Following a successful inaugural event in San Francisco last year, Rabobank is expanding FoodBytes! to the East Coast by hosting a networking and selective showcase event March 3 in Brooklyn, NY. It also will host events in San Francisco June 6 and Boulder, Colo., in October.
“This event is about the entrepreneurs – the people who are taking risks and developing ideas. They are the stars, and the rest of us are there to listen to them and try to help them,” said Manuel Gonzalez, head western region, Rabobank North America Wholesale.
With that in mind, he said, the event will not focus on famous speakers or companies that already made it big. Rather, it will give the stage to 10 pre-selected entrepreneurs or startups in food, beverage and agriculture, which will have five minutes to pitch their business to investors and media interested in the food and beverage space. An additional “10 or so” companies will have 60-seconds to tell their story and capture investors.
Rabobank and its event partners – SF New Tech and Food & Tech Connect – will select the presenting companies from an expected pool of hundreds of applicants. They will look for companies across a broad spectrum in food and agriculture, such as beverage companies, packaged food firms, ag tech specialists or entrepreneurs focused on the different sectors in which Rabobank helps invest, including dairy, protein and grain.
What it takes to win
The selection process is “a bit of an art more than anything,” Gonzalez said. “We do not have point by point criteria because we want to be open and not constrained to a set of rules. We really want to see what is innovative.”
That said, the entrepreneurs and companies selected must have a clear goal to solve a problem or fill a consumer need, he added.
Selected companies also need a clear purpose beyond their product – a way for consumers to relate to the brand beyond purchasing goods, advises Nikhil Arora, co-founder of Back to the Roots and one of five FoodBytes! People’s Choice Award winners and runners-up from the first competition held last year.
“Focus a lot on your application and presentation on your purpose – more than the product,” he advised. “We see a lot of products in this space … but fewer companies with a purpose … and that is what people are looking for.”
Reflecting on his experience during the last FoodBytes! competition, Arora said the competition and networking event “was a cool experience” because not only did it bring investors and start-ups in need of backers together, but it had an inspiring energy that hinted at the food and beverage industry’s potential for change.
“In San Francisco,” where the first FoodBytes! was held last year, “they brought together, in some ways, the most cutting-edge, passionate folks in this space. And the energy felt like where this space will be in a couple of years.”
Banking on change
This passion, along with shifting consumer preferences for healthier, more sustainable food, and a lower barrier of entry for startups to capture consumers’ attention via the Internet is creating a sizable investment opportunity, Gonzalez said.
Rabobank cited sources that estimate food and beverage startups attracted $1.1 billion in venture capital globally in the first half of 2014. In 2013, it saw $1.59 billion in venture funds – a 39% increase from $1.14 billion in 2012.
This upward trend likely will continue as demand for food is expected to climb 60% by 2050, it added.
Investors can take advantage of this by focusing on companies with progressive research and development and business models, Gonzalez said.
However, he added, investors in food and beverage should not expect the same explosive growth that can happen with information, technology and apps.
“Some investors might think this space is like tech, but it isn’t. And those people will exit at some point,” likely when they realize growth is slower due to increased competition and logistical challenges that face physical objects – including securing supply, production and a place on stores shelves, Gonzalez said.
“But,” he added, “food is a very good, sustainable investment for those people who have the patience.”
He also advised that investors can minimize the general risk that comes with backing a startup by looking for those that know their business well, understand their costs, know how to distribute products, what they are going after and what they need to get it.
“These are all elements of good, long-term investment,” and qualities FoodBytes! looks for in applicants, he added.
Entrepreneurs interested in applying for FoodBytes! can do so HERE.