Startups changing the face of New Nordic Food

Written by Afton Halloran

Fermented cucumber water keffir? Danish-grown lupin tempeh? Finnish fava bean granola? From Helsinki to Reykjavik, Nordic startup culture is changing what and how we eat.

A new generation of consumers is among us, demanding much more from their food. If it’s not experiential, ethical, local, seasonal, Instagram-worthy or good for the planet, a promising product might be a hard sell. And with no shortage of challenges facing humanity, Nordic entrepreneurship will be expected to grow in strength and number. In fact, this is just the beginning. New Nordic Food 2.0 will be characterised, in part, by the startup era.

Food startups are just one component of a dynamic entrepreneurial movement that is becoming attractive to a larger number of people in the Nordics. Governmental support and entrepreneurship-friendly policies have made the Nordics more favourable than other areas of Europe. At the same time, strong internal markets in each Nordic country foster support for locally produced products. The New Nordic Kitchen Manifesto still provides guidance and standards in terms of the quality of the raw materials and the level of innovation.

Compared to other regions of the world, Nordic food startups operate in a market with a high degree of confidence in food safety. This makes it easy to get things up and running quite quickly – from testing the market to validating products. Many startups begin with street food festivals, music festivals or by hosting pop-ups to get a feel for who is interested in their products, how much they can charge and how they might further tinker with their recipe or concept.

For those seeking to do something that has never been done before, outside help and inspiration are in high demand. The Nordic culture of collaboration, trust and openness has become an essential ingredient in building up a robust and lively food startup ecosystem.

A 2017 Swedish report found that of the 732 food startups established between 2010 and 2014, 41% of them were still active. For the rest of the region, there are no concrete statistics indicating just how many food related startups there actually are. This lack of data can overshadow the sensation that change is occurring and, consequently, leave the topic off the political agenda.

While the reasons for entry into the startup world vary, many food entrepreneurs have witnessed holes in the market that they hope to fill. These gaps often correspond to changes in modern lifestyles and values. Young people are often curious about future food habits, putting the latest technology and research into the development of new product categories.

When it comes to sustainability, some startups like Rescued Fruits are combating food waste by turning ugly produce into fresh juices. Others like Seasony and Gårdsfisk are trying to shorten their supply chains by bringing consumers closer to raw ingredients. Frustration with the lack of exciting flavours or delicious ingredients also drives people to start dabbling with the idea of creating their own startup.

The rise in food movements has coincided with a decline of religion in society – a trend that is playing out in many Western countries. By strategically choosing what they eat, consumers can reassert familiar values related to ethics, purity and goodness.  Food has also become a pathway towards achieving meaning, purpose and belonging. This, in turn, has opened new gaps in the market that are just waiting to be filled.

Food is something that everyone can relate to. This means that this field also attracts professionals who can put the skills that they have learned in previous jobs to use. In Sweden, full-time workers with permanent jobs even have the right to take a six-month leave of absence to launch a company, giving birth to new startups.

As for other craftspeople, dedication is a characteristic shared within the food startup world. According to Kristian Lund one of Denmark’s leading food startup experts, entrepreneurs are driven by a passion for quality in raw materials, the story behind the product and by making a difference. Many startups see food as a trojan horse for addressing other issues within the food system such as inequality, climate change and the rise of non-communicable diseases like obesity.

Startups are also creating new employment opportunities. Starting something by yourself can often remove the barriers of entry associated with finding a job in a new country. For recent immigrants to the Nordic region food entrepreneurship is an attractive choice, sometimes putting an international spin on regional ingredients.

Heavy hitters like the Swedish Karma and the Danish Too Good to Go apps have shown that international success is not out of reach. However, just making it big within the borders of a startup’s home country is an achievement in and of itself.

What’s hot in the startup world?

Kristian Lund from Greater Copenhagen Food Startup offers his insights:

• In 2018, more and more startups started to focus on new beverage concepts with the mission to help deliver tasty alternatives to sugary sodas and traditonal bar menus (both alcholic and non-alcholic). These startups include Rebæl, Sparkling Tea, Numba, Læsk, Blid, ISH and BeGinCPH.

• Since summer 2018, focus has been placed on products/startups that have a clear ambition to reduce the impact of food on the environment. The new startups/products are taking an active position to encourage more sustainable behaviour (e.g. food waste reduction, development of circular economy models, etc). Many startups have started to focus on alternatives to meat and dairy products. These startups include Wholi, Plantepølsen, Planteslagterne, EATgrim, Nature Preserve, Foodture.dk, CheeseItYourself, broel.nu and BananaCPH.

• There is also a strong focus on healthy and sugar-free alternatives, including superfoods, energy boosters and fitness snacks. These startups include NØD Snacks, Råhygge, Kaffe Bueno, Roots Food and Buff Bar.
   
• Finally, we still see a rise in startups catering to the indulgence/treat-yourself/pampering market segment. These startups include: Rebæl, Copenhagen Winery, Drops By Samira, Mulgeo and Wally & Whiz.

The rise of Nordic food startups goes hand-in-hand with the rapid emergence and growth of the supportive infrastructure. Accelerators and incubators provide the tools required to make big ideas a reality. They offer mentorship, advice on how to pitch to investors and access to strategic advisors.

In Copenhagen, the Greater Copenhagen Food Startup takes in 10 new and exciting startups every six months. Accelerance Foodtech Accelerator and Growing Food are other related initiatives found in Denmark. In Helsinki, the international Founder’s Institute has recently launched a Food Tech programme early-stage food entrepreneurs build innovative businesses. Interdisciplinary spaces such as the Technical University of Denmark’s Foodlab at  Skylab are also getting in on the action by providing facilities and expertise to support their students’ ambitions.

Another indicator of a rapidly growing Nordic startup scene is the increase in formal and informal meetup activities such as FoodTech Sweden’s Expo, Bite Copenhagen, Food Hack by Krinova  and other local events.

Getting a new product onto the shelves and into shopping baskets is often a challenge for small businesses. In spring 2019, one of COOP Denmark’s chains, Irma, will be showcasing a variety of products made by local food entrepreneurs.

Digitalisation has also been a major asset for startups. Approximately 25% of Swedish food startups sell directly to their customers through their online stores. Retailers like COOP Danmark are actively involved in bringing new ideas to life through their digital crowdsourcing platforms. Social media platforms like Instagram also play a significant role in sparking an appetite for new products on the market.

Co-working concepts are becoming increasingly more common in Nordic urban centres. At Madsjak in Aarhus, food entrepreneurs pay a fee to get access food-safe industrial kitchens that provide them with the professional equipment and space that they would otherwise not have access to at home.

Even after 15 years of the democratization of good food in the Nordic region, there is still a notable urban bias. At a recent Food Startup Kick-off Pitch and Speed Dating Event hosted by the Greater Copenhagen Food Startup Programme in late January 2019, new startups were warned not to only chase urban hipsters but to also develop products that appealed to other consumer clusters.

Compared to other sectors, food startups still attract less investment. Things, however, are starting to change. More and more angel investors are beginning to see the pay-off potential of food.

We have certainly come a long way; however, the main hurdle – scaling up – remains. In order to ensure that New Nordic Food is not synonymous with the elite, more food entrepreneurs need to focus on the commercial part of the business. But with all the support, enthusiasm and innovation out there, the next decade ahead of Nordic food entrepreneurship looks bright.

We would like to thank Kristian Lund and Roberto Flore for providing some interesting insight that informed this piece.

This story is a part of a series about the future of New Nordic Food. Follow Afton Halloran, sustainable food systems expert, as she listens to different voices from around the Nordic region.