By Andrew Cohen
COVID-19 has ravaged the economy and exposed trouble spots in our food distribution, including a vulnerable supply chain for animal meat. In doing so, the pandemic has elevated the profile—and promise—of the budding foodtech industry.
UC Berkeley is a hotbed for incubating innovative food companies, and the law school’s Berkeley Center for Law and Business has helped cook up a satisfying niche for foodtech entrepreneurs through its FORM+FUND and Venture Capital Deal Camp programs.
“We’ve seen a lot of investor interest in this space and COVID-19 is emphasizing the need for food sources that rely less on traditional supply chains,” says Adam Sterling ’13, the center’s executive director. “Our training focuses on the legal, financial, and operational aspects of starting and scaling a business, and it’s exciting to help these Berkeley companies bring their product to market.”
The burgeoning industry aims to improve the quality, accessibility, and scalability of food through scientific understanding and healthy, sustainable products. Public awareness of traditional meat production’s environmental impact has risen in recent years—with a correlating demand for plant-based alternatives and new options from regenerative animal agriculture.
In doing so, foodtech entrepreneurs foresee a more reliable distribution model that increases efficiency and mitigates environmental harms.
UC Berkeley plant biology Ph.D. Siwen Deng teamed with undergrad Jessica Schwabach to launch Sundial Foods in summer 2019. They met in the university’s Alternative Meats Lab, where students identify and solve industry challenges by creating their own innovative products.
Deng and Schwabach incorporated the company after taking a second FORM+FUND class, and filed a provisional patent surrounding its novel process earlier this year. Currently participating in a five-month accelerator program in Switzerland, Sundial Foods is ramping up production for an eight-week test launch in the Swiss market—and will soon launch in the U.S.
“We founded Sundial Foods out of a passion for the science behind our concept,” Deng says. “But as we continued to learn more about entrepreneurship and starting a company, we quickly realized that we were in over our heads in many matters, as neither of us had any prior business-related experience.”
After connecting with the university’s startup community through programs, training sessions, and events, they decided to incorporate and contacted Startup@BerkeleyLaw, which led them to participate in FORM+FUND.
“The program equipped us with knowledge about starting and scaling a business,” Schwabach says. “FORM+FUND’s network, from lecturers to attorneys to investors, has also been very helpful for us. We’ve made many lasting connections with people we met … including our IP lawyers, who helped us file our first patent.”
Prime Roots also sprung from the Alternative Meats Lab. The company grows and uses a Koji super protein (a culture used in Japan to make items such as soy sauce and sake) at the base of its alternative meat and seafood items, and did a small launch of its bacon product in February.
CEO and co-founder Kimberlie Le notes that animal agriculture accounts for about 20 percent of greenhouse gas emissions. Seeking a better way of making protein and meat from sustainable technologies rather than animals, she wanted to learn how to avoid new-venture pitfalls.
“FORM+FUND was a great program that illuminated the legal side of running a startup and taught us things to look out for,” Le says. “It was really useful since there aren’t classes for many of these things and you usually learn on the job if you haven’t done it before. Even if you’ve done it before, it’s easy to overlook the importance of what may seem like small details.”
Le designed and taught a UC Berkeley course on environmental sustainability, and spent three years researching molecular toxicology, microbiology, and legal studies. In addition to COVID-19 expanding consumer interest in plant-based products, she sees it increasing the purchase of food online.
“We’ve been part of both shifts,” Le says. “People are rethinking meat consumption, and seeing how and where meat comes from is getting them to want to try plant-based meat products more than ever.”
Venturing into new terrain
Food System 6 board president Renske Lynde spent two decades working towards food-system change in the nonprofit sector. While at the San Francisco Food Bank, she helped Revolution Foods (led by Berkeley grads) secure a contract with San Francisco’s school district and became inspired seeing entrepreneurs challenge the status quo.
Lynde took part in an angel investing bootcamp, and made her first investment in the space. Through a fellowship at UC Berkeley’s Food Institute, she developed a plan to buoy entrepreneurs beyond what she could do as an angel investor and co-founded Food System 6—a nonprofit accelerator that supports entrepreneurs who want to transform the food system.
Lynde attended BCLB’s popular Venture Capital Deal Camp, a four-day course that helps investors improve their ability to define, negotiate, and execute early-stage investments. While changing the food system requires more funding sources beyond venture capital, Lynde sees ample opportunities to invest in capital-efficient businesses that leverage growing demand for healthy, sustainable food—which she is now doing with her venture fund, 1st Course Capital.
“As we work to rebuild an entire system, we need as many tools in the proverbial toolbox as possible that we can use in support of those aims,” she says. “Deal Camp was personally incredibly challenging but also rewarding as I was able to work through my questions in a supportive, collegial environment.”
Food System 6 recently announced a strategic partnership with Huhtamaki, a multinational packaging company, to run a global startup innovation challenge on circular economy and packaging innovations. The company also recently on-boarded three entrepreneurs-in-residence to lead strategic initiatives on regenerative agriculture and processing infrastructure.
“The industrial food system relies on centralized production and manufacturing processes which are falling victim to many of the problems we’re seeing exposed throughout the value chain, such as increased food waste and conventional meatpacking closures,” Renske says. “We actively support the kinds of businesses whose work is by design more resilient and sustainable.”