June 9, 2016
Amy DiBianca and Sara Williams-Curran – Image: Leaf & Love
What makes a food startup work?
By Knowledge@Wharton staff
Presented here for discussion is a summary of a current article published with permission from Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.
Two years ago, two California moms, with no history of entrepreneurship, confronted the fast food world with a startup featuring organic, sugar-free lemonade for kids.
Amy DiBianca and Sara Williams-Curran were long frustrated by the high-sugar content in juices offered their children at social gatherings and soccer practices. But in 2013, the problem became life altering when Ms. Williams-Curran learned her then-three-year-old daughter suffered from Type 1 diabetes. Run out of the house while they juggle caregiving and careers, Leaf & Love Organics sells lemonade to high-end northern California markets and Whole Foods stores in the Southwest.
While benefiting from trends toward local and fresh, a limited marketing budget forced Leaf & Love to try to distinguish itself through grassroots campaigning. Partnerships with Juvenile Diabetes Research Foundation, Childrenwithdiabetes.org and Insulin for Life were formed. The company claims the product is the only organic, sugar-free lemonade for kids.
“You have to convince consumers and retailers that this is a worthwhile product,” Gary Hemphill, managing director of research at Beverage Marketing Corp., said. “You’re making this argument against a sea of other products that are constantly flooding the market.”
In other words, it’s not enough to have a quality product and master the kitchen-to-grocery store delivery system. The effort has “multiple interdependencies with health and sustainability and social equity, politics, safety, medicine, nutrition, public health – food touches all of these fields,” points out William Rosenzweig, Republic of Tea founder and dean and executive director of the new Food Business School at the Culinary Institute of America in northern California.
Serendipity led to Leaf & Love’s initial distribution deal. Originally selling through Fulfillment by Amazon, a chance meeting with a broker led to an introduction to an Amazon buyer, who struck a deal to buy the lemonade directly.
The women remain committed ever as they begin to understand the complexity of the beverage industry.
“A certain amount of ignorance is great,” Ms. DiBianca said. “You don’t spend all your time focused on the disasters in your life. It’s not part of your education — why it won’t work. It’s about balancing some of that optimism with gumption and audacity.”
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Discussion Questions
DISCUSSION QUESTIONS: What advice would you have for food startups? Do you see lessons among good-for-you, local food in finding new ways to establish distribution?
Poll
Being from Minneapolis, Minnesota — a “bread basket” state — I’m biased. I think food startups should base their operations in a market like ours that has a variety of options for partners/money in the “future of food” space. Here in Minneapolis we have both Target and Supervalu looking at food innovation from the retail perspective. From the manufacturing side, we have General Mills, Cargill, Land ‘O Lakes and others, all with food labs and incubators. And we have serial entrepreneurs in food who are now helping other food startups, like the Food Building.
Far more start ups have failed than have succeeded, for sure. This is a crowded market, to say the least. No one should go into this world with too high of expectations for short-term positive results. There is hard work and long hours required in the vast majority of the success stories out there. The keys, in chronological order are: 1) Ensure your idea is as unique as possible, 2) Try to make it as difficult to copy as possible, at least in the short-term, 3) Craft a real business plan. One that includes a revenue projection, profit trajectory, etc., 4) Gut-check your idea, 5) Define your market, 6) Develop and/or confirm your contacts in the industry. You need awareness of your brand to create demand. Don’t be naive.
Excellent topic, as the foodies of the world are all scrambling to try to find the newest healthy food to eat. It takes talent, perseverance, a trusting partnership, a lot of traveling to food festivals, the right location, help from government to build your start up, and definitely some luck. Other than that it is a piece of cake. I have great respect for start up foodies, as this is a difficult game to get into, and the product must stand out, and also be earth friendly and non GMO, otherwise it wouldn’t work in today’s finicky environment.
Kudos to all who create great foods and manage to get them onto the shelves for all of us to enjoy.
Type 1 diabetics need sugar for soccer practice. Hypoglycemia can be a life-threatening condition.
Many start-ups fail so this is not a venture for the faint of heart. However, there are many different taste, health, and nutrition demands among consumers. Finding a need not being met, as the sugar-free lemonade did, is essential. Then finding someone knowledgeable to offer advice, ideas, and/or connections is really helpful. Then it takes hard work.
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Being from Minneapolis, Minnesota — a “bread basket” state — I’m biased. I think food startups should base their operations in a market like ours that has a variety of options for partners/money in the “future of food” space. Here in Minneapolis we have both Target and Supervalu looking at food innovation from the retail perspective. From the manufacturing side, we have General Mills, Cargill, Land ‘O Lakes and others, all with food labs and incubators. And we have serial entrepreneurs in food who are now helping other food startups, like the Food Building.
Far more start ups have failed than have succeeded, for sure. This is a crowded market, to say the least. No one should go into this world with too high of expectations for short-term positive results. There is hard work and long hours required in the vast majority of the success stories out there. The keys, in chronological order are: 1) Ensure your idea is as unique as possible, 2) Try to make it as difficult to copy as possible, at least in the short-term, 3) Craft a real business plan. One that includes a revenue projection, profit trajectory, etc., 4) Gut-check your idea, 5) Define your market, 6) Develop and/or confirm your contacts in the industry. You need awareness of your brand to create demand. Don’t be naive.
Excellent topic, as the foodies of the world are all scrambling to try to find the newest healthy food to eat. It takes talent, perseverance, a trusting partnership, a lot of traveling to food festivals, the right location, help from government to build your start up, and definitely some luck. Other than that it is a piece of cake. I have great respect for start up foodies, as this is a difficult game to get into, and the product must stand out, and also be earth friendly and non GMO, otherwise it wouldn’t work in today’s finicky environment.
Kudos to all who create great foods and manage to get them onto the shelves for all of us to enjoy.
Type 1 diabetics need sugar for soccer practice. Hypoglycemia can be a life-threatening condition.
Many start-ups fail so this is not a venture for the faint of heart. However, there are many different taste, health, and nutrition demands among consumers. Finding a need not being met, as the sugar-free lemonade did, is essential. Then finding someone knowledgeable to offer advice, ideas, and/or connections is really helpful. Then it takes hard work.