By: Todd Saxton, associate professor of strategy and entrepreneurship
When you think about innovation and entrepreneurship, what scenery comes into your mind? It may be the suburban garage, where visionaries like Bill Gates and Steve Jobs started as tinkerers on their way to becoming tech titans. Or maybe a state-of-the-art laboratory, where biotech breakthroughs cause venture capitalists to swoon.
It’s less likely that you think of local farmers or agronomists, chefs or restaurateurs. But that could be changing, thanks to the growth of food entrepreneurship.
“Food entrepreneurship” broadly refers to new ventures that are redefining how we grow, deliver, and enjoy our food and drink. Food entrepreneurs can tackle global challenges or celebrate the value of being local. They can inspire intense loyalty from a small group of valued customers, or aspire to address sweeping issues like sustainability and hunger.
Hoosiers are making their mark on food entrepreneurship in a number of ways, bringing new investment and jobs in the process.
Starting big, the ingenuity of entrepreneurship is needed to find new solutions to the growing issue of world hunger. Here, the numbers are staggering — it’s estimated that more than 1 billion people in the world suffer from hunger today. By 2050, the global population is expected to grow by another 2 billion … with limited resources and finite arable land, the food challenge seems intractable.
But the power of entrepreneurial innovation is that it can produce exponential, not just incremental, progress — harnessing technology to produce more food from scarce land. In Indiana, homegrown ventures like Beck’s Hybrids continue to show the way, after more than a century of advances in agricultural genetics to produce better-performing crops. And new companies like West Lafayette-based Spensa Technologies continue to enter the fray, recently completing a $1.3 million capital round for its high-tech (non-chemical) pest management devices to reduce crop losses from invasive insects.
While companies like these seek the biggest markets for innovative solutions, another movement in food entrepreneurship asserts that smaller is better — local food pioneers seek to shrink the distance between field and table, reducing the carbon footprint of long-distance supply chains than import crops from across the country or overseas … and eliminating the need for preservatives and other additives to keep food safe over such journeys.
With these appeals to health and sustainability, companies like Green BEAN Delivery are finding a lucrative market bringing local food to eager customers. Veteran entrepreneur Chris Baggott, who earned his tech stripes as a co-founder of ExactTarget and later Compendium, has turned his attention to the local food market with a 100-acre spread in Greenfield, Tyner Pond Farm, as well as other locations where he and his team raise livestock with humane practices that resonate with a growing number of consumers. And you can sample the products grown just miles away at his revamped Frosty Mug restaurant in Greenfield! Baggott is also involved as co-founder of HUSK, shortening the chain from local produce to the table.
Finally, there is always a demand for new culinary experiences – different foods and drinks to enjoy, or unique ways to enjoy them. Central Indiana success stories in this space are too numerous to do justice, but Chris Eley of Goose the Market and Smoking Goose, Neal Brown of Pizzology and Libertine, Scott Wise of Scotty’s (one of the more social media-savvy local restaurateurs), and of course Martha Hoover’s growing Patachou empire are a few that come to mind. New offerings from former Colt Gary Brackett (Georgia Reese’s) and Peter George (Peter’s) teaming up with Thomas Main (Puccini’s) are notable additions to the scene, while the recent explosion in Hoosier craft breweries is still going strong.
Of course, these opportunities are all very different. Veteran entrepreneur Mark Mireles wrote recently that “Food is a market like the Internet is a market — it’s too big to be considered just one ‘market.” But it’s fair to say that food as a category is booming, attracting more than $620 million in year-to-date start-up investments. That’s on pace for the best year ever for food-related venture activity.
The Venture Club of Indiana recently hosted a panel discussion and entrepreneurial session on “Challenges and Opportunities in Food Entrepreneurship and Investing.” Gerry Hays (of Better Retail, and the new food accelerator Tinker Flats), Chris Baggott and I organized this session, which got a great reception from food entrepreneurs of all types.
Food doesn’t rival tech as a magnet for private equity, and the kitchen may never replace the garage as the entrepreneurial archetype. But the sector has certainly become more appealing to investors always hungry for promising opportunities, and the Venture Club session shows the intense interest and activity close to home. Food entrepreneurship is giving a growing group of Hoosier visionaries the chance to practice innovation and creativity — and with more prompting, networking and success stories to emulate, we see the appetite for new food-related ventures only growing.
My wife, and Kelley colleague, Kim, wrote about the local food movement for Kelley BizBlog this summer. You can read her post here.
* This blog also appeared in the Indianapolis Business Journal.