Best Practices for Food Startups in a Crisis

Since its outbreak, COVID has left a long line of struggling businesses, closed restaurants and stranded fundraising rounds, the midst of this global crisis will have a deep effect on every facet of our society and economy. As we weather through these tough times startups, founders  and entrepreneurs are trying to charter their companies and teams through these disrupted waters and through this extreme uncertainty we at Food Entrepreneurs want to pool together our knowledge and learnings from across the startup ecosystem to help you out.

Here are the 6 best practices for food startups in a crisis:

Image courtesy of Farmstead

  1. Innovation is key – Farmstead, USA

Re-adjusting operations may be necessary, even for a small time. Many startups will have already completed their business plans for the year ahead but since the outbreak threatened to tarnish these plans, many are being forced to re-evaluate or even start over on any growth plans they had for the next year. Many companies are investing in technology to help them out the sinkhole – local grocery delivery service Farmstead only delivers to a small area in San Francisco, but has struggled to keep up with demand since the outbreak.

Thankfully, the startup has a secret weapon: an AI-powered inventory management system, which allows the team to build microhub distribution centers in the areas it delivers to. The hubs are driven by algorithms that ensure each center has enough stock, or just enough to prevent food waste.

Image courtesy of Wolt

  1. Move with the trends – Wolt, Finland

Expect to see several emerging food and beverage trends change course as consumers demands and needs shift during covid19. It’s important to remember to plan not only for the current situation, when people are in their homes, but also for after the pandemic. What changes will there be in consumer habits? What new trends will emerge?

Prior to the pandemic outbreak meal-kit delivery service Blue Apron was on its last legs, the company’s shares had plummeted 98% since its public offering in 2017. Now, with so many consumers practicing social distancing meal kits, grocery delivery services and other subscription-based companies are experiencing unprecedented spikes in demand.

A number of foodservice enterprises are turning to contactless delivery as a way to retain some cash flow during these turbulent economic times. Finnish brand Wolt, a company that delivers food from restaurants directly to your doorstep, has jumped on the contactless delivery bandwagon as increasingly more consumers look for “safer to eat” options.

Image courtesy of Fruvii

  1. Social responsibility – Fruvii, Colombia

As the role of business in society continues to evolve, corporate innovation is becoming increasingly important. It encompasses the many ways that businesses can have a positive impact, especially during a crisis.

Colombia-based app Fruvii, a social venture that helps small-scale farmers to commercialize their produce at a fair price. All through their app; @fruvii_colombia. According to the founder, the country’s small agricultural producers produce essential foodstuffs in rural areas, far from the urban centres where most of it is sold. However, their work is often undervalued, especially at times like this, and they lose a lot of profit through intermediaries. The fruvii app is a social experiment – to tackle this issue and to offer a free app for which home orders can be made for more than 150 products from Colombian rural farmers.

Image courtesy of Gophr

  1. Adapting to new logistics – Gophr, UK

    The ability to get goods where they need to be has been severely disrupted and for startups dedicated to logistics startups, this involves a radical transformation of their operations.UK-based Gophr, a delivery network that works with SME´s and apps like Deliveroo and Airbnb and is usually dedicated to transporting goods and large food orders – has found their b2b demand has significantly shrunk. The company has therefore pivoted to deliver pharmaceuticals and bio-samples for pharmacies and medical companies in order to stay in business.

Image courtesy of Farmshelf

  1. Rethinking the food supply – Farmshelf, USA

A global pandemic has revealed just how out of whack our food supply chain can be: panic buying and stockpiling has made us all reconsider the way that food is produced and distributed. Is it time we had access to independent food supplies when there are breakdowns in the global system?

Farmshelf, the vertical farming company that´s best known for outfitting restaurants with high-tech indoor farms has unveiled its first-ever consumer-facing product; branding it Farmshelf home the new model will allow people to grow fresh greens and herbs in their homes with the help of a remotely monitored, smart hydroponic system. It’s roughly the size of a bookcase and uses a combination of sensors and cameras to automatically deliver the correct levels of water, light, and nutrients to each plant growing within the farm. It’s the perfect example of a company rethinking the food supply in a crisis.


Image courtesy of Allset

  1. Controlling finances – Allset, UK

It´s important to remember that financial outcomes during this time are also dependent on your macro environment. Analyse the resources you have in hand and look at the big picture: will those resources keep you going for the next six months? The startup ecosystem is feeling the ripple of the effects from Covid19. In the US in Q1’20, venture capital deals fell 16% compared to 2019, not directly, but likely due in part to the Covid-19 pandemic.

This doesn’t mean financing is impossible. Dining startup Allset recently raised $8.25 million in series B funding. The young companies CEO admitted that the initial plan was 12 million but said they were lucky enough to finish the round as it was, some investors even disappeared mid-round. Advice? Start planning your next fundraising round early. Not because it will raise you more money, but because it will probably take longer to close. Investors won’t stop investing, but the sums of money raised will be smaller and funding rounds may be longer than usual.

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