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Food Venture Financing News - Weekly Issue No. 45

02.16.21
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In This Issue:

Food and Beverage Companies Benefitting From Reopened PPP

  • According to the SBA, companies in the "Accommodation and Food Services" industry group have taken $18 billion in PPP loans in 2021, making it the top industry in terms of the amount of loans taken.
  • Overall, over $100 billion in PPP loans have been made. Only $7 billion are "first draw" loans, with the remaining $93 billion comprising repeat "second draw" loans.

Tax Benefits Extended

Employee Retention Credit. Eligible companies (those with under 500 employees that experienced a suspension in business due to COVID restrictions or suffered a 20% decline in 2020 gross receipts) could take advantage of the Employee Retention Credit, which was set to expire at the end of 2020.

  • The credit has been extended for qualified wages paid through June 30, 2021.
  • In addition, the credit has been increased for 2021 to 70% of qualified wages (from 50%) and the per-employee wage limit is increased from $10,000 for the year to $10,000 per quarter.

Deferred Payroll Tax Withholdings. Employers were permitted to suspend withholding employees' Social Security tax withholdings for the period September 2020 through December 2020, and then repay such amount by doubling-up on withholdings during the first 4 months of 2021 (January through April 2021).

  • Employers now have the ability to pay back any deferrals throughout all of 2021 (a December 31, 2021 deadline).
  • PitchBook recently reported that 2020 was a strong year for foodtech venture financings. Foodtech companies raised an aggregate $18.1 billion in 2020, including $4 billion in the fourth quarter.
  • Cultivated agriculture companies raised a record $1.6 billion through venture financings last year, signaling a strong trend for 2021.
  • Mondelēz International recently launched CoLab, a startup accelerator program for emerging well-being snack brands, as it seeks to expand its portfolio.
  • PepsiCo announced that it will rebrand the Aunt Jemima pancake and syrup brand as Pearl Milling Company. Additionally, PepsiCo announced that it will commit $1 million to empower Black girls and women.

ARTICLES

Events

Naturally Bay Area's 2021 Quick Bites Series
Working Capital Financing for Emerging Food Brands

Wednesday, February 24, 2021 - 12:00 – 12:45 pm PT

Panelists:

  • Ben Brachot: Managing Partner, Dwight Funding
  • Cate Bugbee: Business Development Officer, Union Bank
  • Don Buder: Moderator, Naturally Bay Area & Davis Wright Tremaine, LLP

Hirshberg Entrepreneurship Institute Webinars
Yes We Can: Perspectives and Strategies for a Successful 2021

These webinars will provide practical perspectives and real world advice for navigating financing, cashflow, retail, distributor, and eComm challenges in the year ahead presented by seasoned experts with opportunities for you to get your questions answered by the presenters.

February 17 – INFRA and NCG Outlook
Speakers: Pat Sheridan, Interim President & CEO, INFRA Ben Nauman, Sr. Director of Purchasing, National Co+Op Grocers

February 24 – Telling Your Story and Getting Trial and Discovery in the New Covid World
Speakers: Jessica Rubino, Sr. Director, Content Marketing, Informa Markets (tentative) Annalea Krebs, CEO and Founder, Social Nature

March 3 – Brands Launching in the Current Market
Speakers: Nicole Bernard Dawes, Founder & CEO, Nixie Sparkling Water Matt McLean, Co-Founder, Uncle Matt's Organic

March 10 – The Latest Consumer and Market Trends and Insights
Speakers: Carlotta Mast, Sr. Vice President and Market Leader, New Hope Network Steve French, Sr. Vice President, National Marketing Institute

March 17 – How to Successfully Pitch for $$
Speakers: Andy Whitman, Managing Partner, 2x Consumer Growth Partners Paul Richardson, Co-Founder and Managing Partner, Renewal Funds

March 24 – Navigating Costco & Thrive
Speakers: Jeremy Smith, President and Founder, Launchpad Second speaker TBD

Register at hirshberginstitute.com

NEW ACCELERATOR COHORTS

Raley's Sponsors California Food Lab

Grocery chain Raley's will sponsor the Raley's Food Lab at the Lab@AgStart incubator, set to open in Woodland, California on April 1. AgStart, part of the AgTech Innovation Alliance which seeks to advance innovation in agriculture, food and health, created Lab@AgStart as a shared use incubator for food entrepreneurs.

Raley's Food Lab will be a certified food facility where innovators can develop new products, ingredients for taste testing, sampling, and small-volume sales. The facility will have a full kitchen and food preparation equipment. Raley's will also provide entrepreneurs with mentorship and support to help scale their businesses.

Please check out DWT's newly re-launched Startup Law Blog

At 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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