A decade of scaling startups | 2021-02-02 – Food Business News

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AUSTIN, TEXAS — Epic Provisions, Siete Family Foods and Peatos are among the more than 70 companies that have participated in SKU, an Austin, Texas-based accelerator program for consumer product startups.

Participating brands receive funding in exchange for equity and mentorship from dozens of entrepreneurs, industry experts, executives and investors. The 12- to 14-week program includes a curriculum covering such topics as product development, marketing and branding, legal, finance and accounting, fundraising and operations.

Each startup is assigned a team of five or six mentors with varied expertise to advise the founders. Mentors pay a membership fee to join and receive a portion of equity from each company in the track. That buy-in fosters a deeper engagement among the mentors, said Shari Wynne Ressler, co-founder of the program.

“There’s a passion and sincerity and commitment that a lot of accelerators don’t experience,” she said. “A lot of our mentors end up going forward and staying in touch with the companies for years.”

Launched in 2011, SKU claims to be the first of its kind to focus on consumer packaged goods. Ms. Ressler, an entrepreneurial attorney, drew inspiration from the technology sector to develop a program that supported the local budding packaged food industry. She presented the concept to Clayton Christopher, an investor who previously co-founded Deep Eddy Vodka, Sweet Leaf Tea and Rhythm Superfoods.

Clayton Christopher of SKU“I said, ‘I love the idea and will help you build it,’” Mr. Christopher said. “It’s needed. It’s not out there. There’s a gajillion passionate entrepreneurs out there with great ideas. They just don’t have the 10,000 hours yet, and the best way to accelerate those 10,000 hours is with mentorship.”

The expertise shared by mentors last spring helped Ladybird Provisions founder Sarah Rioux navigate new challenges spurred by the pandemic. Sales of her brand’s chilled functional coffee supplements had declined in grocery stores as the virus ravaged the globe.

“COVID-19 was tough on us like it was for so many, ” Ms. Rioux said. “Because we have a refrigerated product, we had never focused on e-commerce… But then in 2020, we realized the importance of having an online presence.”

She and co-founder Nicole Pinedo quickly developed a direct-to-consumer sales strategy and launched shelf-stable collagen coffee creamers to sell online.

“SKU was that perfect opportunity to learn from people who had been there and done it and knowing that after the program ended, I still had those connections,” Ms. Rioux said.

Brian White, founder of PickleSmash, meets regularly with his team of mentors, who during the program two years ago advised his business on branding and marketing. The core product offering is a pickle-salsa mashup.

“We actually started off as White’s Pickle Salsa and had a very basic label,” Mr. White said. “Throughout that SKU process we emerged as PickleSmash with all new branding, a very sound business plan and different channel strategy.”

During the program, mentors helped Mr. White examine the product formulation, said Jeff Pinsker, an entrepreneur in the toys and games industry and a mentor to PickleSmash.

“We spent a ton of time working on flavor profile,” Mr. Pinsker said. “But we also spent time on what shape the jar should be and where it should be merchandised in the store. Is this a salsa? Is it a relish? Should it be in the pickle aisle?”

The experience led PickleSmash to a successful first fundraising round, a co-packing partnership and expanded retail distribution. The company quadrupled sales the following year.

“The real thesis behind it that still holds true today is the best and brightest entrepreneurs usually don’t have a problem getting capital,” Mr. Christopher said. “What they really want is advice and people who can help open doors for them.”

Each year, six or seven companies are selected from scores of applicants based on various criteria, including traction in the marketplace and “a learner’s mentality versus a knower’s mentality,” Mr. Christopher said.

“The real thesis behind it that still holds true today is the best and brightest entrepreneurs usually don’t have a problem getting capital. What they really want is advice and people who can help open doors for them.” 
— Clayton Christopher, SKU 

The current track kicked off in late January. Product concepts range from premium instant coffee to plant-based gelato to gluten-free granola. One brand offers aguas frescas flavored with surplus or ugly produce. Another features puffed snacks formulated with plant protein and complex carbohydrates.

“Every track becomes bigger with more exciting brands,” said Kyle Banahan, vice president of marketing for Amplify Snack Brands and a SKU mentor. “SKU is becoming a more national presence, and with that it becomes a bigger, more impressive slate of brands.”

Over the past two years, SKU has expanded nationally, with programs popping up in Dallas, Minneapolis and New York. A track supporting minority-owned businesses is launching soon.

“The quality of mentors sets us apart,” Mr. Christopher said. “It’s almost like saying, ‘What if I could get a few co- CEOs to meet with every week that have scaled multiple brands successfully and exited?’ It’s hard to put a price on that. I just haven’t seen that level of engagement from as high-quality of mentors with any other accelerator.”

Benefits for mentors include networking opportunities and a first look at investment opportunities, said Scott Jensen, co-founder and chief executive officer of Rhythm Superfoods and mentor and board member for SKU.

“Giving back to the community is primary, and secondary is they’re interested in investing and oftentimes do,” Mr. Jensen said.

Mentors gain insights and inspiration from the brand founders, too, Mr. Banahan said.

“I’ve learned so much from this entrepreneur community about how to start a brand, how to create a community of brand lovers, how to make smart big decisions,” he said. “Those are things that are really impactful for me and things I can take into my job on a daily basis now.” 

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