Chobani mentors six startups to nearly $3M in revenue, showcases in 'Expo West'

450 companies applied, six were chosen, and the results are already showing $3M in revenue YTD — No, this isn't the next hit game show, this is the reality of the inaugural class of Chobani's Food Incubator program.

The program, which launched in October 2016, was created to "mentor and support food entrepreneurs to challenge the food industry—and to build a community of people who want to improve broken systems and make a difference."

SEE ALSO: Chobani launches new program funding over $150K to sustainable food startups

Translation: Chobani offered the six selected startups office space and a $25K grant each to participate in the program, which culminated in a showcase at the Natural Products Expo ("Expo West") in front of potential investors, distributors and customers.

Take a look at the six innovators of the 2016 class and their key achievements over the course of the program:

The mission was simple — Find six companies that exemplified Chobani's DNNA (delicious nutritious natural accessible) formula for a successful food company.

Sure, plenty of food startups are healthy, or cheap, but the trick is to hit all four areas seamlessly, explains Chobani CMO, Peter McGuinness:

"Our vision has always been better food for more people, which is tricky because when you make a really good product, how do you make it accessible for everybody?"

So McGuinness and the Chobani team had a clear vision of what exactly they were looking for:

"We set out to do the incubator and it was really simple — all you had to do was want to make a natural product and want to make it accessible to everyone. We didn't want the companies that we're going to make $18 juices in the new up-and-coming neighborhood of Brooklyn — we were after really well naturally crafted and made products, with founders that had the desire, mission and vision to make them accessible to all."

Aside from a strong team and the ability to deliver the DNNA (McGuinness swears that "the food and the people — that's three-quarters of it right there") there's another element companies half to embody: Innovation.

Jackie Miller, the Director of Chobani Food Incubator, stresses the importance of innovation within each of the startups:

"Something that excited us, and aligns with our DNNA and our values is this idea of innovation. There are a couple products and the theme among them is that they're playing in new categories, they're taking staple foods and making them healthier."

So how exactly did Chobani expect to turn a profit? Simple: They didn't!

"When you're independent it's pure — it's about the product, it's about the consumer, it's about doing what's right," says McGuinness, emphasizing the fact that the $25K grant given to each company truly came without strings attached, and that no equity was taken from the startups' success.

This concept of 'success' was measurable in a number of ways, which McGuinness:went on to explain:

"[The incubator program] gave [the startups] absolute unfettered access to the company and [Chobani] — from quality, to food safety, to sales, to finance, to marketing, to branding, to digital to social, to even our customers...that way they can learn the ropes earlier on so that they can accelerate faster ...they can also learn all the mistakes we've made along the way so that they can avoid them."

Miller added:

"We gave them this access to the entire company at every level — we engaged over 75 mentors internally, so how we measured their success was a lot of the anecdotal results of those interactions, in addition to just growth data ...what we're looking at in terms of success is their growth and their wins, so we measured from the beginning of the program through now throughout the years from their continued success everything from distribution, revenue, team size and hires, as well as outside fundraising."

And just as there are different levels and combinations of variables that equate to overall success, being a successful entrepreneur (in any industry) requires different combinations of levels of certain traits, shares McGuinness:

"Anyone who tells you there's some secret sauce i think is silly — there are characteristics, sure, you want to be competitive, you want to challenge, you want to be creative and innovative, you want to be entrepreneurial and push boundaries...but they work in different combinations and they're found in different levels and emphases by person and by company."

Still, working in the food industry comes with a completely different set of rules, requirements and difficulties, shares Miller:

"I've worked with a lot of tech companies, a lot of early-stage, at-growth companies in different sectors and food entrepreneurs really are facing a unique set of challenges. Their needs are going to look a little bit different, they have significant overhead — A pretty high overhead in terms of the working capital required between equipment and inventory, manufacturers, compared to a tech company with overhead being basically Amazon web services and WeWork."

She continued:

"[Food entrepreneurs] have to navigate a pretty opaque network of not only manufacturers but co-packers, brokers, contributors, retailers, which all kind of have their own way of doing things...the need for food entrepreneurs for some of that support and acceleration is a really significant need in the food entrepreneurship debate."

But clearly, these six companies were able to work through these challenges and begin carving a path set up for long-term success, as Miller proudly shares:

"The 60 percent growth and distribution and the nearly $3 million in revenue just in the first few months of 2017 are a testament to some of those big wins and there were definitley anecdotal wins — Kettle and Fire secured a national launch at Whole Foods...Banza launched for the first time in club and sold out their inventory at Costco in a matter of a few weeks...but for me, it was really about seeing this peer mentorship — We were expecting [the startups] to get a ton out of Chobani during this time but not expecting how much they were supporting each other and helping each other, mentoring each other."

McGuinness was equally as proud when recalling each of the startups presenting for the first time at Expo West:

"We had a demo day...[the startups] had started to come in and practice their presentations and I was just kind of giving them some pointers here and there, and I was just watching them go through their pitches...and they just killed it, they nailed it and I was getting choked up, it was amazing to see how they can pitch their company, their potential and their products — They were always excellent but I saw the growth in them manifest that day in their pitches. it was just a very proud moment."

Applications for the second Incubator Program class will open in May 2017.

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