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Use These 3 Strategies for Your Food Startup to Stand Out and Take Off If you're building a food startup, take these tips into consideration.

By John Haugen Edited by Jason Fell

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Opinions expressed by Entrepreneur contributors are their own.

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After Beyond Meat's historic IPO, I've been reflecting on what makes a startup heat up and take off. Every year, we see hundreds of innovative new entrants into the food and beverage category that "wow" consumers, investors and big brands. These startups are attracting significant investment from traditional venture capital firms and, increasingly, big food companies looking to develop great young brands.

From 2013 to 2018, food and beverage startups raised $9.5 billion across 2,100 deals globally. And it's safe to say that larger food and beverage companies have officially entered the venture capital game, with $1.08 billion invested across 99 deals in 2017 alone.

Despite all the great talent out there and historically low retail barriers to entry, the hard truth is that many of these companies will fail.

Related: The Digest

So what separates the successful food and beverage ventures from the ones that don't make it? That's the multi-million-dollar question, but there are a few consistencies that I've observed that can turn a food idea into a scalable brand with opportunities to grow and reach millions of households around the world. By inputting passion and outputting remarkable solutions, being flexible and partnering wisely, food startups have a chance to beat the odds.

1. Input passion, output remarkable solutions.

When is the last time you went to an average restaurant and told your friends about it? Probably never. In the incredibly dynamic food and beverage space where you can find 300 yogurt varieties on the shelf and consumer tastes change in the blink of an eye, you've got to have a remarkable product. Standing for something often helps you stand out from the crowd. Passion, or even a personal obsession, with solving a problem is what sets entrepreneurs apart from big companies.

Take Daniel Katz, founder of No Cow, who likes to eat protein bars after his workouts. The problem was that he had a dairy intolerance, and all of the dairy-free protein bars were way too high in sugar. So, at 18 years old, he decided to found a company and create his own solution -- a dairy-free bar that had 20 grams of protein and only 1 gram of sugar -- to give him the post-exercise energy he needed. His passion for fitness and obsession with finding a dietary solution resulted in an incredible product.

Or take Ethan Brown, CEO of Beyond Meat. He believed there was a better way to feed people and the planet than what the meat industry was providing, and he became fixated on building "real meat" directly from plants. You can now find his meat alternatives in thousands of stores around the country.

These founders are succeeding because of their incredible passion for fueling their bodies in new and improved ways. The result: remarkable products that filled the appetite (literally) of like-minded communities and met consumer needs.

2. Expect to fail, but do it fast, and be flexible.

Even the most successful food companies have failed. That's not to say they went out of business, but they may have grown too quickly, distributed through the wrong retail channel or strayed too far from their visions. For successful startups, failure is the beginning rather than the end, inspiring out-of-the-box thinking and creative problem-solving.

What counts is how a founder leverages that failure as a learning to mature as a company -- like how Elizabeth Stein, founder and CEO of Purely Elizabeth, pivoted from muffin mixes to granola; how Rob Leibowitz, CEO of Kite Hill had to make a hard business decision to discontinue a beloved product; or how Scott Jensen, co-founder and CEO of Rhythm Superfoods went through a company name change.

Maybe the product meets the needs of consumers but doesn't taste right. Or it tastes great but can't scale because of a poor cost structure. Failures like these have driven founders to tweak and change until they hit the perfect balance, whether it's a new recipe, a different distribution strategy or updated packaging. But changes such as these need to happen fast. There's no virtue in doubling down on failed strategy. The trick is to fail, learn and try the next thing, all with an eye toward getting to the next stage.

Related: Kristen Bell and Her Cofounders Built a Company to Save Lives. But Growing It Wasn't So Simple.

3. Partner wisely to accelerate success.

A food startup does not reach the finish line by securing venture capital investment alone. Funding can be necessary (and relatively easy to come by these days), but it alone does not drive success. It's important for entrepreneurs to be thoughtful when choosing partners and ensure that their goals are prioritized.

The right set of partners and advisors will encourage a founder, open doors (figuratively and literally in the form of grocery retailers) and keep an entrepreneur honest. Good partners will help solve problems and stand ready to ask the most important question: "How can we help?"

Talk to potential partners and find out how they will contribute to your business beyond investment dollars. Don't be afraid to ask questions about their experience with other startups. A good partner isn't just there to question numbers; she or he is there to help solve big problems and support your vision. Don't think venture capital, think venture capable.

Lastly, let's ask yourself what success looks like to you? A lot of people tend to get caught up thinking about getting "big," either pursuing a lucrative exit or worrying about losing their soul. Stay focused on delivering your vision, even as you scale. It's a subtle but powerful way to help keep you on track, no matter where you are in your growth journey.

John Haugen

Founder and Managing Director of 301 INC

John Haugen is founder and managing director of 301 INC, the venture capital business unit within General Mills that invests in and partners with emerging food brands to help them grow and scale. John is responsible for leading a team operating as entrepreneurs to help new brands thrive.

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