Bread and Butter Ventures

What areas of food tech are you particularly interested in this year?

Food Tech's hot right now. It is a great place to be investing in. We've been lucky to be investing in this space for over five years and have a significant portfolio in food tech, which for me encompasses the full food system starting with on the farm. We call it full-stack food. This year, there are a few areas we’re especially interested in - labor and workforce, alternative proteins, and the messy middle for a start. In addition to these, I’d add sustainability and fintech as areas of interest.

Why are startups tackling issues in these areas so compelling to you?

First off, in terms of labor and workforce - there are labor issues and labor shortages across the entire food value chain from on-farm to manufacturing facilities, in transportation and logistics, all the way through restaurants and grocery stores. Everybody has labor shortages and labor issues. So, we're really interested in technology that's helping the food industry with this pain point. This can present itself as robotics, automation of processes, labor efficiency tools; it could also be labor hiring and movement. There's a lot of different ways that great entrepreneurs are thinking about helping solve the food labor crunch. 

We've always been interested in the messy middle, which is a term that encompasses the manufacturing and supply chain portion of the food value chain. That's an area that is coming along and moving quickly but has historically been pretty antiquated. Technology that touches anything in that messy middle is interesting to us, for sure.

We have become more and more interested in the alternative space for a variety of reasons. We're a little bit less interested in the brand side of things and more focused on the different industries that will grow around alternative proteins, whether it's plant-based or cell-based proteins. There are opportunities for companies to support the growth of what is a really new market. 

What makes a company a sustainable company in food?

One of the cool things about investing in our space is that every company that we invest in that makes the food system more efficient is making it more sustainable. But there are real business opportunities to build companies that are food chain sustainability-focused first, and so that's really interesting to us. 

You also mentioned fintech. When you talk about that, do you mean companies focused first and foremost on fintech, or are they incorporating it into other products?

It's both. A great example of the former is a company called Traive that is a pure fintech play. They started in Brazil focusing on providing better credit solutions for the agricultural industry, and specifically for farms, and just doing it smarter. Being able to use technology to make smarter credit decisions which should benefit everybody, right? You're going to have lower loss rates for the lenders, but you're also going to have less expensive credit for farmers that deserve it. It should make the entire industry more effective and efficient. When people have access to credit, they can help grow economies and better access to capital can help the people that make the least amount in the food system.

There are a lot of startups out there now that are thinking about this arena. That's a pure Fintech play that's super exciting, innovating in a space that needs some innovation. 

The other side of this, where fintech is more of an addition to a platform ostensibly focused on a different value prop, is something we’re seeing across lots of verticals and certainly in agriculture. Throughout the food value chain, there is so much money processed and transacted based on the movement of food, but all of this movement is largely being dealt with through paper and Microsoft Excel. This means there is a ton of opportunity. You're seeing a lot of startups that are currently solving an immediate pain point - like creating better software systems to move milk - enabling this movement of food will open up longer-term fintech opportunities that are available to them because of the technology and market they’re building. 

For example, if you are tracking how much milk is going from dairy farm to processor to the next steps, and all of that milk is being transferred on your platform and your software enables the transference of it, why not add a fintech opportunity? You can provide credit to the farmer because you know exactly what they're going to get paid and you have better insights there, or why not be the facilitator of the actual payment? Or help make that easier? It's good for everybody if it's all-in-one platform. 

This type of thing is becoming really common. It gets me excited for sure.

We've talked a lot about what's interesting right now. Are there any trends that you see being whispered about that are coming in the next few years?

Robotics! It’s certainly something we’re starting to see now but I think we’re going to see them all over the place in a few years.  We’re coming across lots of developments in on-ground robotics and autonomous vehicles - companies like EarthSense, X-Robotics, or Boson Motors. The cost of robots is going to continue coming down to the point that they’re becoming more and more viable. I think in the next few years we’re going to see the proliferation of autonomous on fields supporting harvesting crews, both working with harvesting teams and farmers but also alone. 

Brett Brohl bio:

Brett Brohl is Managing Partner of Bread and Butter Ventures. He is also the Managing Director of the Techstars Farm to Fork Accelerator, partnered with Cargill and Ecolab, and the Minnesota Twins Accelerator in partnership with Techstars. Brett honed his start-up skills as the CEO of multiple companies leading 3 to exit. Prior to the Techstars Farm to Fork Accelerator Brett served as Director of the inaugural Techstars Startup Next Food & Ag in Partnership with Land O’Lakes and as the Entrepreneur in Residence at Techstars Retail Accelerator in Partnership with Target. When he’s not engaging the world’s start-up scene Brett can be found hanging with his wife and kids, driving a lobster boat, or pretending to be a tennis pro. Check out tips and best practices for founders and investors on his Youtube Channel – “Brett’s Brain.”