Fertile ground for foodies

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March 27, 2014 // UPDATED 12:29 pm - April 1, 2014
By: Michelle Bruch
Illustration by Dana Croatt
Michelle Bruch
Food startups are joining forces to nurture growing sector

You’ll find them at Bar Louie on a weeknight. The group includes the 24-year-old creator of peanut butter in upside-down jars, the inventor of herbal tea boxes for kids, the owner of the Hot Indian food truck, and the founder of Seven Sundays muesli.

Minneapolis-area food companies are meeting regularly for happy hour in Uptown to help support each other’s endeavors. The strictly informal group trades advice, meets one-on-one in coffee shops, consults with the Minnesota Department of Agriculture, and rents houses together at trade shows. More than 30 businesses come to the happy hours and there are newcomers every month, ranging from early startups to companies valued at several million.

“It’s cool to see more artisan-style food companies,” said Mike McKeon, a group member and consultant on Whole Foods’ private label Engine 2. “The focus on natural and organic opens the door to entrepreneurs.”

A few cities are known for a concentration of food startups, such as Boulder, Austin and the Bay area.

Minneapolis may join their ranks as more organizations pop up to support food entrepreneurs. City Food Studio held a grand opening in March for its shared-use commercial kitchen at 38th & Chicago. And a new small business accelerator called The Digging LLC moved into a Northeast Minneapolis building this year to serve as a consultant for the food and beverage industry. The management team previously launched 2 Gingers Irish Whiskey in Minnesota, which was later acquired by Beam Inc.

Hot Indian Foods founder Amol Dixit said Minnesota offers the entire value chain of food — from Cargill’s agricultural focus, to General Mills’ manufacturing and marketing expertise, to Supervalu and Target’s retail experience. He said the state also boasts success stories like Angie’s Kettle Corn out of Mankato.

“We have talent across the board in the food business,” he said. “A couple more of these do well, and it will be known.”

Dixit is expanding his food truck into a restaurant at the Midtown Global Market, which he described as an “Indian Chipotle” — to prepare, he worked at Chipotle for six weeks to gain a little more restaurant experience.

“I want to make Indian food less intimidating for the masses,” he said.

Dixit previously worked for General Mills’ corporate venture capital group, where he built relationships with food startups. When he left the company to start the food truck, he reached out to those contacts for help.

“I kept hearing the same things about issues they were facing, and would say, ‘Have you talked to so-and-so?” he said. “I thought it would be great if we could all get together.”

Five or six companies ended up meeting at Bar Louie for cocktails more than a year ago, and they haven’t stopped.

Dixit said the group’s network helps in finding funding and investors. They also introduced him to a University of Minnesota entrepreneurship professor that assigned a project on his brand.

“I only reached out to that professor because one of the other entrepreneurs had done that,” he said. “It was basically free consulting from business school students.”

Some other recent happy hour attendees:

— Andrew Kincheloe makes Buddy’s peanut butter out of the City Food Studio in flavors like chocolate peanut. The Salty Tart recently created a cupcake with his peanut butter in the batter. Buddy’s launched last January in stores like Local D’lish and the Eastside Food Co-op.

“I love the stories behind the food,” Kincheloe said.

The story behind the upside-down peanut butter jar: Growing up, Kincheloe’s family had a constant stand-off as to who would open and therefore stir a new peanut butter jar with separated oil. Thanks to Buddy’s new upside-down jar, problem solved.

— Mill City Bread is a bake-at-home bread mix coming soon to The Wedge Co-op and just picked up by the Linden Hills Co-op and Local D’lish. Owner Kurt Weissenfels said you simply add water to the mix, let it sit on the counter overnight, and pop it in the oven the next day. He may sell the only ciabatta mix in the country — he can find one other in England, and one in South Africa.

 

— Carl Blanz is  a leadership consultant and chef at Courageous Culture LLC.

— When the commercial real estate market crashed, former leasing agent Caleb Krienke decided to buy his own company. He now sells Pop’d Kerns — half-popped popcorn that’s a little heavier than popcorn. It’s available at 450 Holiday gas stations and stores like the Rainbow on Lake.

“You learn as you go, and you learn fast,” he said.

— Domata, owned by David Madison, makes gluten-free flour that can be used as a substitute for all-purpose flour.

— Tim Murphy left General Mills to try an entrepreneurial venture, experimenting with healthy Hot Pockets-style recipes. He went on to become CEO of Hot Dang grain burgers, a Texas-based company that makes burgers from grain, rice and beans. A Midwest expansion is forthcoming.

— Drazil Tea (that’s lizard spelled backwards) is a tea-based juicebox for kids, made with caffeine-free tea and natural fruit juice.

“I love tea, and I thought why shouldn’t kids drink it too?” said Christine Wheeler. “I really want to create tea drinkers.”

The product has launched in California, and Wheeler plans to gradually expand distribution into the Midwest next year.

“It’s been a great journey,” she said. “I love this group.”

— Donn Kelly, a former consumer packaged goods consultant and marketer at Pillsbury and Best Buy, met business partner Alison Levitt at the dog park (she lives in Linden Hills, he lives in Field). They quickly discovered that Levitt worked as a doctor and had a new product, and Kelly was an expert at bringing products to market.

“She had her own clients, and she was feeding them these flackers,” he said. flackers are flax seed crackers, high in Omega-3 and fiber. “I said, let’s get serious about it.”

They formed Dr. In The Kitchen, found space in a commercial kitchen, and started pitching the product to local co-ops. They landed in five stores in 2008; today flackers are in 1,500 stores.

— Hannah Barnstable and her husband Brady developed Seven Sundays muesli after discovering it on their honeymoon in New Zealand. Hannah started the business by delivering muesli to co-ops and opening a stand at the Midtown Farmers Market. Seven Sundays is now available in 700 stores and recently expanded into Minnesota Target stores.

“What was interesting about Target is they reached out to us because cereal sales were declining across the board,” she said.

Hannah and Brady live with their one-year-old son in Lynnhurst. They travel together to visit accounts in the Rocky Mountains, and office out of the Institute for Agriculture and Trade Policy building in Whittier (IATP owns Peace Coffee).

Hannah’s had countless coffee meetings with other food entrepreneurs. She’s learned from group members how to create a UPC label, shared a trade show booth with Drazil Tea, and rented a house with other startups for an Anaheim, Calif. trade show.

“We have all these food companies based here,” she said. “All these great food people want to spin off and are doing their own thing. ... We’re starting to leverage one another to grow.”