Bridging the gap for food innovation success
Insights
Foodvalley helps startups, scale-ups and small businesses develop innovation. Entrepreneurship lead Anieke Wierenga wants to build a stronger startup ecosystem in the Netherlands to not only rival Tel Aviv, Singapore or Boston, but to become the world’s leading food and agri startup hub by 2030 in a landscape where dreams are realised and ‘heroes’ emerge.
The journey
Ambitious objective? The journey can be very demanding. Just ask Sue Garfitt, CEO of the Breda-based The Protein Brewery. “It’s an evolution from idea to commercialisation. At the early, seed stage most of the financial environment wants to encourage entrepreneurs, especially if you’ve got a good idea and can prove it in a lab. If, and when, you reach the final destination, chances are you’re already commercial and have a value proposition that the market accepts because you’ve proven your technology and are usually scaling up at that point. Then, arguably, the benefits come, which is very attractive for investors. It’s the middle part, the ‘mind the gap’ challenge, that makes or breaks the journey.”
Stuck in the middle?
“Here you need capital in order to do two things: to take your proven technology out of the lab and into a production facility, which costs money over a long trajectory. This is not set up for private equity (the later stage) or venture capital (early stage). This is where a different solution has to be found: government or non-dilutive subsidy grant funding together with investors. It has to be a combination of the two, otherwise scale-ups will stall because they run out of cash, financial runway. It’s a catch 22.”
Collaboration is key
Bram Ledeboer of SHIFT Invest (impact venture capital fund) shares the sentiment. “Scaling up requires significant capital and it’s hard to come by. What’s needed is a funding mix where regional and national government can generate leverage and provide risk-reducing instruments to encourage other financiers and also corporates to embrace engagement with startups and scale-ups.” A point not lost on Anieke. “Startups can get into in the fast lane, but without collaboration with corporates and retailers, which is essential to getting products to market, they will slip into the slow lane. What is actually needed is a really concerted effort by government, business and knowledge institutes – the so-called triple helix – to get financiers and investors on board so that these startups can move on to the next phase. And a conviction that these innovative startups can deliver the food and agri innovation that is needed for a more sustainable and circular economy.”
Opportunity for the taking?
Both Bram and Sue cite the lack of government investment. “You have to look to foreign investment,” Sue says. “The minute that you have to put steel in the ground, it becomes much more difficult in the Netherlands.” Bram agrees: “In France the government puts capital into scale-ups at even at plant level, which lowers the risk for everyone involved. We need that here to level the playing field.” Paradoxically, the Netherlands is so well placed to ‘play’ in this field, given its history and background in food and agri: the capabilities of a world-leading research in Wageningen with a link into industry – Unilever, FrieslandCampina, giants in the food space. “It’s got all the talent and R&D capability to create a cohesive ecosystem, like Singapore or Israel. An ecosystem that brings businesses together, startups and scale-ups, as partners in accelerating progress,” Sue says. “Unfortunately, the establishment of InvestNL, to put an instrument in place to level things up, is faced with such a restrictive governance charter written into investor law that they can’t be seen to take the role of a market or a commercial investor. Somehow, we’ve got to find some instruments that will play together to enable a scale-up to get the capital it needs, and to be able to access that capital in a timely fashion. That gap keeps me awake at night.”
Vibrant network
How this gap could be bridged was the theme of a recent workshop to chase the dream of the Netherlands becoming a globally recognised ecosystem with shared resources where all stakeholders support each other in driving positive change in and with food & agri. “We said, hey, let’s identify the 20 companies that could become heroes. The next ASML in the food business. By 2030,” Anieke says. Eleven of those 20 companies took part to define what “the Netherlands needs to become the world leader in food & agri by making innovation happen: with government support, funding, industrial partners, startups.” The aim is that by 2030, the Heroes initiative will become a vibrant network with quality interactions, including small and large organisations, attracting talents and facilitating learning as well as access to resources (talent, funding, facilities).
Tell your story …
High profile and visibility early on, Sue suggests, is the trick. “Make sure that you’ve got technology that looks interesting, is smart and intelligent. A well explained and proven technology solution enables you to have a very strong proposition. And use every opportunity to tell your story, look for all of the options that are available and open, whether it’s money or small grants for innovation that are open to entrepreneurs.” Such as Meatless, founded by the son of a butcher, that successfully scaled up the production of plant-based ingredients for the vegan, vegetarian and meat industry. Bram: “We believed in and invested in this transition. I think that if you can profile and showcase such successes, this can be really inspirational for others to follow suit.”
… and join up the dots, together
For investors food and drink may not be such a glamorous proposition but without them, the human race won’t survive. “It’s a useful reference point to our governments, I think, to consider the basic needs of human beings,” Sue points out. “It’s critical that we join up the dots.” Anieke is keen to get people around the table and understand what the best investments options are. “We’ll try to get European funding for this entire initiative so that we can also offer training support, ensure continued funding and do the necessary IP, regulatory and financial administration. And, of course, tell the story. Lots of ideas and initiatives followed up with good solid events and actions. Foodvalley can take on the orchestrating role but we need the public authorities, businesses and research institutes all on board to make it work.”
Winning ecosystem
Foodvalley wants to act as a practice leader to build a coalition and create a winning ecosystem. Anieke explains. “To create coalitions that enable the transition to a sustainable agrifood system, one that puts and keeps the Netherlands in the lead in that transition. One in which our heroes are the demonstrators of the value and success of this ecosystem. Valorising the proposition and showing investors that the food & agri sector is full of opportunity. We should be proud of our Dutch heritage and share our ambition. The more heroes we have, the more financial muscle we can attract and the more commercial traction we can get. By combining forces, and making one agenda, we can boost the profile and visibility for all in terms of funding and market.”
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