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Where Are Food+City Startups Headed?

by Cory Leahy | Jun 22, 2018 | Issue 4, Startup Spotlight, Stories

If the 2018 Food+City Challenge Prize entrants are any indication, we’re well on the way toward improving our food system.

Four years into our competition for food supply chain startups (read about all four years’ of finalists), we’ve noticed some interesting trends, including changes in the way entrepreneurs think about innovation. Progress is apparent despite food regulations, a lack of consistent data standards and the companies’ need to achieve scale while remaining small and agile. For many startups, technology is central — but it’s not necessarily all about apps anymore.

Instead, futuristic tools that bring new rigor to agriculture and warehouse management are on the horizon. UAV-IQ Precision Agriculture, one of three $10,000 Food+City Prize winners, provides precision crop monitoring for farmers using drones and sensors. The new technology enables farmers to use the gathered data to make decisions about resources to maximize their yields and reduce crop losses.

“UAV-IQ is attacking the fundamental lack of precise knowledge of where variability exists within fields,” says co-founder Andreas Neuman, former assistant director of operations for the U.S. Air Force’s Global Hawk Unmanned Aerial System. “This lack of knowledge and suitable toolkits to first identify and then manage variability leads to massive inefficiencies due to one-size-fits-all approaches, which often result in over-usage of water and chemicals.”

Another high-tech agriculture solution is Transaera, which is commercializing a material developed at the Massachusetts Institute of Technology that absorbs moisture within greenhouses. The product gives indoor farmers more control over their growing environments and enables them to reduce plant disease and increase yield while also reducing energy consumption.

“To feed nine billion people by 2050, we need new agricultural systems,” says founder Sorin Grama. “Indoor agriculture could be an answer, but it is an energy-intensive operation that will not scale unless we figure out how to grow foods using less energy and water.”

Entrepreneurs are also using technology to connect links in the food supply chain. For example, Stowga, a London-based business-to-business startup, connects retailers to unused warehouse space. This “Uber for warehouses” helps firms with excess storage use their space more efficiently; and it offers below-market options to businesses that may need space for only a short time.

Team mentor PJ Tanzillo, head of product at Favor Delivery, has high expectations for Stowga, led by CEO Charlie Pool. “Charlie and team are not your typical early-stage startup,” Tanzillo says. “They have a clear line of sight to a sustainable business, and they have achieved product and market fit. I’m confident their success will continue.”

Making connections across chain links continues to be a key draw for startups. Vinder is a digital platform that connects home gardeners who grew more than they can eat with community members who seek freshly grown food. Sam Lillie launched Vinder by going door to door in his hometown of Port Townsend, Washington, asking residents whether they had home gardens and if they ever had extra produce they’d be willing to sell. It wasn’t long before Lillie connected dozens of home gardeners with produce-hungry families, moving more than 300 pounds of fruits and vegetables among them.

“We have been trained over the last 70 years to buy our produce and processed goods from a giant supermarket chain that sources products from all over the world,” says Lillie. “Vinder reduces the food waste that happens in every city across the country while efficiently reducing delivery miles because you are buying from your neighbor and not some farmer in Argentina.” With the Vinder website and app, consumers in dozens of cities in 11 states can connect with nearby growers to buy the produce they seek, reducing food waste and putting money back into their communities, literally at the grassroots level.

If you don’t have a garden but want to grow your own food, Indiana-based Aggressively Organic, one of three Prize winners, can help. It offers micro-gardening systems for people without access to earth-based gardens. Users can grow lettuces, tomatoes and other fresh veggies in just one square foot of space in their homes. Anchored by cardboard “micro-growth chambers,” the hydroponic systems use a mere 16 ounces of water to grow a head of lettuce. In contrast, conventionally grown lettuces require 25 gallons of water per head.

“Instead of cut-and-kill or pull-and-ship — like all other current modalities of agriculture that end up shipping already dead and dying goods that end up being wasted — our stuff stays living, and we harvest when hungry,” says founder Jonathan Partlow.

Vinder and Aggressively Organic aren’t the only companies working on solutions to curb the growing amount of food waste. The 2018 submissions included ideas for moving excess food to consumers and methods for repurposing waste such as spent grains from beer breweries as ways to limit the amount of waste that ends up in the landfill.

The most tenacious and complicated problems that startups try to solve involve aggregating and transporting food from local producers to markets, restaurants and grocery stores. It’s a problem that food hubs have tried to solve for years. Today’s startup teams are working on a range of platforms: from apps that aggregate farm inventories to hauling and logistics businesses that focus on the transport of food from local producers to consumers. One of our contestants, GrubTubs, retrieves food waste from restaurants, turns it into compost for local chicken farms and then provides eggs back to the restaurants.

Another, Houston-based Grit Grocery, brings the grocery store right to your neighborhood, using a food truck model. Consumers no longer have to travel to the fringes of their communities to shop at energy-gobbling big-box grocery stores. Instead, Grit Grocery trucks bring locally grown produce, local honey and meal kits — featuring, for example, shrimp from the Gulf of Mexico — right into communities, shortening the last food mile and cutting the distance from farm to table.

“The shopping experience fundamentally shapes the flow of food, not only by creating limitations on what kind of food can be supplied but also by subtly creating demand for certain foods or even entire categories of food,” says Dustin Windham, who founded and operates Grit Grocery with partners Michael Powell and Jamal Ansari. “Building on that, we want to develop a new kind of localized supply chain that is specifically tailored to retail experiences, which is more curated, community-driven and socially intimate.”

Some of these startups rely on volunteers and are modeled more like nonprofit organizations that rely on grants and donations. Others are attempting to create value for both farmers and consumers by charging either the farmer or the consumer for their logistics services. These startups are responding to increasing consumer demand for local food from small producers. But it’s not clear if this local supply chain can find a way to make money without working with the larger food distributors.

In Kenya, where large food distributors aren’t as common in the food system, Taimba seeks to tame a chaotic and fragmented supply chain by connecting farmers with retailers and vendors through a cashless business-to-business app. Vendors order their produce via the app, then Taimba retrieves it from the farmers and delivers it to the marketplace. Farmers receive a fair price for their goods, and vendors receive inventory at below-market prices.

“The ability to offer a market and good prices to small-scale farmers has really boosted farmers’ earnings by reducing wastage and paying promptly,” says founder Dominique Kavuisya. Taimba went home with one of three $10,000 Prizes.

While consumers everywhere want more local food, the system to deliver the goods is still awkward, unsustainable and encumbered by capital equipment expenses and the lack of technology and tracking on the small-producer side. We are anxious to see how our finalists work on solving these issues.

Through the innovative work of our contestant startups, we are optimistic that we will see more locally produced fresh produce reach consumers, less food waste in the landfill and better and safer products in our food system.

Prize winner Andreas Neuman of UAV-IQ with Food+City’s Robyn Metcalfe.

UAV-IQ’s monitoring technology in use.

Transaera founder Sorin Grama makes his pitch at the 2018 Challenge Prize.

Transaera’s technology absorbs moisture in greenhouses.

Map by Stowga representing available storage space in the United Kingdom.

Vinder founder and CEO Sam Lillie.

F+C’s Robyn Metcalfe with Prize winner Jonathan Partlow of Aggressively Organic.

Aggressively Organic’s hydroponic growing system with leafy greens.

Grit Grocery truck in Houston.

Grit Grocery founder Dustin Windham, right, visits with a supplier in the field.

F+C’s Robyn Metcalfe congratulates Dominique Kavuisya, Taimba founder and Prize winner.

FOOD+CITY Challenge Prize

Innovation in food takes all forms, from making improvements to pallets to creating new avenues for delivering food or designing packaging that increases shelf life. Since 2015, we’ve hosted a challenge prize for startups in the food space that are challenging our notions of how the supply chain works. The 2018 Challenge Prize was awarded on March 13, 2018, at SXSW Interactive. Visit foodandcity.org/prize to learn more about this year’s entrants and winners.

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Startup Spotlight: 2017 Prize Finalists Keep Sparking Change

by Cory Leahy | Nov 14, 2017 | Issue 3, Startup Spotlight, Stories

Whether they were newly hatched companies or enterprises needing a little help getting to the next level, competitors in the 2017 Food+City Challenge Prize are still going strong. We checked in with several finalists to hear about their progress.

Refrigeration is an invention of the supply chain. You can’t safely transport perishable food without it (unless you employ centuries-old preservation tactics like salt curing or pickling). But in the 100 years since refrigeration technology was invented, it hasn’t changed much, and it almost always requires electricity to work.

In many developing countries, electricity is not assured, and many people suffer from food insecurity because they can’t save or preserve enough food. Nearly half of the produce grown in Africa goes to waste before it reaches the consumer. Evaptainers, a Boston- and Morocco-based startup, has reimagined refrigeration technology and is bringing it to those who need it most.

Evaptainers’ refrigeration systems don’t run on electricity. Instead, they use sunlight and water. A collapsible box, small enough to sit on a countertop, cools food the same way humans cool themselves — through evapotranspiration. In other words, when water evaporates, cooling occurs.

This simple yet revolutionary technology has been garnering lots of attention and gaining traction. Following the capital infusion that came with winning the gold prize at the 2017 Food+City Challenge Prize, the company went on to win more awards: One award at the pitch competition Foodbytes! in San Francisco and a United Nations innovation award at the Seeds and Chips global summit in Milan. They have also been featured in Ag Funder News, The Boston Business Journal and TechCrunch. Their acceleration continues, with support from LAUNCH Food and funding from USAID, and they are finalizing the production of 400 prototypes slated for a field trial in Morocco this summer. A commercial launch is likely in 2018.

In addition to vital funding, a key result from their experience at Food+City’s Challenge Prize has been relationships with other startups.

“We met startups working on different aspects of food and food waste and have learned so much from our conversations with them about the arduous yet fruitful process of growing a small social impact business,” says chief strategy officer Serena Hollmeyer Taylor. Starting a company is often a struggle, as Prize competitors know. The opportunity to interact with others going through similar challenges, who can share knowledge and lessons learned, is a powerful outcome of Prize.

Evaptainers‘ electricity-free refrigeration device, made especially for use in developing countries where the electricity grid is unreliable. Using evapotranspiration, the box keeps produce and other products cool and prevents spoilage.

The Last Mile is a supply chain concept ripe for innovation. It is often the most expensive and complicated leg of the supply chain journey for food products. Narrow roads, city traffic and generally limited space contribute to the challenge of this final stage in the supply chain. Large, cumbersome trucks have traditionally been the go-to mule — and scapegoat — for these deliveries.

Nüwiel, a startup in Hamburg, Germany, has taken on that challenge. The company created electric-powered bicycle trailers specifically for last-mile delivery in urban settings. Their technology knows exactly when to accelerate, decelerate and brake to make last-mile delivery via bicycle more efficient and realistic. In addition to improving delivery efficiency and reducing road traffic, the bike trailers don’t contribute to the pesky urban problems of noise and air pollution.

After winning the bronze prize at the 2017 Food+City Challenge Prize, Nüwiel used the attention to accelerate their development.

“The Prize has certainly helped us a lot. We received significant media attention, getting mentioned not only in Germany but also in the U.S., U.K., Austria and Italy,” says co-founder Natalia Tomiyama.

In the months since Prize, Nüwiel has been accepted to a second stage at the biggest trans-European accelerator, Climate KIC; they’ve scheduled pilot projects with four different partners; attended South By Southwest; updated the design of the trailer; built a prototype; and were selected as to pitch and exhibit at the CUBE Tech Fair in Berlin. Last summer, they got out of the building to bike across Europe — from Hamburg to Italy, passing through the Netherlands, Belgium, France and Spain — and test the durability of their trailer.

Nüwiel’s powered trailer for making urban food deliveries; hooked up behind a bike.

The issue of food waste is under attack on multiple fronts. Entrepreneurs are coming up with new ways to use food waste, while public awareness campaigns aim to induce behavior change. Some progressive governments have even joined the battle. In France and Italy, laws ban food waste and remove barriers to food donation. This means that French supermarkets can’t throw out unsold produce. While well intentioned, the law leaves French groceries in a bind, with hundreds or thousands of pounds of food that can neither be sold nor thrown away.

Enter Phenix, a 2017 Food+City Challenge Prize finalist, which is addressing that logistical issue in their home country of France. Phenix’s digital platform connects grocery stores with nonprofit organizations whose mission is to feed the underprivileged and food insecure. They organize pick-ups and drop-offs and connect surplus supply with demand in real time, employing their fleet of vehicles to transport the food. Phenix is saving 20 tons of food before it hits landfills, while supplying their charity partners with 27,000 meals — every day.

Since Prize, Phenix was a finalist for the French American Entrepreneurship Award (FAEA). At its headquarters in Europe the company has continued to expand into new regions in France and by finding new segments of the market.

Phenix’s mission goes beyond food waste, which is why they have created a lab to incubate new projects around the circular economy, a system that challenges the more linear system of make-use-dispose by inventing ways of maximizing the value of a resource and regenerating it into another purpose when it reaches its functional end. So instead of trashing unused food, for instance, a circular economy maximizes value buy feeding it to people in need or, when that’s not possible, transform it into a different usable product such as nutrient-rich compost. A planned grocery store with shelves full of strictly unsold products will serve as an example of of this model.

Despite similarities in the ways France and the U.S. treat tax deductions for donations, operating in the U.S. can be difficult because of regulation around food expiration dates. “France has a very detailed and clear framework on what expiration dates mean and what can be donated,” says Sarah Lenoble, director of Phenix USA. “Whereas it is much less clear in the U.S., where there is no real regulation on expiration dates, and every state can have its own regulation.” Phenix is searching for the right partner to launch a pilot program in the U.S.

Phenix workers and partners pick up and recycle or reuse uneaten foods in France.

A worker from Phenix organizes supplies for reuse.

There’s a movement brewing that includes turning surplus bread into beer, aquafaba — aka chickpea cooking liquid — into vegan mayonnaise and food waste into new packaging and products. With all the attention food waste is getting, it makes sense that “upcycling,” the process of using a discarded material and creating a valuable product with it, is quickly gaining traction in the marketplace.

Rise Products takes unspent barley from microbreweries in Brooklyn and uses a proprietary process to turn it into flour, which can be used to make the same products as traditional wheat flour. And they’re working with well-known Brooklyn bakery Runner and Stone to develop recipes for all kinds of carby treats. The flavor of the flour Rise produces varies based on what type of beer was produced from the grain — flour from ales tastes nutty and light, while porters create a dark and rich flour that smells like chocolate.

By participating in events like the Zero Waste Food conference and the Make It in Brooklyn Pitch Contest, in which it was selected as a top-five finalist, Rise has firmly entrenched itself in the upcyling-to-beat-food-waste movement.

Since winning a silver award at the 2017 Food+City Challenge Prize, Rise has continued to gain momentum. They completed their time at the Food-X accelerator, gaining valuable mentorship and connections, and came away with a prototype for a production facility. From their spot in the Brooklyn Navy Yard as part of the 1776 Accelerator, Rise is working with the New York Economic Development Board to develop their own production plant.

Making the most of the Prize experience, they have stayed in touch with other startups from the competition, as well as their mentor, Ashley Shaffer of IDEO.

“Participating was an awesome experience for us, especially since we met our mentor, Ashley. We’ve kept in touch with her and with the other participants since then, even meeting some of them recently in Milan during the Seeds & Chips conference,” says COO Ashwin Goutham Gopi.

Bags of ready-to-use Rise Flour, made from spent brewery grains.

Some say the future of agriculture is in cities. As the world’s urban population continues to expand, it is easy to imagine how growing food in nontraditional areas, like skyscrapers and downtown warehouses, will benefit the food system. But while vertical farms, urban and rooftop gardens, and shipping container farms are all making progress in the area of urban farming, none has a foothold quite yet.

Distributed farming is the latest idea in this sector. The process enables a business or restaurant to re-route the last food mile and finish growing a product in the location where it will be consumed.

Brooklyn-based Smallhold is leading the charge for distributed farming. At the 2017 Food+City Challenge Prize, co-founders Andrew Carter and Adam Demartino pitched the idea of distributed farming through restaurant mini-farms that produce mushrooms. Today they’re cultivating several unusual varieties of mushrooms, from lion’s mane to yellow and pink oyster, and they plan to expand into other products like leafy greens soon. Top chefs and restaurants in New York are taking notice and endorsing the products.

Since Prize, three new restaurants have come become clients, welcoming Smallhold farms into their kitchens. Smallhold also sells their products directly to grocery stores and intends to use connections from Prize to pursue expansion in major retail stores.

“Food+City introduced us to some amazing stakeholders and thought leaders from places like Whole Food and Walmart, and we are extremely happy we attended,” Carter says. The company is gaining momentum in the tech circles as well. The team benefited from the mentorship and guidance of the TechStars Boston program, which wrapped up in May 2017. They have also seen their team grow 100 percent since Prize and have expanded their farm with a custom-built shipping container to grow more mushrooms.

Mushrooms grown by Smallhold.

FOOD + CITY CHALLENGE PRIZE

Innovation in food takes all forms, from making improvements to pallets to creating new avenues for delivering food or designing packaging that increases the shelf life of a food. Since 2015, we’ve hosted a challenge prize for startups in the food space that are challenging our notions of how the supply chain works. The 2018 Challenge Prize will be awarded on March 13, 2018. Be sure to visit foodandcity.org/prize to watch this year’s entrants become finalists and compete at SXSW Interactive 2018.

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Food Entrepreneurs Find Continued Success

by Cory Leahy | Sep 25, 2017 | Issue 2, Startup Spotlight, Stories

Whether newly hatched companies or enterprises needing a little help getting to the next level, competitors in the 2016 Food+City Challenge Prize are still going strong. We checked in with three of the Silver Prize winners to hear about their progress.

Carolina Medina found herself in a paradoxical place after competing for the 2013 Hult Prize, a million-dollar seed-capital competition. Her team, which came together for the contest, finished in second place — but the winner took the entire purse. Undeterred, Carolina pressed forward with Agruppa, a company that leverages technology to empower mom-and-pop food vendors by providing produce at wholesale prices, eliminating middlemen. After a successful pilot in Kenya for the Hult Prize, Carolina and a partner brought Agruppa back to her home country of Colombia, and it continues to grow.

Carolina Medina

Agruppa

The basic issue was the cost — not the availability — of food in low-income neighborhoods. In other words, it wasn’t that the apples weren’t arriving, it’s that they were arriving at a very high cost after going through the hands of numerous middlemen, each of whom were taking their cut.

We knew we wanted to make a mobile-based solution where small shops could order directly and bypass the middlemen. Our system aggregates demand for fresh fruit and vegetables from small vendors, creating daily collective orders that add up to wholesale quantities. Vendors are economically empowered, and those living in low-income communities benefit from sustainable access to nutritious food at lower prices.

One of the biggest pivots we had here in Colombia came from the realization that Bogotá is a very large city, and distances are too long for mom-and-pop shops to come to our warehouse and pick up what they ordered the night before. We needed to become a heavy logistics company and incorporate daily deliveries to the shops—Monday through Saturday—into our model.

It was a great pivot because I realized we could be a lot more cost-efficient: It allowed us to increase the capacity of our warehouse rather than create multiple little warehouses all over the city where people would come and pick up their orders.

After bootstrapping with our current ordering channels — WhatsApp, SMS or phone calls — we’re ready to build and implement three more sophisticated channels for vendors to order their stock: a personalized app, an integrated voice recognition transactional system and a simple call center for those who are less tech-savvy and for customer service in general. This should also help cut down customer ordering time as well as optimize the logistics behind it all.

And breakeven is on the horizon! Hopefully, with 700 mom-and-pop shops — which we should have by mid- 2017 — we will become self-sustainable!

Ashley Colpaart is a food system innovator whose business helps other food innovators. Inspired by other sharing e conomy businesses — e.g., Uber, Air BNB — The Food Corridor brings together commercial kitchens with excess capacity and nascent food businesses in need of kitchen space. It’s a win-win for all players, offering restaurants and school kitchens potential new revenue sources, and giving food producers a foot in the door to develop their products and grow their businesses. In June 2016 Ashley launched The Food Corridor’s platform in Colorado, taking on the first stage of building her market of commercial kitchens.

Ashley Colpaart

The Food Corridor

In 2015 I was reviewing applications for Community Food Project Grants to decide who would get funding. Many of the projects wanted to build infrastructure, like processing and distribution centers. But their business plans weren’t always very strong, and many lacked an asset mapping of what infrastructure already existed in their community. I was thinking, “How do you know you need to build this facility?”

During that trip, I used Air BnB and Uber for the first time, and it dawned on me that the sharing economy that exists in other sectors hasn’t been applied to the food system. Sharing is something we do with food all the time. We break bread together, people have been sharing kitchens for a long time, co-ops started in agriculture — so I thought, why not apply that same model to the food sector? I chose to do it with kitchens because that’s where a meal starts.

Our platform development process has been very customer-centric. We beta-tested our software with 12 shared-use kitchens nationally, watching them use the product and listening to them talk about their business models and what features were essential for them. Then we prioritized those features and built them. Something our Food Challenge Prize mentor said really stuck with me: “When you’re building a new product, you can build something and maybe people will want it. But if you listen closely to the problem your customer has and build a solution for it, that’s when you win.”

What’s cool about my idea is that it can be applied to any commercial kitchen asset — like refrigerated trucks, or backhauling produce, or freezer or refrigerator space. If a farmer has a bumper crop of tomatoes or there’s a hail storm coming that weekend and they want to harvest before they go to market in a few days but they don’t have a refrigerator, they could hop on The Food Corridor and find some commercial refrigerator space where they could store it for a few days. I see The Food Corridor becoming a pipeline of innovation for the food industry.

Startup to acquisition is the ideal path for many new businesses. For Real Food Solutions, that milestone came just five months after winning a silver award at the 2016 Food+City Challenge Prize. The Boston-based company, co-founded by Neheet Trivedi, uses existing clinical research to create food-based remedies for everyday ailments, including nausea. In July 2016, they were acquired by Pink Stork Solutions, a company committed to delivering natural products to help alleviate some of the symptoms that come with pregnancy.

Neheet Trivedi

Real Food Solutions

The aha moment was seeing my sister have terrible nausea from morning sickness when she was pregnant. She was reluctant to take medication and wished for a food-based solution that would help with her nausea, be easy to eat and provide nutrition.

I knew I had to partner with somebody who has the skills and background to help build this. Through a mutual friend I met Dr. Rupa Mukherjee, a practicing gastroenterologist, who was very excited by the idea. She had a lot of patients to whom she was recommending food-based solutions, but there wasn’t a specific solution or product that she really liked. Our idea was to make products for aspects of health, starting with nausea. My role is “make it happen” — bring experts together, ask the right questions, find the manufacturer, find the customers. So I rely on people like Dr. Mukherjee to provide the input to create our products.

We started doing tests with our nutrition bar on cruise ships for people who get nausea from motion sickness. Demand was so high that we focused more of our marketing and sales efforts on that space and a little less on other forms of nausea. We haven’t let pregnant women go by any means, and they’re still a focus of the business. We just found our initial market through motion sickness. You focus on different markets based on the skills and tools you have. Business is constantly evolving.

Building a company from scratch is tough. You’re competing against incumbents and new companies, you’re competing for mind space, for Internet space. You must be thoughtful about how you’re differentiating, especially with a consumer product. We have an advantage in that people are looking for our products: They’re looking for morning sickness relief, motion sickness relief, nausea relief, so they often find us. But you must do everything you can to make it easy for them to find you — because we have a solution that we know will help them.

The goal with Real Food Solutions was to build a successful business, and there are many ways to do that. You can raise outside funds or remain private and grow a lifestyle-type business. We felt that the timing was right for us to partner with another company that had a great brand and a way to reach more customers than we could alone, and we’re excited to join the Pink Stork Solutions team.