Earlier this month I attended the second annual FoodFunded event, hosted by The Mixing Bowl Hub. It was an awesome event (see my summary here) and I want to share a few things I personally came away with.

1. Technology can be a black box for food entrepreneurs. Understanding the_purpose_ behind a technology investment is critical, especially for entrepreneurs who need to be sure they’re spending limited resources in the most productive way. I’ll illustrate the point with a specific example from the conference. Despite the huge growth in e-commerce, most CPG food products are sold through the channel (i.e., to retailers or distributors), and only a small percent of business happens via direct online sales (something like 10%, according to the panelists). What does that mean for a food entrepreneur? First, it means that their go-to-market strategy is going to be focused on a particular channel or channel partner (for example, getting into Whole Foods). Second, it means that investing in a website that has a robust sales pathway is probably a waste of resources. You still want to provide website visitors with a way to order your product, but you probably want to focus your website content on telling your story, providing in-depth product information, or telling your potential customers where they can pick up your product during their usual grocery shopping trip. Having a website, social media presence, and technologies to help streamline key business processes such as inventory management, accounting, and payroll are critical. More tools are needed to help food entrepreneurs understand what’s out there and what they need.
2. When pitching, delivery > content. There’s no doubt that what you say during a pitch or showcase presentation is critical- you have to tell people _what problem_you’re trying to solve and why it’s important, and explain your _value proposition_and why you are uniquely positioned to deliver it. But it’s equally, if not more, important to capture you audience’s attention. If they’re not listening, it doesn’t much matter what you’re saying. Yet I still didn’t see consistent mastery of key presentation skills, like: knowing your audience, telling engaging stories, leveraging impactful visuals (especially for food products), and even basic public speaking skills like body language and intonation.
3. Certifications are a (necessary) MESS. USDA Organic, Fair Trade, Grass-fed, Non-GMO Project Verified…the list goes on and the number of certifications is exploding. Certifications are necessary to ensure safety, quality and consistency, especially for long supply chains, products with many ingredients, and company’s managing 100’s or 1000’s of SKUs. But certifications can also create confusion for consumers (just try buying a carton of eggs). And increasing the amount of certifications decreases the value of any one, which, in the worst case, can enable big companies with big marketing budgets to create new labels that look great, but mean nothing. Confusion and frustration around certifications is not new, but neither does it seem to be decreasing.
4. Alternative funding models and corporate forms are emerging, but are not well understood. Traditional funding models may not work for food and ag startups that aren’t as “fast, cheap, or simple” as investors need. FoodFunded hosted a number of Family Office investors (e.g., Investor Panelist Judge Esther Park of Cienega Capital), and panelists, attendees, and sponsors discussed the importance of debt financing, PRIs, and impact-oriented capital. Similarly, entrepreneurs are increasingly seeking aligned capital. Selecting a corporate form that helps attract and secure align capital is a hot topic- the “choosing the right type of financing” and “pitch to close: legal and business affair needs” panels were well-attended. But, the range of questions highlighted the huge differences in how familiar people are with these options. More education and resources are necessary.
5. Health and Wellness continues to drive innovation. This is not surprising or new, but I loved seeing the level of innovation around, and enthusiasm for, healthy products and sustainable value chains. That doesn’t mean I’m not skeptical about the outcomes and impacts many of these ventures will ultimately have, but I can’t help but feel optimistic.