What is a Food Incubator Program?

Entrepreneurs often have great business ideas but they are unsure how to execute these. Some have actual plans, but lack the resources, such as physical facilities and financing, to get the business up and running. Other entrepreneurs may lack the confidence to face perceived challenges, particularly if they are new to the industry in which they wish to carve a niche. This is where business incubator programs come in.

An incubator program refers to a wide range of resources and services provided to help newly established businesses become viable and self-sustaining enterprises. Incubators generally groom a startup from the idea stage up to until the seed stage and has a duration of one year to one-and-half years.

Businesses can benefit from joining an incubator program with access to services that can help them jumpstart their venture, including, among others:

  1. Seed funding and angel investors

  2. Expert mentoring

  3. Networking

  4. Technical assistance

  5. Marketing assistance

  6. Co-working space

  7. Intellectual property management

While different business incubators have different goals and processes, they all share the goal of assisting businesses that are in their early stages—thus are still vulnerable—to operating more independently with greater success. 

An incubator program provides funding support for a new business in the form of a grant, as opposed to accelerator programs, which invest in a more established company, thus receiving equity in the future.

Food Business Incubator

A food business incubator follows the same principles and goals as any other business incubator program, but it focuses on the food industry and new food companies. Food business incubators may also cater to agriculture-based enterprises that produce food.

Over 75 incubators or accelerators for the food industry have been established in the US within the last decade, according to consultants A.T. Kearney. This figure includes incubator programs for food and beverage run by academic institutions and other non-corporate organizations.

A food business incubator can help food entrepreneurs in a variety of ways, including providing access to shared kitchens or food processing facilities, as well as expert food business mentor advice.  Food incubators also provide services such as:

  1. Entrepreneur mentorship and training

  2. Sales and distribution support

  3. Agricultural production support

  4. Product development assistance

With the advent of market digitization, the internet of things, artificial intelligence, and machine learning, incubator programs have likewise ventured into emerging food tech initiatives. These startups aim to provide IT-based solutions to food and agriculture challenges, as well as to modernize and make these sectors more efficient, reliable and sustainable, particularly in light of the growing global issues of food insecurity, climate change, and unsustainable food production and consumption.

Food and Beverage Incubators

Along with the emergence of diverse food and beverage consumption preferences comes a plethora of market opportunities for food and beverage companies. However, business ventures in this sector, particularly startups, face a number of challenges, including funding and being able to compete vis-à-vis new trends in food business marketing, among other factors.

Food and beverage incubators guide entrepreneurs in addressing issues associated with starting a food and beverage business. This includes providing additional capital as well as coaching on how to keep pace with the trends, such as using the best marketing strategy for food business endeavors.

The digitization of food and beverage storefronts, like that of other industries, has necessitated a shift from offline to online marketing. Unfortunately, some brands are unable to keep up with the rapid changes in marketing platforms. Incubators help startup food and beverage businesses shine in a competitive marketplace full of formidable competitors, and support to digital marketing for food businesses is one of the services offered by food and beverage incubators. 

Even before guiding food and beverage startups venture into digital marketing and harness its benefits, incubators also assist in the development of product strategy for food businesses, outlining how the products themselves stand out and prosper through a clearly defined strategic vision and plan for growth and innovation.

CPG Incubators

A specific area of business incubation for the food industry is consumer packaged goods (CPGs), which are items that consumers use on a daily basis and are routinely replaced or replenished. These goods, also known as fast-moving consumer products, include foods and beverages that are meant to be consumed quickly, such as packaged snacks, bottled water, pre-mixed drinks, and frozen meals.

In the past, the CPG industry was dominated by large corporations. But in recent years, the CPG playing field has become increasingly more competitive yet inclusive, with smaller companies joining the market—and major CPG companies actually beginning to nurture and mentor startups through food incubator or food accelerator programs.

CPG incubators, including large CPG companies themselves, help emerging CPG brands be known in the mainstream and succeed amidst larger and more popular household names. These food incubators help new CPG players connect with investors, decision-makers, as well as successful ventures in the same industry.

In a CPG food and beverage incubator process, the expertise, authority, and liquidity of CPG big players, as well as other industry stakeholders, are matched with the ideas, innovative solutions, culture, and hunger for growth of new and smaller CPG actors.

For example, if a large CPG company accepts a startup into its food startup incubator program, the "big brother" will train and mentor the startup leaders and may even offer seed money to the new venture. The larger company can then immerse itself in the startup's food business strategy and learn from it. As a result, the process is beneficial to both parties.

Post-Food Startup Incubators

A food incubator program can assist a new business in navigating the increasingly complex and competitive food and beverage industry. Incubators, which are present in many industries, are generally a great way for startups to establish their businesses and provide the push needed to turn a paper idea into a real business and move it forward.

So, what happens after a food and beverage company takes advantage of the resources and services of a food startup incubator program? Assuming that the incubator was successful in helping the startup establish itself, the road ahead would still remain to be long and difficult. While the business leader(s) may have gained valuable knowledge and skills while participating in the food incubator program, additional external assistance may still be required.

If a food entrepreneur is determined to further expand their business, they would be open to take on a continuing challenge—and elevate their learning-and-doing journey. The next step for a food business that has been established through incubation could be to engage in a food and beverage accelerator program, a higher-level platform that can help further propel the company to new heights.