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Food Venture Financing News - Weekly Issue No. 20

08.04.20
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In This Issue:

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.
  • 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.

PPP Forgiveness

  • 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)

Articles

Events

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

Register here

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.

Register here

J.E.D.I Collaborative

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):

Register here

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.

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