3 Lessons for Food Startups

3 Lessons for Food Startups

Is your food startup in the 10% club?

90% of new startups fail. That’s a daunting number we often hear cited to “scare” potential businessowners. However, few and far between discuss the 10% that succeed. Although the term “food startup” covers a range of areas, from the world of consumer packaged goods to agricultural technology, there are 3 lessons that hold true foreveryfood startup:

Lesson #1: Develop a value proposition for your food startup, and understand your competition.

Competition in the food industry doesn’t only come from fellow startups that are fighting for precious market share. It also comes from the big guys. Take a look at the chart below to understand the power that big players hold in the food industry:

While the massive food ecosystem above may seem unbreakable, we’re here to tell you that you, as a startup, hold the power. Yes, companies like Coca-Cola make billions of dollars in revenue, but they’re behemoths. As a startup, you’re flexible enough to develop a value proposition that gets to the core of what services/technology you’re offering to consumers. And as we know, value propositions that are genuine connect more with consumers.

Continue to develop and reflect on your value proposition as your startup grows. It’s the first line of communication that potential customers not only read, but understand on an emotional level. And it can be your secret weapon against the likes of Coca-Cola.

Lesson #2: Start planning your “idea” strategy early

You have a business strategy, a marketing strategy, and a cost-reduction strategy. But, what about a strategy for the core of your business: your idea? 

It may seem counterintuitive to know that every time you pitch your startup idea with potential investors or peers, you’re also yelling it out to the world. As we know from history, every great leader can expect to see copycats—and in the food industry, those copycats can be ruthless big companies that may hear your idea at a food event or via internet research. 

While the thought of big companies lurking in the distance may seem scary, we challenge you to reframe this dynamic as a potential win for your startup. When you plan for how you’d like to protect your idea (patent, trademark, copyright), you’re signaling to big food companies that you’re serious about your startup—and that you have a fantastic, innovative idea. Big food companies would love to think as creatively as your startup, but are often working on slower timelines because of hierarchy and bureaucracy. Therefore, your speed in which you’re able to gain intellectual property protection is much faster than a large company—as long as you act quickly. 

Lesson #3: Make sure your channel plan is rock-solid

Many food entrepreneurs choose to first perfect the product prototype, but then overlook the question of channel strategy. Food channels (such as an independent grocery store or Amazon) are arguably an indicator for partnership and business development strength—because if no one can purchase your product, it’s difficult to A/B test and conduct market research. A solid channel strategy requires you to understand your value proposition, customer demographics, and your competition. For example, you may want to use a mass channel strategy, and put your food product in Whole Foods, grocery stores, discount stores—you name it. Or, you may want to price your product as a luxury good, and only distribute at high-end food stores. The choice is yours—but we encourage you to make one sooner, rather than later. 

The three lessons above are interconnected—for example, you wouldn’t want to adopt a mass distribution strategy without first considering intellectual property protection and a strong value proposition to differentiate yourself from other products in-store. They’re meant as thought-starters for your startup, as you move to create strategies that will land you in the 10% “successful startup” club. 

If you’re not sure whether your startup’s intellectual property can be protected, and would like to schedule a free 30-minute consultation to discuss your food startup’s strategy, we’d be happy to help! 


Wondering if your idea is patentable? Have a question about this article? We can answer all of your questions — just hit "contact us" down below!

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