Dive Brief:
- Sonoma Brands and Barnraiser have announced a partnership that joins a food and beverage products incubator and venture fund with a social and funding community that specifically focuses on sustainable and better-for-you foods.
- For Barnraiser members, Sonoma Brands offers training and mentorship to ensure those entrepreneurs are equipped to best utilize the crowdfunded capital they've earned and to grow into mature, disruptive brands.
- Barnraiser brings to the partnership the food and beverage entrepreneurs of tomorrow that will lead this industry disruption with products that are healthy and sustainable.
Dive Insight:
The expansion of food and beverage-centric investment groups (General Mills' 301 Inc., Edible Ventures), crowdfunding opportunities (CircleUp, Kickstarter), and food-related startup incubators (Food-X, Sonoma Brands) is notable. Capital and business savvy are very accessible, and the rise of startups is only going to grow even more quickly from here. It's a sign of much potential for young brands, though also risk if products fail to meet consumer demands and make profits amid increasing competition. Jon Sebastiani, who launched Sonoma Brands, recently told Food Dive about his plans for the incubator and be the trend before the trend.
"We're looking for categories and products that are as different as humanly possible, that a consumer or a retailer, a buyer at any level will immediately recognize a differentiated product," he said.
Still, if startups can thrive with additional capital and business support, they become more of a threat to the other manufacturers in their product categories in terms of usurping market share.
An influx of healthy and sustainable food and beverage startups could also put pressure on larger manufacturers to make their own products healthier and more sustainable to complete and stay relevant as consumers' preferences continue to change. Removing artificial ingredients, simplifying ingredients lists, and making organic, gluten-free, allergen-free, and non-GMO varieties are a start, but the ideas and innovations that better-for-you food startups bring to the market could disrupt the industry in ways key players haven't yet envisioned.