- Food-X’s latest cohort taps into two big trends in the food space: functional food and diverse founders. Three-quarters of the eight startups chosen by the food innovation accelerator focus on food as medicine, half are female led, and a fourth have a person who is a minority at the helm. The accelerator's 10th group of startups was announced Monday morning.
- The companies in the cohort are AI Nutrition, which integrates an artificial-intelligence-powered nutrition platform with online grocers; Bevv, an e-commerce marketplace for craft breweries and cideries; Edi Health, a curated health and wellness marketplace; Farma Genetix, a startup looking to cure chronic conditions through natural supplements and personalized customized diets; Hidden Gems Beverage Company, a food waste reduction company producing antioxidant-rich ready-to-drink beverages with upcycled ingredients; Millennia TEA, producing clean, raw, fresh-leaf tea to maximize antioxidant intake; YoFiit, a company looking to increase nutritional profiles in the plant-based food and beverage category; and YourLocal, a food waste startup looking to offer neighborhood restaurants quality surplus food at a lower cost.
- The accelerator received more than 500 applications from 50 countries for this round. The selected startups give the accelerator 8% equity and receive a three-and-a-half-month crash course in startup growth from a panel of mentors, plus $70,000 cash when they start the program.
In the recent past, food trends have skewed toward items and ingredients that are better-for-you, natural, clean label, plant-based and functional. This cocktail is reflected in Food-X’s new cohort. Functional foods are a focus for consumers who are looking at what they eat as more than a way to fill their stomachs, but also as key to their health. There are many brands that want to serve these consumers, and which share the same philosophy.
Food-X isn't the only entity funding companies in the functional space. PepsiCo acquired probiotics beverage maker KeVita. General Mills funded Farmhouse Culture. Food as medicine has even expanded from products with turmeric and added antioxidants to doctors sending patients to the grocery store as integral part of their treatment plan.
Technology is also starting to break into the food space, which some experts say is sorely needed. According to a recent study from Bain & Company, the CPG industry as a whole is at the infancy stage in AI adoption, far behind many other industries. With brands like YourLocal, Bevv and AI Nutrition rounding out Food-X's cohort, it is apparent that startups want to change this. After all, e-commerce is expected to capture 20% of the grocery market, or more than $100 billion by 2025, according to a report from the Food Marketing Institute and Nielsen and Big Food is employing AI to help identify consumer preferences and release on-trend products.
Food-X is also leading the way in helping companies started by traditionally underrepresented groups. According to Pitchbook, companies with female founders only got about 2% of venture capital funds in 2018. Similarly, 2015 statistics from CB Insights show only 1% of funded startup founders were black. And things aren't better specifically in the food industry. According to a study from AgFunder, agriculture and food tech companies with only female founders receive just 7% of investment deals, representing just 3% of all dollars.
By purposefully selecting members of its cohort with female founders and minorities, Food-X is aiming to change those figures. Doing so could prove a profitable investment. Women-led businesses are one of the fastest growing entrepreneurship segments, according to the U.S. Small Business Administration. These businesses also generate twice as much revenue per dollar compared to other businesses.
Nor is Food-X alone in prioritizing investment in female-led companies. Incubators and accelerators from all categories are beginning to look more actively to minorities and females for innovative ideas. In this spring's Chobani Incubator class, 75% had underrepresented minority founder and 63% had female founders. Last year, Constellation Brands announced it would invest $100 million in female-founded alcoholic beverage companies by 2028 to boost support for women in a predominantly male industry.
Food-X has a track record for success. Previous companies who worked with the accelerator include successful brands like Halla, Uplift Food and Abbot’s Butcher. The accelerator’s investments are also continuously in line with — if not ahead of — new trends, so these eight new companies may be a good indication of what is to come for the food industry.