Recap: Upstate Capital’s 3rd Annual Future of Food Conference
By Caitlin E. Moriarty
Upstate Capital, once again, provided the opportunity for a cross-sectional group of founders, investors, farmers, academics, and enthusiasts to have an important conversation around innovation in the food, beverage, and agriculture industry.
The conference was held virtually as a result of COVID 19, but was able to deliver just as much value to its attendees as the live event. Right from the platform you were not only able to stream the event live, but you could learn more about each speaker and sponsor, visit the startup showcase, view the event schedule, read short bios on the other attendees and reserve time with them for the networking portion of the event, and even play back the event stream afterwards.
The event kicked off with a conversation around corporate venture capital and mergers and acquisition (M&A) strategy with Constellation Brands. For those companies hoping to be acquired in the future, there were some great takeaways that included the importance of having your trademark, IP protections, and cap tables in order, and the weight of local brand equity; or of winning the local market first to demonstrate deep penetration instead of casting a wide, shallow net in the broader market.
The Startup Showcase featured 6 great companies from NYC to Buffalo, with 4 additional startups featured in the speaker lineup. Of the 10 startups featured throughout the day, more than half deliver products and services focused on personal and environmental health. For example, Gian Corporation introduced us to their HealthCart™ product helping consumers, grocery retailers, health care providers, and self-insured companies by improving the grocery shopping experience to optimize health. Using HealthCart™, shoppers receive a health score based on what is in their cart and can get recommendations for healthier product alternatives and communicate data to their healthcare providers, ultimately lowering health care costs and improving health outcomes.
The four startups that also served as speakers for the event were Leep Foods, Foodnerd, Mr. Bing, and AgVoice. Leep Foods talked about their continued growth and ability to secure key partnerships in order to sell their “best mushrooms in the world” including a recent strategic partnership with 29 Design Studio to refine and promote the Leep Foods brand, and a new product development partnership with a local company that hasn’t formally been announced yet. We heard from FoodNerd about the passion for growing the company in their Buffalo NY hometown and how the idea was born from witnessing impacts of chronic disease and examining how the customer packaged goods industry creates challenges for Americans trying – and often failing – to stay healthy. Foodnerd is using food science and processing innovation to create foods in their R&D food lab that provide the opportunity for individuals to intentionally nourish and maintain awareness of what is going into their bodies. Their wackiest healthy creation to date would be their healthy version of Doritos. AgVoice, the world’s first voice to data capture startup, is currently based in Atlanta, GA but has plans to move to Upstate New York in the next 2-3 months after receiving an impressive amount of regional support from Empire State Development, Cornell AgriTech, and others, and recognizing the overwhelming expertise in food, beverage, and agriculture that exists in New York State.
Finally, Mr. Bing shared a story of perseverance through failure to ultimately create a successful food-based businesses. The original business was born to bring a Beijing breakfast staple – jianbing or bing – first to the Hong Kong market. In Hong Kong, while the Mr. Bing brand and story was strong, the high commercial real estate prices and the market demand for low food prices – especially for a street food staple – led to closing the Hong Kong locations after 2 years. In the process, a lot of money was lost and facing investors, some of which were family and friends, was challenging and humbling. He remained encouraged by the demand for authentic street food, and decided to restart Mr. Bing selling jianbing in New York about 5 years ago and raised about $3M in capital to do so. In 2016, Mr. Bing won an award for Best New Street Food and was had grown into 6 restaurant locations. However, once again and accelerated by the pandemic, Mr. Bing was forced to close in the US market this past Spring after failing to reach a level of profitability able to cover corporate overhead. Ultimately, Mr. Bing decided to change the business model and focus a consumer packaged good selling crispy chili paste, which a key ingredient in the jianbing dish. Their Mr. Bing Chili Crisp product is made without the MSG and preservatives of competitor brands, and is completely gluten free and vegan. The Mr. Bing story is a great example of the need to be resilient, agile, and still manage to maintain the enthusiasm to create and innovate. Another important message in the conversation was how entrepreneurs need to be able to mentally separate the failure of a business from the failure of themselves as individuals, and to have a strong support system to help get back up and try again.
Awareness of important trends is another key component of the event and included the acceleration of online and direct to consumer purchasing, and the fragility of the food supply chain as a result of the COVID 19 pandemic. Managing Director and Food and AgriBusiness Leader at Freed Maxick shares how the wholesale retail demand ratio went from 50/50 to 80/20 overnight as restaurants, food service, and schools shut down, and grocery stores struggled to keep shelves stocked. Manufacturers struggled to transition their production and logistics, and farmers had perishable products that then went to waste without the demand of restaurants and schools. As a silver lining of the pandemic, people who are now doing much more cooking at home and seeing limits on food available are now reflecting on where their food comes from and making additional efforts to shop locally and connect more directly with food producers. The Nourish NY program is a state initiative that helped to connect farms and food producers directly to consumers, and provided funding for food banks to buy surplus food products directly from NYS Farmers who lost their markets as a result of the pandemic. The crisis has created an unprecedented opportunity for farmers to access NYC markets and sell their perishable products, and for companies like Natural Upcycling. Natural Upcycling is New York State’s largest food waste recycling and composting company that coordinates the collection of food waste for composting or anaerobic digestion. In response to COVID 19, Natural Upcycling pivoted to focus on the oversupply of milk in NYS to be processed into thousands of gallons of milk that are being donated to local communities where an estimated 1 in 10 people have lost their jobs.
Another more positive message from our speakers was the overwhelming conclusion that from past to present and hopefully future, New York is THE food state. We heard about the great NYS distribution network available to our founders, the 550+ food manufacturers, and from NYS Brewers Association who shared how the craft brewing industry started right here New York (or what was previously New Amsterdam) in 1612. We also learned that New York has also the oldest known state brewing association in the country and how today it is home to 464 breweries. This is the 2nd most breweries in any state behind California, and two of those still operating existed pre-Prohibition; Genesee Brewing Company and the FX Matt Brewing Co. We also heard from Cornell’s Agritech who shared the many resources and services available to food, beverage, and agriculture tech startups in service to supporting and fortifying our food economy.
While the longer term impacts of COVID 19 are yet unknown, for now we were able to celebrate the strength, creativity, and agility of New York State’s food, beverage, and agriculture industries at Upstate Capital’s 3rd Annual Future of Food. We heard from 10 optimistic founders who continue to grow their companies and praise the resources available to them, and important trends and history to be aware of. The biggest indicator of what next year’s Future of Food event will look like depends heavily on how well local restaurants are able to recover, but given the knowledge, expertise, and enthusiasm of the speakers and audience, I have no doubt the 4th Annual Future of Food event will be just as engaging and informative, and hopefully equally optimistic.