Coronavirus Challenges & Opportunities in the F&A Industry
Part One: The FoodBytes! startup community weighs in
The Coronavirus pandemic is posing challenges across the global food and agriculture supply chain, but it’s also inspiring creativity and resiliency. In this three part series, FoodBytes! connects with the various members of our community – startups, investors and corporates – to weigh in on their experiences so far. We hope sharing these perspectives will help the food industry learn from and strengthen each other during this uncertain time.We know this is a particularly volatile time for the startups in our community. We reached out to some of the inspiring voices in our network to dive into these challenges and ideas they’re implementing in the trenches.
We’ve also compiled a list of small food and ag business resources HERE that we’re updating continuously. If you’d like to dive deeper into the Coronavirus-related challenges facing the industry, don’t miss our RaboResearch team’s timely reports.
Startup challenges: from supply chain disruptions to paused investor conversations
Dan Kurzrock of ReGrained explained that event cancellations are a major problem at this stage, as the company relies heavily on in-store and at-event product demos to drive sales. ReGrained was planning to debut their latest upcycled puffs made from spent beer brewing grain with compostable packaging at Expo West, which was canceled earlier this month due to Coronavirus concerns. This product launch was a year in the making and strategically set to debut at Expo. Additionally, ReGrained is in the middle of closing financing, which is now challenged with team bandwidth constraints like working from home and parenting kids no longer at school, coupled with the market hitting record lows. Other startups have reached out to us saying soft-circled seed investors have now hit the pause button on their investments, so startups have to go back to square one with investor outreach.
Access to production facilities is also limited for some entrepreneurs, including Kaitlin Mogentale from Pulp Pantry. Her upcycled juice pulp snack startup relies on conducting tastings: “Even with significant R&D still underway, we can’t go into our facility to conduct tastings, Kaitlin told us. “This is nerve-racking as timelines and deadlines for orders still need to be met.” For some small CPG brands, retail channels may be booming but foodservice channels like schools, tech campuses and airports have all but dried out. They’re scrambling to bump up online sales by making inroads with major direct-to-consumer retailers to get their products listed on their sites.
B2B startups in the food tech and agtech space are more focused on pending supply chain disruptions. They expressed concern around the impact if lab facilities had to shut down in which critical tests were taking place to hit planned milestones. “From factories shutting down to transports being delayed, everything is conspiring against production,” Marc Andre-Roberge of Nectar told us. His startup makes sensors for commercial beekeepers to improve hive health. Marc thinks both farming supplies and machinery will be significantly impacted, but he noted that accessing qualified temporary workers is likely the greatest challenge for farms right now, saying it’s his clients’ top priority. In terms of Nectar’s business development, discussions with new partners have cooled, as most decision-makers are stalled due to the uncertainty of the crisis.
Startup Opportunities: nimble new processes and proactive communication
Agility, creativity and communication are key as startups adjust to this new reality. Dan and the ReGrained team sprung into action after missing their launch at Expo West. They set up online buyer meetings for the retailers and started a limited presale offering with free shipping to lower barriers to trial for consumers. Marc from Nectar tells a similar story of proactivity. His team has been reaching out to existing clients to better assess what is happening in the fields where their technology is deployed, hoping to anticipate the challenges ahead. And when it comes to their investors, they aren’t shying away about having tough conversations. The Nectar team is keeping them updated with the progress they’re making in assessing the impact of the Coronavirus and which scenarios might play out as a result.
Over at Pulp Pantry, Kaitlin has found new, creative ways to do sample hand-offs with plant managers and is spending her time exploring new business partners and online sales channels. She also noted new opportunities, like low Facebook advertising rates, which help brands continue to spread the word digitally. Echoing this creativity prevails attitude is FoodBytes! mentor, Elliot Begoun from The Intertwine Group. He simply reminds entrepreneurs to do what they do best. “While the world hits pause, smart entrepreneurs hit fast-forward,” he said. There are always opportunities amidst the chaos of disruption and the best response is creative action. Elliot underscores the proactive communication mantra our startups all pointed to. He suggests reaching out to buyers, investors and influencers that entrepreneurs were hoping to meet in person and sending them care packages, given many in the industry are working from home.
We will be updating this post to share the evolving views from our startup community. Next, we’ll be sharing perspectives from our close circle of investors, and the challenges and solutions they foresee If you want to share your own thoughts or offer support to the innovators below, please reach out to us at firstname.lastname@example.org.
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Our community has been truly inspirational in this uncertain time. Startups, corporates and investors have a lot to say about how this pandemic is affecting their businesses and how they’re proactively working to mitigate impact. We’ll be sharing some of their stories & perspectives in the coming days. If you want to learn more, offer support to the innovators we highlight or share your own perspective, please comment or DM us.