How can food start-ups overcome challenges of

scale-up?

William R. Aimutis, Ph.D.

Executive Director

June 18, 2019

70

Food Tech Deals in 2018 5,470

Commercial Companies filed Chapter 11 bankruptcy in 2018.

35,000

New CPG Products / year

516 Million

Dollars invested in New Food Tech Companies in 2018

Challenges Experienced by Startups (and ultimately their potential failure)

Neglecting Marketing and Sales

Finding the Right

People

Push Outside

One’s Comfort

Zone

Lack of Planning

Weak Cofounders

Lack of Cash

Lack of Mentor

Competition

Scaling Up

Time Mgmt

What Causes Food Startups to Fail

The Bottom

Line

Limited

Access to

Market

Insights

Essential

Brand and

Design

Mistakes

Underfunding

& Business

Model

Failures

The Route to

the Market

The Product

Development

Process

10

103

102

106

109

Rel

ativ

e #

Un

its

Kitchen ”Accelerator”

Pilot Plant

Contract

ManufacturerBrick & Mortar

Rel

ativ

e In

vest

men

t

Lev

el, (

$M)

Manufacturing Scale

What Stage Is Your Business In?

Bu

sin

ess C

om

ple

xit

y

Kitchen

Commissary

Kitchen

Pilot Plant

Contract

Manufacturer

”ingredients” from

refrigerator and

cupboard

Selling at farmer’s

markets, bazaars,

etc.

“ingredients” in bulk

(50 # bags)

Selling still at local

farmer’s markets or

small, local grocer

Not concerned

about yields and

production efficiency

yet

Small amount of

gross margin

No SGA

Formula developed

using commercial food

ingredients

Preparing to approach

investors for money

Need to run clinical

trials

Need to optimize

processing

Identify yields, shrink,

and efficiency

Team forming

Identifying target

audience

Advanced labeling

Regulatory challenges

Money, money, money!!

Contracts

Volumes

Supply chain for raw materials

and ingredients

Manufacturing friendly formula

Optimized packaging

Sales projections

Process and equipment optimized

QC/QA and product quality

Sales channels identified

Shelf life

Target audience

Advertising

Slotting fees

Freight

Recall procedures

Out of date returns

Reasonable Locations to Bridge the Zone of Despair

Rutgers Food

Innovation Center

Oregon State Univ.

Food Innovation

Center

NC Food Innovation

Lab

UGa Food and

Product Innovation

Center

Ohio State Univ.

Food Innovation

Center

Mich State Univ. Food

Processing &

Innovation Center

Texas A&M Process

Engineering R&D

Center

UC-Davis The Food

Science Lab

U. Nebraska Food

Innovation Center

Agri-Food Innovation

Centre, Saskatoon

IIT Center for

Processing

Innovation

From Raw to Processed

Traditional ProductsRaw Commodity

Sliced, diced, pureed, sauced,

brined, jams, chutneys, fruit

butters, etc.

Innovative

Ingredients and

processed foods

Extraction, purification, and

refinement of natural colors,

flavors, bioactives, proteins, and

oils

We offer group sessions using JOBS to be Done and proven innovation disciplines to create new product ideas

Ideation

We have industry experienced food scientists on staff to develop formulas ready for production.

Product Development

We have a professional photographer assisting with still shots and video to develop product brochures and websites.

Food Photography

TYP

GMP

2

GMPFILLING

1 RESEARCH PILOTPLANT

GOWNING &MATERIAL

CONFROOM

DIRECTOR'SOFFICE

OPEN

OFFICE

DRYERROOM /

PACKAGINGEXTRACTION

ROOM

COLLABORATION

SPACE

PROCESS

SPACE

WASHROOM

WEIGH/

DISPENSE

STAGINGQA / QC LAB

DATARM

COLD ROOM

FREEZER

FREEZER

COLD ROOM

STORAGE

WORKSHOP

FREEZER

COLDROOM

PANTRY

<< RAMP

<< RAMP

STORAGE

PD LAB & TEST KITCHEN

FINISHED GOODS

FINISHED GOODS

RAW MATERIALS

RAW MATERIALS

RE

TO

RT

STEAM

SYSTEMSTEAM KETTLES

TCM

HOMOGENIZERS

BLANCHER/

COOLER

SEAMER

HOOD

HOOD

DIC

ER

MIXERPEELER

CE

RE

AL

MIL

LIN

G

MOBILEMINOR

DRUM

DRYER

FREEZEDRYER

EXTRACTION

UNIT

HOOD

HOOD HOOD

HOOD

STORAGE

COLLABORATIONSPACE

DW

RECEPTION/ WAITING

18 19 20 21 221716151413

C

D

E

F

G

H

G.5

C.5

J

D.7

E.1

E.9

F.3

North Carolina State University

Food Processing & Innovation Center

Kannapolis, NC

August 7, 2018

PRELIMINARY LAYOUT - OVERALL

SCALE 116" =1'-0"

SEE ENLARGED PLAN - AREA 1

SEE ENLARGED PLAN - AREA 2

SEE ENLARGED PLAN - AREA 3

NCFIL operates pilot plants with Food Safety Management Plans and cGMP guidelines.

Pilot Plant Production

Consulting and training services are available to food entrepreneurs and companies at their location if needed

Consulting & Training

Sensory services at our Raleigh campus allow companies to optimize their product offerings before launch.

Sensory

North Carolina Food Innovation Lab

Last Thoughts…As You Prepare to Launch New Products

1. Solve real problems - What Jobs Need To Be Done

2. Utilize a proven product development process

3. Align on key assumptions from the beginning

4. Insist on impassioned coordination with all stakeholders

5. Develop a long range product roadmap – identify subsequent generations and adjacencies

6. Have an appropriate product launch cadence

Contact:

Dr. Bill Aimutis

Executive Director, NC Food Innovation Lab

Kannapolis, NC

Phone: (704) 250-5491

Thank you!

A Unique cGMP Facility Focused on Plant-Based Foods

• Provide state of the art facilities to promote new plant-based product and technology development, validation and commercialization

• Engage in applied research and development that translates to consumers and markets

• Deliver unique and relevant plant science and food science training to promote workforce development, entrepreneurial growth and industry engagement

NC

Food

PIC

Food

Industry

Equipment

Manufacturing

Food Ingredient

CompaniesNC

Entrepreneurs

NCRC

University

Partners

NC State

Faculty

NC

FIL

Pilot Plant Capabilities

Washing, sorting,

blanching, peeling

Slice, dice, macerate,

press, juice

Processing kettles and

tanks

Basket centrifuge

Basket centrifuge

Retort (several package

configurations)

HTST/UHT Thermal

Processor

Continuous Flow

Microwave Processor

Vacuum Pan

Swept surface heat

exchanger

UV Pasteurizer

Twin screw extruder

Supercritical CO2 Extraction

Solvent extraction

UF/DF/MF/RO membrane

filtration skid

Ultrasound skid

Rising film evaporation

Cold Press oil extractors

Spray drying

Tray freeze dryer

Microwave dryer

Convection oven

Dual Zone tray

dehydrator

Milling

Particle sifting

Blending

Various

packaging

configurations

Applications

Beverage – still,

fortified, alcoholic

Bakery – nutrition bars,

breads, sweets, and

other traditional baked

goods

Confectionery – fillings,

coatings, panned

Sauces – sweet and

savory

Prepared meals – vegan

and vegetarian

refrigerated and frozen

finished products and kits

Snack foods –

extruded and

seasoned (by 2021)

Meat-analogues (by 2021)

Cereals and pastas

(by 2021)

Product Development

(plant-based)

capabilities