The COVID-19 pandemic has brought to light many realities that surround our existence and survival, including the importance of food. During the onslaught of the disease, restrictions on the movement of people and goods have resulted in the shortage of many basic commodities, and we realized that we can give up other supplies but not food. It was proven that whatever the circumstances, the demand for food across geographic locations and economic conditions will always remain relatively constant.
The pandemic has also exposed the fragility of our food system and emphasized the need to accelerate innovation in order to make the system more resilient and sustainable. Prior to COVID-19, the desire for sustainability was already on the rise as people became more conscious of the impact of food production and consumption on the environment and society. The crisis has only made people more interested and motivated to take action, which has opened up new business opportunities in the food and beverage industry and even the agribusiness sector.
Startups, particularly those with younger and more creative founders, have the greatest desire for success and, as a result, the strongest drive for innovation. Among many obstacles, one problem that young food companies face, though, is that it can be challenging to find investors for food businesses who can help them strengthen their enterprise as well as support any new ideas that they incorporate into their business model.
Investors for Food Business
A food and beverage company in its early stages may require additional capital, particularly if it wishes to introduce an innovation that was not part of the original business plan, such as optimizing manufacturing capacity or simplifying product formulation (e.g., in response to lessons learned or arising needs during the pandemic). This is where investors can be of assistance, especially those whose interests and portfolios are centered on the development of food businesses. These people will not only put money into the business, but they can also act as food business mentors because they themselves are experts and are most likely able to understand a food business founder’s vision.
On the other hand, investors are also looking for prospective food and agribusiness enterprises because these companies have historically produced higher total shareholder returns than many other business areas, making food startups a sensible investment opportunity. Startups that are addressing food security and food supply chain issues in novel ways are attracting investor interest.
On the other hand, investors are also looking for prospective food and agribusiness enterprises because these companies have historically produced higher total shareholder returns than many other business areas, making food startups a sensible investment opportunity. Startups that are addressing food security and food supply chain issues in novel ways are attracting investor interest.
Many investors who invest in food companies are particularly interested in how innovations affect consumers and the environment. Investors in meat, egg, and dairy alternatives, for example, are likely interested in enhancing the food system's sustainability. The goal of ag tech investors, meanwhile, is to make farming more efficient and profitable by facilitating the production of large and healthy crop yields. Vertical farm venture capitalists are, on the other hand, likely aiming to improve crop freshness and reduce environmental pollution caused by the numerous supply chain links from the farm to the consumer.
Consumer product investors would find it attractive to invest in startups engaged in the production and distribution of alternative protein sources, considering that plant-based meat alternatives have become more popular during the shortage of meat and meat products because of the pandemic. According to UBS, the demand for plant-based meat products has increased as a result of the COVID-19 crisis, with consumers becoming more conscious of their health and the environmental impact of their dietary choices. It is anticipated that the market for plant-based protein alternatives will grow at a 28 percent annual rate over the next decade, reaching $85 billion by 2030, as part of a more significant shift in consumer preferences that will provide long-term opportunities for investors, such as in vegan business funding. Along with a rise in demand for plant-based diets, which are thought to be healthier for both people and the planet, more money is likely to be spent on getting alternative protein products to market.
In short, while food entrepreneurs are looking for people who can help them get their businesses or new ideas off the ground, investors are also looking for potential investment opportunities. It is simply a matter of searching for and matching the needs and priorities of the entrepreneur and the investor.
How do I Find Investors for my Business?
A food business accelerator can help you connect with angel investors while also providing other valuable resources for your startup, such as advanced training and high-level mentorship. An angel investor injects money into your company through the food startup accelerator program to help stabilize your business. Normally, their financing provisions are more favorable than those offered by other traditional funders. Many of these funders invest not only in the business itself but also in the entrepreneur who founded the startup.
A growing number of food and beverage accelerators are emerging in response to the growing need for business innovation in this industry, besides food being a constant human necessity and therefore an evergreen profitable business venture. A quick Google search would yield many results on these business accelerator companies that can help entrepreneurs access investors and other useful support for food business growth.
One of these companies is FoodFutureCo, a scale-up accelerator for small, yet established businesses that provide unique products and solutions across the food system. FFC’s focus areas include consumer products, local food, plant-based food, sustainable seafood, ag tech, food tech, and food waste. As a food accelerator, FFC has already engaged 304 food business investors, supporting 35 companies in its portfolio.
Aside from linking your company to potential investors, FFC’s accelerator program can offer your business assistance across critical areas, including:
Business Strategy and Vision
Branding and Marketing
Growth and Scale
Buyer Meetings
Operations and Logistics
Culture and Team
Governance and Legal
Indeed, the pandemic has had a significant impact on the food and beverage landscape. It has become a sort of reset button for food companies, as well as a test of how creative and innovative food entrepreneurs can be. Following COVID, innovation will move to a completely new ecosystem, influencing how food is grown, processed, and distributed to consumers. Food entrepreneurs must become more creative in order to navigate the industry's new normal and find their perfect investors, who is likewise on the lookout for businesses that do exceptional work, thus are profitable.
A food accelerator, such as the FFC, can bridge the gap between entrepreneurs and investors looking for their "perfect match" thanks to its extensive network and connections. In addition to obtaining funding, entrepreneurs can benefit from the added value of participating in comprehensive cohort programs provided by accelerator companies.
