals using nanocellulose. Just this month, SuperMeat raised $3 million in funding for its lab-made chicken. And The Kitchen has other investments in tech companies that address everything from food safety to finding alternative protein in fruit fly larvae.

“I am particularly interested to look at how agricultural and food ventures will transition to the digital world, adopting technologies such as machine learning and blockchain as the entire food industry becomes more advanced,” one Israeli VC recently noted. Given all these new developments, there should be plenty to watch over the next 12 months.