Food Venture Financing News - Weekly Issue No. 20
In This Issue:
- PPP Deadline Approaching
- HEALS Act: Key Terms
- Food Venture Financing Trends
- PPP Forgiveness
- CPG Corporate Venture Funds
- Links to Relevant Content and Events
PPP Deadline Approaching
- The already-extended deadline to apply for a loan under the Paycheck Protection Program is August 8.
- Approximately $128 billion in loan funds remain available under the PPP.
HEALS Act: Key Terms
- The Senate version of the HEALS Act includes the following key terms:
- An additional $190 billion in funding, including of $25 billion earmarked for businesses with less than 10 employees
- Automatic forgiveness for PPP loans under $150,000
- Expanded eligible uses for funds, including certain operation expenses and costs for goods already under contract
- Certain borrowers who already took a PPP loan would be eligible for a second loan, provided they have less than 300 employees and can show that they lost at least 50% in gross revenue in one of the first two quarters of 2020 compared to 2019.
- The HEALS Act would also provide an additional $100 billion in loans through the SBA's 7(a) program aimed at seasonal employers and businesses located in low income areas.
Food Venture Financing Trends
- Kraft Heinz and Danone's venture funds recently led venture rounds for companies in the food tech sector.
- A recent report by IRI and New York University's Stern Center for Sustainable Business highlighted that sales of sustainability-marketed products continued to increase during the pandemic.
- Industry experts expect venture investments and M&A activity to increase later this year in sectors including online grocery, plant-based foods, novel ingredients, agriculture technology, and immunity supplements.
- Investor diligence will primarily focus on supply chain issues, direct-to-consumer strategies, profitability, and sell-through data during the pandemic.
- Strategic buyers will likely place higher M&A valuations and focus more on private label, center store staples, immunity supplements, and plant-based products in the new business environment.
- A recent report by FAIRR indicates that $1.1 billion has already been invested in alternative protein companies in 2020, which doubles the amount of investments made in alternative protein companies in 2019.
- In addition to a surge in investments in the alternative protein industry, the ag tech sector has thrived during the pandemic as companies turn to technologies to improve workers' health.
- During the pandemic, consumers have focused more on eating at home and consuming healthier products and ingredients.
- Food tech sectors that focus on food and ag sustainability have continued to innovate and receive funding from investors.
- The SBA is expected to roll out its PPP "forgiveness portal" by August 10, after which lenders can submit borrower forgiveness applications.
- The portal's opening date may be delayed if Congress makes changes to the forgiveness process (whether as part of the HEALS Act or otherwise).
CPG Corporate Venture Funds
Our featured CPG corporate venture investment fund this week is Barilla's Blu1887.
- Barilla is a multi-national CPG pasta and pasta sauce company based in Italy.
- Barilla launched its venture capital fund and innovation hub in November 2017.
- The name "Blue1887" reflects the color of Barilla's product packaging and the year the company was founded.
- Key investments include:
- Regrained Supergrain, a health bar company (2017)
- BluRhapsody, a 3D pasta shaping business (2017)
- Planetarians, a food byproduct startup (2019)
Links to Relevant Content and Events
- AI to Help Create a Smarter Post-Covid-19 Agriculture
- Agrifood Investment Trends in the COVID-19 Era
- How 3 CEOs Pivoted Their Companies in the Pandemic
- Alternative Protein Company Closes $91.3 Million Series B Round
- New AgTech Company is Founded by Larry Ellison and Dr. David Agu
- The Better Meat Co. Closes $8.1m Seed Round As Hybrid Trend Combining Animal- And Plant-Based Proteins Gathers Pace
- FAIRR Sustainable Proteins Company Rankings
- $1.1B Invested in Alternative Protein in 2020 So Far Doubles 2019 Totals, Report Shows
- COVID Accelerates Ag And Food Investments
- How COVID-19 is Impacting Eating
- How Food Innovation Has Continued During The Pandemic
- Fast-Food Chains See Shifts Made During Pandemic Paying Off
- Amazon Grocery Sales Triple
- Impossible Burger Rolls Out at Walmart
- Impossible Burger Continues its Rapid Expansion with Publix
- Is Beyond Meat Worth US$140 a Share?
- Geltor Adds $913 Million in Series B Round
- Cargill Invests $75m to Help Pea Protein Producer Renovate Former Cheese Plant in Western Minnesota
- Sortis Holdings Acquires Sustainable Restaurant Group, Owner of Bamboo Sushi
- How Food Innovation Has Continued During The Pandemic
- Vegan Ice Cream Brand Coconut Bliss Strikes Major Investment Deal
Naturally Bay Area QUICK BITES Two-Part Series on Strategic Retail Account Planning
PART 1: Strategic Planning
Wednesday, July 29, 2020 - 12:00 - 12:30 p.m. PT
Kevin Cleary, Principal at Big Rock Growth Advisors, will walk through the "What & Why" of strategic retail account planning in a 30-minute Quick Bites lunchtime session.
- Kevin Cleary: Big Rock Growth Advisors
- Mike Dovbish: Host, Naturally Bay Area & Executive Director, Nutrition Capital Network
PART 2: Strategic Retail Account Planning
Thursday, August 6, 2020, 1:00 - 2:00 p.m. PT
Follow-up session with an interactive presentation covering the "What & How" to learn the principles that enabled Kevin Cleary to grow Clif Bar by 10X and that Johnny Valeriote successfully uses with several Bay Area natural products brands.
Funding Food for Justice, Equity, Diversity + Inclusion
August 6, 2020, 11:30 a.m.-1:30 p.m. PT
Speakers and presenters (more to be announced):
- Rodney Foxworth (Common Future)
- Kai Norte (Kubé)
- Tanya Holland (Brown Sugar Kitchen)
- Ibraheem Basir (A Dozen Cousins)
- GW Chew (Something Better Foods)
- Aner Ben-Ami (Candide Group)
- Alicia Kidd (The Wine Noire)
2020 Women Entrepreneurs Boot Camp: Plant-Based Protein
October 6 & 8
DWT's Project W is pleased to announce its 2020 Women Entrepreneurs Boot Camp (WEB). This year WEB features three tracks, one of which is devoted to female-founded companies innovating plant-based protein products. The plant-based protein program will be held on October 6 and 8 for a cohort of 6 to 8 female founders of seed stage companies developing solutions in the plant-based protein sector. More information and a link to apply can be found here.
Brandjectory Capital Raising Platform
How do CPG founders and investors meet now that there's no trade shows, conferences or networking events? Brandjectory is a relationship building tool specifically for early stage CPG founders and investors to discover each other, connect, share information, and build momentum going into a raise. Learn more about it at https://brandjectory.com.
Please check out DWT's newly re-launched Startup Law Blog
At Davis Wright Tremaine LLP (DWT), we are proud to have one of the largest Food & Beverage legal practices in the country, with over 40 attorneys representing food innovators, entrepreneurs, and investors at every level of the food chain, from Farm to Label.
Please contact our Food and Beverage team if we can assist you in any way in these unprecedented times.
The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.
DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.