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  • Writer's pictureMeyrick Consulting

The Wrong Investors in the Food and Ingredients Industry

The wrong investor will demand fast returns, place your business under pressure and leave you feeling like you're forever working for them.

The secret lies in finding the right investor to boost your growth in the food and ingredients industry. With their expertise, connections, and smart guidance, the right investor will help you turn your great ideas into reality and make a lasting impact in the food industry.

So, let's explore how the perfect investor can help your startup stand out and succeed in the world of food and ingredients.

The Dynamic Duo...

Venture capitalists (VCs) are the superheroes of the startup world, swooping in to rescue promising businesses with their financial muscle and savvy business acumen. VCs have a knack for spotting potential in innovative ideas and injecting them with the lifeblood they need to flourish.

Venture capitalists don't just throw money at your business and walk away. They're often in it for the long haul, offering invaluable resources like mentorship and strategic connections and a plethora of knowledge and advice to help your startup reach its full potential.

Strategic Guidance...

When you bring on an investor with a wealth of experience and knowledge, they can help navigate the often complex business world and lead to rapid business expansion. In 2021, a whopping $13.1 billion was poured into these innovative food and food tech enterprises, showcasing a growing appetite for ground breaking food ventures.

And whilst this all sounds positive, what is lurking under the cover of darkness?

VCs dipping their toes into the food and ingredients waters without an understanding of what lies beneath can be fatal to a company.

Although, an experienced VC firm should always be the first choice and one that has a deep understanding of what it means to operate in the food and ingredients industry contain the real gold.

Credibility And Trust

When you find the right investor, it's like pairing the right mentor with a promising student - everything just comes together. For example, when Oatly secured investment from the Blackstone Group, it wasn't just about the cash infusion.

The investment signaled to the world that Oatly was a serious contender in the alternative dairy market, boosting its brand credibility and trust. It's the kind of endorsement that turns an unknown startup into a household name faster than you can say, "Another round of funding, please!"

Expertise And Experience

The right investor brings valuable industry knowledge and experience. They can help to fine-tune product offerings, navigate regulations, and optimize business operations. For example, Nestlé's investment in Freshly helped the meal delivery service of Freshly expand its menu and improve its offerings, leveraging Nestlé's extensive industry expertise.

Strategic Connections

A well-connected investor can open doors to new partnerships, customers, and suppliers, offering a significant advantage in the competitive food and ingredients industry. Foodbytes by Rabobank is a good example of a platform that connects food and ingredient startups with an extensive network of investors, industry experts, and fellow entrepreneurs, providing access to valuable connections and resources.

Mentorship and Advice...

You know what they say, "Too many cooks spoil the broth!" But when it comes to venture capitalists, their seasoned expertise can be the perfect garnish for your startup's success. VCs often bring a wealth of industry experience and a knack for a strategy that can help startups navigate the ever-changing food and ingredients landscape.

Becoming an Operational Ninja...

According to a study, 70% of startups attribute their success to operational support from mentors. Whether improving the supply chain, streamlining manufacturing processes, or ensuring top-notch food safety standards, having an investor that is invested in the founders as much as the business itself is like having a team of expert sous chefs on side, slicing and dicing their way to a more efficient business.

Next Level Marketing...

Take a look at Impossible Foods. Initially, they were just another plant-based meat alternative startup. However, after receiving the backing of heavyweights like Horizons Ventures and GV (formerly Google Ventures), their marketing game went from "meh" to "mouth-watering" in no time.

Final Thoughts

The prospect of closing out $millions in funding is just a pipe dream to many and no doubt most would grab at the cash without a second thought if they were offered. But this week, I'm asking founders to think twice.

Years we have worked alongside VC and PE firms in helping them build out the leadership teams of their thriving portfolio companies in the food and ingredients industry. There are indeed specialists in this space that can help a business soar.

But, on the other hand, there are organisations that will give you their money, then demand it back when things get a little rocky - leaving businesses without a paddle.

Attracting the right investor in the food and ingredient space is a game-changer, akin to discovering the secret sauce for success. With their financial support, industry expertise, connections, and guidance, the right investor can help your startup rise to the top. But getting in bed with the wrong investor can be one of the worst decisions a company will make.

Find the best executive leaders with Meyrick Consulting...

Meyrick Consulting carry out deep talent mapping, globally, to ensure our shortlists contain only the very best executive leaders. We help to drive your organisation's next stage of growth and transformation in the food and ingredients industry.

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