Startup Spotlight: FENIK

Startup Spotlight: FENIK

Originally known as Evaptainers, Fenik started out as a student project at MIT. The team’s goal was to develop a low-cost method for preserving fruits and vegetables in remote areas. Five years and many prototypes later, Fenik recently wrapped up a successful Kickstarter campaign and launched production of its Yuma No-Ice Cooler.

While the new product will keep your camping supplies nice and cool, Fenik’s mission is to provide an inexpensive food-preservation solution for people in developing countries who lack access to electricity and refrigeration. We caught up with co-founder Spencer Taylor to hear Fenik’s latest news.

What’s your founding date?

September 2013.

How big is your team?

Five people.

What problem are you solving?

Last-mile food insecurity in arid developing nations.

What’s been the biggest surprise about running your business?

How few true-impact investors actually exist. They are often talked about, but you rarely meet one.

What was the big idea that got you started?

In an MIT class called Development Ventures, on the first day the professor said, “I want you to come up with a good or service that will change the lives of one billion people.”

Whom are you competing with?

Primitive evaporative coolers, such as the Zeer Pot, or draping wet cloth over food to help to preserve it.

The coolest food system innovation I’ve heard of is…

the sheer amount of innovation going on in the food space these days.

The scariest thing about today’s food system is…

the amount of waste that is endemic throughout the cold chain in both developed and developing markets.

What’s your latest big news?

We’re taking delivery of our first production units of the Yuma in January 2019.

Best advice you’ve received?

Hardware is hard.

What advice do you give to potential startup founders?

Start with a problem you have experienced, or one that you deeply understand through others. Assume nothing and validate your approach compulsively as you progress with your client base. Constant course corrections are not the product of inexperience; they are critical to success.

The Yuma No-Ice Cooler assembles easily and needs only water for evaporative cooling. The water is stored in the cooler’s walls and lowers the internal temperature 10-20 degrees — or more in drier environments.

Startup Spotlight: UAV-IQ

Startup Spotlight: UAV-IQ

Using military-developed technology, UAV-IQ combines high-tech field surveillance, environmental sensors and specialized software to help farmers keep a close eye on their crops. Pinpoint imagery allows farmers to focus on problem areas — locating issues such as water puddling or the beginning of a disease outbreak — and address them before they spread. Information sensed by the drone, including images that show detail down to individual leaves, can be transmitted to tablets or other tools used by farm staff anywhere in the field. We caught up with Andreas Neuman, co-founder and CEO of the Food+City Challenge Prize 2018 winner, to get its latest news.

What’s your founding date?

April 2016.

How big is your team?

Five people.

What problem are you solving?

Precision agriculture has proven to be highly effective for growers who practice it, but many growers perceive pricing or lack of training as barriers to adoption. Starting with drone-based remote sensing (which tells growers where their crops are healthy and where they’re stressed), UAV-IQ makes precision agriculture technology accessible and implementable within existing workflows to growers of any size and sophistication.

What’s been the biggest surprise about running your business?

That there are so many people genuinely interested in helping young companies get started.

What part of the food system are you in?

We focus on helping growers.

What was the big idea that got you started?

That one of the most fundamental problems for farmers — identifying where their crops are struggling and targeting their treatments precisely where they’re needed — was a solvable problem by using properly equipped to drones to rapidly scout fields.

Who are you competing with?

Inertia — sticking with an inefficient status quo — is our largest competitor. We also compete with satellites and other imagery providers.

The coolest food system innovation I’ve heard of is…

The use of hyperspectral sensors to identify specific disease, ripeness levels and other qualities while the crops are growing.

The scariest thing about today’s food system is…

Lack of diversity.

What’s your latest big news?

We are starting to provide a new service that utilizes drones to drop biological control agents (beneficial insects) to suppress pest populations in California.

What’s the best advice you’ve received?

If it’s not a “hell yes,” it’s a “no” when contemplating early employees and partners.

What advice do you give to potential startup founders?

Focus on building the best team before focusing on building the best product or service.

Startup Spotlight: Vinder

Startup Spotlight: Vinder

Founded in Port Townsend, Washington, by Sam Lillie, Vinder connects home veggie gardeners with folks who want to buy that fresh produce. The app brings together community members who are interested in ultra-local food and reducing food waste. It also boosts the local economy by opening up a revenue stream for green thumbs who connect with their neighbors to share their garden’s bounty. We recently reached out to the 2018 Food+City Challenge Prize contestant to find out how things are going at Vinder.

What’s your founding date?

January 21, 2018.

How big is your team?

Four full time.

What problem are you solving?

Food waste, cost and food insecurity.

What’s been the biggest surprise about running your business?

As much as I heard and read about it, the investor “run-around” has been my biggest surprise. Most professional investors I’ve had the privilege to speak with don’t give a solid “no.” They give advice and information, which is great because it helps hone the pitch and business plan/strategy. But it may not be the right type of advice that works for your company or be useful when approaching other investors. It ends up being a massive time/energy zap.

What part of the food system are you in?

Vinder is situated in the distribution of hyper-local produce — neighbor to neighbor. Yet, we do not own any delivery vehicles or own any inventory.

What was the big idea that got you started?

My community, Port Townsend, Washington, had a big problem accessing local organic produce for a reasonable price. Vinder was created not to be some massive, disruptive company, but to solve a problem in my community.

Whom are you competing with?

For convenience, we compete with HEB or Whole Foods. For freshness and locality, we compete with farmers’ markets. However, we see ourselves as a tool to help those small vendors reach more customers and increase sales direct-to-consumer.

The coolest food system innovation I’ve heard of is…

a company called Vinder that allows you to buy, sell or trade homegrown produce and neighbor-made goods directly from your neighbors. It’s free to sign up and free to sell or trade.

The scariest thing about today’s food system is…

we have normalized an absence of connection to our food system. We have no idea what is actually going into the soil in which our food is being grown (or what chemicals are being sprayed on them), who is growing it or where exactly it is being grown.

What’s your latest big news?

We are now a user-owned and -operated company. After successfully closing an Equity Crowdfunding round of more than $85,000 via WeFunder and receiving matching angel investments, Vinder issued preferred shares to users who are taking a stand against our current food system and are opting to create the neighbor-made food system of the future. Vinder is also now available for iOS and Android.

Best advice you’ve received?

In the words of entrepreneur and venture capitalist Paul Graham, “Focus on getting 100 people to love you rather than 1,000 people to kind of like you.”

What advice do you give to potential startup founders?

You don’t need a lot of money to start a company. First, come up with the lowest-budget minimum viable product and validate that the market needs your solution. Then build out manually, followed by tech. Let tech be a solution to make a process more efficient rather than the primary focus.

Startup Spotlight: Grit Grocery

Startup Spotlight: Grit Grocery

Grit Grocery has put a gourmet grocery into a food truck. Working directly with farmers and other local producers, Grit Grocery launched a fleet of grocery trucks to bring fresh ingredients and meal-kit bundles into urban areas — starting in Houston — underserved by traditional grocery options. We visited with cofounders Michael Powell and Dustin Windham to find out how they’re doing after competing in the Food+City Challenge Prize in 2018.

What’s your founding date?

Founded in 2015, pilot in 2016-2017, full-scale launch in April 2018.

How big is your team?

Five co-founders, plus a team of seven who drive trucks, sell food, work in the kitchen and organize the warehouse.

What problem are you solving?

Grit Grocery trucks bring fresh local food products to urban locations that don’t have food retailers or that have stores that carry mainly processed nonperishable food. We’ve designed a shopping experience that provides ideas and inspirations for healthy, easy, fresh, local-food meal solutions, tonight.

What’s been the biggest surprise about running your business?

A lot of local brands are producing and growing great food, but they don’t have access to customers through a retail outlet. We get a lot of these groups asking to get their products on the truck. We also hear from apartment complexes and developers requesting that Grit be at their residences. We already have a long waiting list of sites.

What part of the food system are you in?

Grit Grocery is a retail destination. We source directly from local farmers and ranchers as much as possible. As a retailer, we are at the front line of customer interaction.

What was the big idea that got you started?

Why is it so difficult to put together all of our meals over the course of the week with fresh, local, healthy food? There’s something wrong with food retail — and with the traditional grocery store model, in particular — that makes it hard for so many people to eat healthy, find local foods and put together meals. While we’ve seen a lot of innovation in how food is grown and produced, retail innovation has been lacking. New online options are promising but lack the flexibility to be a good fit for today’s urban life. This is where Grit Grocery started.

Whom are you competing with?

Traditional grocery stores and other big-box stores are obviously the main source of food retail. Organic and specialty grocers offer food more in line with what Grit offers, but they mainly carry nonlocal food and a lot of processed food. Farmer’s markets are not competitors, but they do overlap with Grit’s offerings — though their shopping experiences are not strategically designed for customers. Online grocers and meal-kit providers are similarly flexible when it comes to delivering food retail access, but they also come up short in responding to a customer’s daily food issues and needs.

The coolest food system innovation I’ve heard of is…

Coolbot. Build a poor man’s walk-in cooler.

The scariest thing about today’s food system is…

Nowadays, food is everywhere you look, from the airport to the hardware store, schools to the office. But most of it seems to be processed junk. Society is busier than ever and we have created more on-the-go occasions to eat food than can possibly be healthy, or that can accommodate real food solutions. The processed food industry likes that and profits enormously.

What’s your latest big news?

We released a Chatbot in October 2018 that allows people to use their smartphone to order a meal for pickup at the truck. They can also use the Chatbot to find the Grit Grocery truck and order a Grit-Together, a unique dinner party event for small groups.

Best advice you’ve received?

Be resilient. That’s what grit is all about. Keep trying new things, putting ideas into action and watching to see what works and what needs further improvement.

What advice do you give to potential startup founders?

Good strategy and technology are not enough. People and their food habits are kind of weird and hard to predict. You need to test and get in front of people, see how they really engage with your food or product in their daily lives.

Grocery Stores: The IoT of Food

Grocery Stores: The IoT of Food

Tired of comparisons to the much flashier internet, supermarkets are working hard to ditch their unsexy descriptor: big-box stores. These days you’ll find a Murray’s Cheese outpost in Kroger, a kombucha bar at Whole Foods and poke bowl counter at Albertsons. All these flashy foodie options are good distractions from what’s happening under the hood, which is that grocery stores — the physical four walls — are going digital.

Ready or not, consumer packaged goods (CPGs) — those pre-wrapped items found in so many center aisles — are nudging grocery stores into the future. And so is Amazon. The online retail giant’s entrance into brick-and-mortar supermarkets forced every retailer to innovate or die.

It’s been decades since the internet changed the way we shop, so why are American retailers slow to get on board? The founders of Trax, a retail technology firm based in Singapore, might point to our love for the status quo. The U.S. Census Bureau’s figures (from second-quarter 2018) bear that out, indicating that e-commerce sales account for 9 percent of total sales. That means 91 percent of sales still occur in stores. Maybe U.S. retailers aren’t scared yet?

In contrast, the true retail visionaries are found in Australia, Brazil and China. Yair Adato, Trax’s chief technology officer, says China is five years ahead of the U.S.

“In China, you can go to a store, scan what you want to buy, put it in your cart and they’ll deliver it to your home in 30 minutes,” Adato says.

Soda giants were early pioneers in creating speedy distribution channels. Yet despite raking in billions of dollars in sales, they couldn’t point to exactly how, when or why. Brands were guessing what was on the shelf, how much was left, what was selling at what times of day and even what their competitors had on the shelf. Short of physically walking in to every single store in the world and snapping a photo of the soda aisle, they had no idea what was happening.

In some countries, brand managers might have trusted their employees when they said they went to a store and reported that everything “looked good.” But in China or Brazil, managers wanted visual proof. “It’s a culture thing,” said Adato. “I want to know that I paid the right bonus to my employee.” In Australia, instead of proof, they wanted to improve processes using data analytics.

But it was a little bit like the chicken and the egg. Brands wanted to harness data to make better business decisions, and stores wanted to evolve. They saw that online shopping was more engaging for customers than a trip to the store, but it was an expensive undertaking with no clear financial incentive for either party. While a brand like Coke might want to push retailers for improved ways of tracking its sales, the reality is that it has only a few thousand SKUs (aka, inventory items). Target, on the other hand, has hundreds of thousands. But before it could become cost-effective for retailers to adopt new tracking tools, the technology — sensors, beacons, cameras — needed to advance.

In 2010, Trax began offering its image-recognition software, which incorporated physical images (taken by humans) and store data (including store layout and register sales), then stitched them into one actionable gold mine. For the first time, sales teams could have detailed product and category information including out-of-shelf, share-of-shelf, planogram, pricing and promotional compliance delivered to their mobile phones in real time. This was something managers could trust.

“In a grocery store there is so much dynamic movement,” says David Gottlieb, vice president of retail at Trax. “Something like 40 percent of products will change — a new item, or line extensions and new packaging.” Gottlieb deeply understands the in-store problem.

“Manufacturers are using us, even without feet on the street [robust sales teams] to collect information to get true metrics as to what degree their customers are making perfect stores, and that incentivizes the sales team to do a better job,” explains Gottlieb. He joined Trax in 2018 when the company purchased his startup, Quri, which used a crowdsourcing model to leverage large groups of people to perform paid “microtasks,” like taking images of store shelves.

With the acquisition, Trax now has half a million shoppers active in 6,000 U.S. cities with access to 150,000 stores. Despite this, the company is moving beyond human photographers and is beginning to install battery-operated internet-connected cameras underneath the shelves. The cameras take photos every minute of the day.

“It creates opportunity for use cases — like intra-day replacement,” CTO Adato says. “Our customers are looking at how long things last. That’s an indicator of lost sales that wasn’t available.” CPG clients that use Trax report their out-of-stock rates reduced by 10 to 15 percent and category sales (e.g., soda, crackers or condiments) increased by 3 to 5 percent.

While Trax was homing in on the perfect store, Shelfbucks, an Austin-based technology startup, was grappling with another unknown: marketing. Brands were spending money on in-store product merchandising displays to promote their products, but they had little idea what worked or whether they even made it to the floor. Erik McMillan, the CEO of Shelfbucks, made a fairly compelling argument for his technology: “You spend a $100, and you’re wasting $50.”

Through a fortuitous meeting with two of the biggest display producers in the U.S. — West-Rock and Menasha Packaging Co. — McMillan gained access to an untapped business opportunity that helped brands answer their age-old question: Does my marketing have an ROI?

If it sounds like meta-marketing-speak, that’s because it is. You send a physical piece of signage into your supply chain and on the other end it arrives at a store. It’s supposed to be put up somewhere, on the end cap (those shelves at the end of each aisle often filled with promotional items) or the shelf, but maybe it never makes it out of the back room. With no analytics, you’re left hoping for the best. Given the amount of money spent on merchandise promotion whose effectiveness can’t be tracked — a waste factor of 50 percent, according to McMillan — in-store marketing isn’t much better than shooting in the dark.

In coordination with brands, Shelfbucks puts sensors on displays, and in coordination with retail customers, it places sensors throughout stores. The sensors track the movement of the signage — whether it’s in the back room or out on the floor. When there are problems, Shelfbucks gets an exception report, which is sent to the store manager as an alert in the store’s task management system.

“We are literally generating data about something (store managers have) never seen before,” McMillan says. In 2014, one of Shelfbucks first customers was CVS Pharmacy; today Shelfbucks is in CVS stores nationwide. Fresh food is his next target. “We are focused on the three national chains: Kroger, Albertsons and Ahold USA.”

How these changes benefit consumers is open for debate. Perhaps it’s as simple as knowing our favorite soda — Dr Pepper Vanilla Float, perhaps — will never be out of stock again. And while it may seem as if the CPGs of the world are driving change, McMillan reminds us otherwise.

“Brands can’t force retailers to do anything. Retailers have the power. That’s a really important point,” McMillan says. “The brands have the money, and the customer buys their product, but the retailer owns the shopper.”

For a deep dive into grocery store technology, read Joseph Turow’s book, “The Aisles Have Eyes.”

Markets Go It Alone

Markets Go It Alone

The buzzword for today’s brick-and-mortar retailer is “frictionless.” It refers to a shopping experience where customers can come and go with ease. It means not waiting in lines and never having to take cash or a credit card out of your wallet. Sounds dreamy, right? It’s happening now, and here’s where to find it.

Zippin: San Francisco, CA

When Krishna Motukuri’s wife sent him to Trader Joe’s for a bottle of milk, he came back empty-handed. Why? The checkout lines were too long. When he dug into a study from MIT that found 37 billion hours were lost waiting in line every year, he was stunned. Wanting to help solve this problem, Motukuri took his computer science background and co-founded Zippin.

But while most of us think of the physical store as the end goal, Zippin only wants to be the powerful back end. This month, the startup launched a basic concept store in San Francisco to showcase its technology. To get through the slick entry gate, customers scan a QR code on their mobile phones. Once identified, customers can pick up a can of mango La Croix, a bag of sea salt Boomchickapop popcorn or perhaps a deli sandwich. Soon after they pass through the exit gate, an electronic receipt is sent to the Zippin app. And that’s it. Zippin’s AI-based software platform will allow retailers to deploy a “frictionless” shopping experience that wipes out time spent standing in line. According to Motukuri, operators of physical stores would need only minor upgrades — weight sensors on the shelves and overhead cameras — at a cost of about $25 per square foot. These enhancements, along with Zippin’s software (charged on a monthly subscription) will tell a retailer precisely what has been taken off the shelves.

Amazon Go: Seattle, WA

In January, Amazon opened its first cashier-free store on the ground floor of one of its many offices in downtown Seattle. Called Amazon Go, the store is a free-for-all of convenience foods, meal kits; even beer and wine. As reported by Recode, by being first on the scene, Amazon hopes to “carve out a loyal customer base outside of its website and inside a physical store where the vast majority of food and grocery shopping still occurs.”

Shoppers with the Amazon Go mobile app gain access to the store with a QR code, shop for snacks, take whatever they want and then they “Just Walk Out” — the name for Amazon’s technology. This includes overhead cameras, weight sensors and deep learning technology that detects what shoppers take off the shelves or if they change their mind and put something back. When customers leave the store, the “Just Walk Out” technology debits their Amazon account for the items and sends a receipt to the mobile app. In August 2018, Amazon opened a second location in Seattle. Expect subsequent stores to crop up in San Francisco, Los Angeles and Chicago, where Amazon has already signed leases for two locations including one in the famed Willis Tower.

The Moby Mart: Shanghai, China

While Amazon wants to help us eat more snacks, Wheelys, a Stockholm startup, is developing a market on wheels stocked with hip sneakers, fashionable magazines and yes, milk and cookies. In collaboration with Hefei University of Technology and tech firm Himalafy, the team created a roving, train-shaped convenience store on the university campus, 450 miles west of Shanghai, that can be located using an app. Self-driving, drone-equipped, powered by solar and always open, The Moby Mart is a tech nerd’s space-age fantasy come true.

Wheelys’ foray into automation began with modular-bike cafes. The easy-to-schlepp coffee carts could be moved around Stockholm for anyone not ready to commit to a lease. It was so popular that by 2016 Wheelys had sold 550 bikes. Looking beyond their Nordic country for their next innovation, the founders settled on China because of its large population and the country’s near-ubiquitous adoption of phone payments. While The Moby Mart is still running in beta, Wheelys is moving ahead with what co-founder Tomas Mazetti is calling “magic tech,” or hidden tech.

“At the moment, we believe that hidden technology is the next revolution, not just in retail but in many industries,” Mazetti says. “Imagine walking in through an open door, seeing a beautiful pair of sneakers, trying them on and then leaving the store with them, without ever having talked to anyone or seen any security.”

Farmhouse Market: New Prague, MN

Thankfully, not every automated market is so hands-off. In Minnesota, married couple Kendra and Paul Rasmusson opened Farmhouse Market in 2015. The Rasmusson’s wanted to open a store that offered delicious goods from local farmers, but they knew that staffing a store (and raising their three small children) would be a big challenge. Undaunted, the pair came up with some ingenious ways to run a mostly automated farm store that has some human touches.

First, there’s a membership base — $99 to join and then $20 annually. Members (now in the hundreds) can drop by 24-7 and receive a 5 percent discount on all purchases. Nonmembers can get in on the action at specific hours during the day when there is an actual person behind the counter. And it’s not all that high-tech: Members and farmers use a keycard entry system, and motion-activated lights and tablets enable self-checkout. (There’s a one-theft-and-you’re-banned-forever policy.) The store, only 650 square feet, is monitored with remote cameras, and inventory is tracked digitally. As with every one of these stores, humans are still quite important. Ms. Rasmusson prices items from home and texts orders to suppliers.