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Winning from the start: three takeaways from successful, food-focused start-ups

October 26, 2022

In my work with The Good Food Institute, I have the incredible privilege of meeting passionate founders, entrepreneurs and teams who are quite literally changing the world. A colleague recently referred to advancing alternative proteins as bending the arc of history. In most other industries that might be hyperbolic, but in ours it’s entirely accurate. With food and agriculture responsible for a third of global emissions – and a full 20% of emissions attributable to animal agriculture alone – meeting global climate targets will be impossible without a shift to alternative proteins. Failure is not an option, but success is not inevitable.

How, then, do we ensure a new future of food amid a volatile macroeconomic landscape, complex technological requirements, regulatory hurdles, and a host of other challenges? Part of the solution lies with the exciting start-ups that are pouring into the sector. Some of the most promising of these emerging companies share fundamentals that propel their success. What do they understand that other start-ups miss?

First and foremost, they never lose sight of the fact that they are making food. Regardless of the scientific and technological breakthroughs behind many alternative proteins, the end-product has to be delicious and affordable. Start-ups focused on the triumph of their technology too often prematurely commercialize products without optimizing for taste or price. It’s critical to employ rigorous validation of both long before going to market. Being first or early is irrelevant if the product fails in retail or food-service. Food start-ups should also be cautious about whether to position themselves as technology companies when fundraising. Although technology is the core offering of some B2B alternative protein companies, most D2C companies rely on the success of the end-product, which is food. The food and beverage industry is far removed from Silicon Valley when it comes to margin, path to market and time to ROI.

Partnerships and collaborations will pave the way for a world in which alternative proteins are no longer alternative

Next, the best start-ups embrace transparency on several levels. Iron-clad IP de-risks investment and provides competitive protection, but it can also stymie industry progress as a whole. Savvy companies could navigate this conundrum by figuring out how to share some of their enabling technologies through licensing or other avenues. The alternative proteins industry is nascent, and the potential market is massive. There is more than enough room for many companies at the table. Successful start-ups also recognize the need for transparency with consumers. As an industry, alternative proteins will benefit from consistent and effective communication of novel or misunderstood approaches to food production. Finally, the most well-positioned start-ups present obtainable financial forecasts to investors. Inflated valuations and projections may lead to short-term wins but lay the foundation for long-term negative outcomes, including the necessity of future down rounds.

The third fundamental is operating with a spirit of field-wide collaboration. Pitting one food production technique against another, criticizing a real or perceived competitor, or celebrating a rival’s challenges serve only to jeopardize progress to shared critical objectives. Those stale business tropes should be retired in favor of fostering laser-like focus on advancing alternative proteins as a market-based solution for addressing some of the biggest global challenges of our time. We can recognize the momentous task ahead and the need for multiple solutions. For instance, as the industry matures, we will see increasing opportunities to combine technologies for the purpose of achieving enhanced taste and texture. Fats enabled through precision fermentation will improve the flavor profile of cultivated and plant-based meat. Hybrids of conventional meat and alternative proteins could preserve the sensory experience omnivores seek while reducing the amount of conventional meat consumed. Partnerships and collaborations will pave the way for a world in which alternative proteins are no longer alternative.

Overcoming hurdles will involve the participation of large incumbents, policy-makers, governments, and investors. It will require tremendous infrastructure and R&D. Start-ups, however, will also play a critical role by bringing desirable new products into the marketplace. Those who embrace taste and price, transparency, and collaboration will have a distinct advantage.

Laine Clark is the Innovation & Entrepreneurship Manager at The Good Food Institute, the international nonprofit working to shift the global food system to options that are better for the planet, people, and animals. This article was republished from the October/November 2022 edition of Protein Production Technology International, the industry's leading resource for alternative proteins. To subscribe to read future editions hot off the digital press, please click here

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