Ingredient Suppliers Host Entrepreneur Contests to Help Start-Ups Launch Natural Products

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Fans of entrepreneur-type reality television shows like ABC’s Shark Tank see just how hard it is to get a new product off the ground. Competition in the natural products industry-a market teeming with food corporations and natural-minded, niche brands, alike-is especially fierce. To help promising companies enter this space, several ingredient suppliers are now hosting competitions for natural-product entrepreneurs that invite innovators to devise a unique product concept featuring the supplier’s ingredients. If successful, start-ups get help developing their products from the supplier, while the supplier gets the satisfaction of seeing yet another product touting its ingredients on the shelf.

In February, probiotics supplier Ganeden Biotech (Cleveland) announced its new Probiotic Jumpstart Program. Open to “scientists, entrepreneurs, and inventors with a brand-new probiotic food or beverage concept,” the competition will award the winner with $25,000 worth of product-development support from the company.

What does $25,000 worth of support look like? “We don’t want to necessarily just give somebody a check for $25,000 and say, ‘Congratulations,’” says Mike Bush, senior vice president, Ganeden. “We’re actually going to pay for $25,000 worth of services for whatever they need-package design, prototypes, regulatory counsel, web design, whatever the case may be. We’re going to pay all the bills up to $25,000, plus provide them with the resources.”

Unlike investors on Shark Tank, Ganeden isn’t looking for a stake in the winner. “We’re not taking any equity. It’s not a loan,” Bush says. Instead, the takeaway for Ganeden is adding another customer of Ganeden’s flagship Ganeden BC30 Bacillus coagulans probiotic strain, which has seen much success in functional food and beverage products to date, including Post cereal and tortillas by Mission Foods.

Many of the companies that Ganeden works with began as entrepreneurial start-ups, which let the company see what types of knowledge and resources many of them lacked. “They may not have good regulatory counsel. They may not have good marketing resources. They may not have adequate R&D resources to really take something beyond the kitchen or their small shop and take it to market,” Bush says. “So what we’re going to do, we’re going to provide all those resources: best-in-class regulatory counsel, R&D people, and guidance on safety, efficacy, packaging, and label claims. Because we have all those resources anyway, so we might as well share them.”

“Ganeden’s growth and success has been accomplished by helping hundreds of forward-thinking companies around the world develop and market innovative, first-of-their-kind probiotic products,” said Andy Lefkowitz, Ganeden’s CEO, in a press release. “The future of the food and beverage market is functional foods, and we see this program as a huge opportunity to share our expertise and support the industry by helping others bring their ideas to life and onto shelves.”

The company is now accepting submissions via www.ganedenprobiotics.com/jumpstart, with the winner to be announced at the Institute of Food Technologists’ Annual Meeting and Food Expo in Chicago in July.

In May, plant-ingredients supplier Naturex (Avignon, France) announced its own open-innovation program, called Ingenium. “As part of this program, Naturex will be partnering with new start-up companies whose promising business ideas and technologies may be valuable to the company’s development,” the firm’s press release states. The company says it will offer mentoring on everything from regulatory and legal matters to logistics and marketing, as well as make its facilities, such as its analytical or application labs, available to those selected.

“Start-ups often fail due to limited resources or a clear understanding of the market needs,” says Frederique Carre, media relations manager, Naturex. “Naturex hopes to guide entrepreneurs and support them. Our support may take the form of a small financial contribution or giving access to laboratory equipment, pilot-scale production facilities, or customer and regulatory expertise.” The company says an application link will soon be available on its website, or entrants can contact the company directly. In addition, “in order to widen our perspective, we also plan to engage professional organizations who specialize in start-up and open-innovation screening," Carre says.

These suppliers say they hope to see more of these types of programs in the natural products industry. While these types of contests exist elsewhere, what makes these programs unique is that they offer knowledge and support specifically catering to natural-market entrepreneurs. “Every city has their own incubators, but there’s always some catch. There’s equity involved, or there’s a loan. There’s always a catch,” Bush says. “We wanted to make sure that our program is just, ‘Do, go, and have a successful business and let us know how we can help.’”

“Open-innovation and accelerator programs are not a new concept. Our industry as a whole may be lagging in their use compared to other industries,” Carre says.

“Open innovation is key to our Bright2020 strategic plan,” said Olivier Rigaud, CEO, Naturex, in a press release. “Our aim is to generate 10% sales through new product developments by 2020, and we know that innovation cannot be provided solely by our own research. By crowdsourcing innovation, Naturex can improve customer value, drive advancements across industries, and, last but not least, foster local economic development. We are very proud to be shaping the future of the ingredients industry.”

Also read:

What Challenges Do Food and Drink Entrepreneurs Face? Expert Advice

Jennifer Grebow
Editor-in-Chief
Nutritional Outlook magazine
jennifer.grebow@ubm.com