Transforming a Tired Food or Beverage Category

The food and beverage sector is a hotbed of innovation, a big reason why investors have flocked to it in recent years. Even now, as the nation continues to weather the COVID-19 storm, there are new and interesting SKUs hitting the market every day. With consumers demanding more nutritious, natural, transparent and sustainable products, and with technological advances enabling more precise formulation, brands can score big with truly differentiated offerings.
But here’s a fun fact about food and beverage innovation: Although Nestlé, General Mills, PepsiCo and the like have deep pockets to pump into R&D, the biggest breakthroughs and category disruptions often come from scrappy upstarts. Big Food knows this, which is why many strategics now look to small independent brands to do the bulk of the innovating, before buying them up to broaden their brand portfolios. This means it’s possible for any entrepreneur with a unique recipe, novel mission or out-of-the-box idea to create a food or beverage that’s truly transformative—and profitable.   
Here’s another fact about innovation in this space: It’s concentrated to certain categories. Take nutrition bars, for example. There are now a gazillion of them, with high-quality options tailored to every dietary specification under the sun. Plant-based meat alternatives is another area bursting with innovation right now. There’s a lot happening in ready-to-drink functional beverages as well.
Now, just because a category is currently rife with innovation does not mean it can’t use even more—there is always room for disruption. But it does usually mean that a category will be crowded and/or tricky for startup brands to penetrate. It’s tougher to make a real splash with a new product when there are countless other new options for consumers to choose from.
For these reasons, it may be wise for entrepreneurs to look beyond the big innovation areas to categories that haven’t changed much in recent years. Grocery stores are full of sections that feature the same brands as 10, 20 or even 50 years ago—or the same types of products, or the same basic packaging. We often take these categories for granted, thinking they’re immune to evolution or closed to innovation, when really it’s just that nobody has shaken up the status quo. There could be an untapped opportunity for the right brand and product to turn the category on its head.
This is exactly what Scout Canning is doing in canned seafood, which, talk about a tired category! It’s tuna, tuna and more tuna—just like in the 1960s—none of it particularly sustainable, traceable or trustworthy. Recognizing this, co-founders Adam Bent and Chef Charlotte Langley become compelled revitalize this stagnant space and align it with the values consumers care about today. As Adam explains in the latest Edible-Alpha® podcast, this means getting Americans eating more shelf-stable seafood by introducing them to different responsibly sourced species. In just a short time on the market, Scout Canning has succeeded at making a stodgy category sexy.
Other categories may offer similar opportunities to upend the same-old-same-old and inject new life. This could be done through unique ingredients, a new delivery format, more sustainable packaging or impactful branding, for instance. By examining and then questioning how things “have always been done” in stagnant categories, entrepreneurs may just unlock the door to game-changing innovation.  

Important Updates from FFI We’re hiring a Farm Outreach Specialist in collaboration with the Wisconsin Small Business Development Center. This experienced individual will help grow and finance farm businesses across Wisconsin. Find the posting hereApplications due August 14. Calling Wisconsin businesses! Apply for the FFI FaB Wisconsin Accelerator here. This excellent nine-month program builds the capacity and capitalization of food and beverage companies, positioning them for sustainable success. Applications due August 21.

And now, our roundup of the best food and beverage finance news, events and resources from around the web…

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National Wholesale BrandsCPG/National Brands

Grocery Store Produce Section Market Trends

Regenerative AgricultureFarming and AgTech

Mergers And AcquisitionsDeals/M&A

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