Family businesses are known for being far-seeing, relatively risk averse, and driven by long standing values and relationships more than by the whims or trends of the moment. On the surface, this seems pretty at odds with the startup world where relationships and values tend to be new and evolve quickly, risk tolerance is high, and durability is measured in capital raises and quarterly milestones, not decades or centuries.
But last week’s podcast guest highlights that family businesses can be especially well-suited to pursuing innovation, exploring and adopting tech, and navigating tumultuous economic environments.
Standard Meat were early entrants in the meal kit space, ultimately becoming the largest protein supplier to meal kit companies in the US. While at first they were skeptical it was another fad, after digging in, they realized it was a high growth area where their custom packing approach could open up a new market.
Over time, entirely new revenue streams emerged from entering this space. Ben tells the story of being asked by a customer if Standard Meat could create the ice packs used to refrigerate boxes. In an obvious way, this was beyond the scope of Standard’s core competencies; but at the same time, it fit within their broader mission of meeting customer needs all along the meat packing and shipping route.
As Ben sussed out the opportunity, he found there were tons of inefficiencies in the ice business. Solving them led him to stand up a new (ice) packing business that not only brought in revenue, but also made their meat value chain more efficient and helped deepen a relationship with a key customer group.
Managing the tradeoff between focus and experimentation is a fine art, but when it comes to unlocking innovation, curiosity is often more rewarding than strict discipline around current competencies.
Ashli explains that during early COVID, Standard Meat found themselves with excess capacity as many of their food service and retail customers shut down. At the same time, their meal kit customers could not keep up with demand.
Standard Meat saw an opportunity to help their customers by turning their dock into a temporary fulfillment center and packing boxes.
“It obviously used our protein, but it had a bunch of other ingredients going to the box, too…. And that was a pretty fun, trust building, partner building experience. It was also really special to our employees to make sure that we were able to not let go of anybody.”
Sometimes challenging times present surprising opportunities, but only for those nimble - and humble - enough to act.
Ben and Ashli both started their careers outside the meat industry, bringing back outside skills and new perspectives when they returned. Ben cut his teeth in finance at Goldman Sachs, and Ashli worked in communications in luxury fashion.
In addition to more rigor and sophistication, Ben’s finance skills gave Standard Meat the confidence to be more transparent with their team about company financials, which in turn had benefits for innovation.
“It's been great for us in terms of just coming together…Before that, people would've maybe been intimidated by the financial side of the business, [but now they] actually have an opinion.”
Ashli’s time in fashion taught her to see how trends evolve from high-end influencers to the mass market. Applying these insights to food changed how Standard Meat looks at and talks about meat with their team and customers.
“Prior to that, I don't think we ever really looked at food, or at least our meat, as a product we could present to a customer in a way that they can see it on their menu. It was more, ‘let me just show you a good steak and here's a plastic fork and let's cut it and just try it together.’
Now, we're able to come in and present the product in a way that you can see it on your menu. So it's a steak with all the sides and a full build and maybe a glaze and a topical. It's just brought the level of collaboration and discussion up to a whole ‘nother level between the in-house chefs and our meat scientists and their commercialization team.”
As climate and economic pressures mount across agri-food, companies of all sizes will increasingly be looking to innovation - something that’s easy to say, but hard to do.
While there’s plenty to learn from the startup world, let’s not forget that innovation insights may equally be hiding in the family businesses along the value chain.