Disruption Knocks on Door of Grain-Based Food Industry Entrepreneurs See Category Ripe for Change | 2021-11-24

Over the past 30 years, many grain-based food startups have injected enthusiasm and energy into baking and related industries. Two announcements at the end of October suggest that entrepreneurs see the category as ripe for more radical change.

To varying degrees, the disruptions have affected many sectors of the food industry, as evidenced by the emergence of brands such as Chobani, Starbucks, Blue Buffalo, Beyond Meat and Aldi. Likewise, in flour-based foods, many startups that have taken hold include Annie’s, Dave’s Killer Bread, and Canyon Bakehouse. While these startups and others have had an impact, it’s also true that the industry has yet to experience transformational business changes brought about by companies like Amazon.com in retail, Uber in the industry. automobile transport, Airbnb in the hotel industry and Netflix in the media.

The two October announcements, which appeared in the November 2 issue of this newspaper, could hardly be more different from each other, but each underscored the importance of technology as the key to success in the cooked food market. in the oven. The first was an agreement by FGF Brands Inc. to acquire a large part of the Weston Foods business from George Weston Ltd. for $ 1.2 billion. The second was the introduction of Hero Bread sandwiches at Subway restaurants.

Toronto-based FGF has grown in 17 years from a company with six employees to a company with more than 3,000 locations across North America. Founded by Sam Ajmera and his sons Ojus and Tejua, the company sells a variety of products, including flatbread under the Stonefire brand. Originally from Mumbai, the eldest Mr. Ajmera can be described as a serial bakery entrepreneur. In 1994, he sold Dough Delight, a producer of bagels and croissants, to Canada Bread. He created Dough Delight 20 years earlier with his brother Shreyas.

At FGF, the Ajmeras boldly declare that they “exploit emerging technologies to redefine what is possible”. Calling itself a “bakery technology company,” FGF uses robotics, artificial intelligence and supply chain solutions to be successful in baking. Allied vendors praise the company for its “impeccable reputation,” for its “powerful corporate culture,” and for its massive investments in automation. In the midst of a job crisis, FGF appears to be choosing the right time to test whether it can turn its technological know-how into a competitive advantage as it grows into a more conventional baked food portfolio than that that the company has produced so far.

Also showcasing a state-of-the-art company, the second announcement is for the pilot at a handful of Subway stores in the United States of Chicago-made sandwich rolls made by Hero Labs, Inc. Established in 2017 by General Manager Cole Glass , San Francisco- The Hero Labs-based startup describes itself as a food technology company and recently raised $ 30 million from top investors including football star Tom Brady and basketball star Kevin Durant. Mr. Brady, whose diet shuns bread, appears in an ad for Subway’s new sandwich, saying, “I’m excited to get back to bread, all because of Hero.” The bread, which has 1 gram of net carbs, 26 grams of fiber, and no sugar, is made with ingredients such as modified wheat starch, wheat protein, and flax seeds.

It’s far too early to state that the Hero Sandwich Buns at Subway will be widely seen as more desirable than other gluten-free or keto-friendly bread analogues. The ongoing trial is expected to continue until mid-December. Likewise, few to no companies have devoted more resources to the prosperity of the bakery in the past 25 years than George Weston Ltd., with efforts that included the major 2001 acquisition of Bestfoods bakery assets. It remains to be seen whether FGF will experience greater success with the company. Yet the funds devoted to these initiatives demonstrate that investors view the bakery market as very lucrative for companies that effectively initiate technological change.