The Latin proverb “fortune favors the bold” may hold some truth, but it’s not a very sound business strategy. Over the course of its 30-year history, AURI and its staff have demonstrated that success in the business world most frequently favors the prepared.
AURI’s Agricultural Innovation Partnership (AIP) program helps entrepreneurs and existing businesses prepare by answering key questions and leveraging the expertise and resources of collaborating organizations.
“The purpose for starting the program was to broaden the community of partners working with us on projects that impact our stakeholders,” says Jennifer Wagner-Lahr, AURI Senior Director of Innovation and Commercialization. “We’re working with others who bring unique assets
to the table.”
The AIP program helps catalyze innovation, generate new ideas and support collaborative partnerships that add value to Minnesota’s agricultural products or improve processing efficiencies. The program then delivers applied research studies, guides or tools to help Minnesota businesses use and add value to the state’s agricultural commodities.
This three-year-old program fills information gaps to benefit Minnesota’s food and agricultural sectors through collaborative research partnerships. Information generated through the AIP program is public domain and shared to drive new opportunities for ag product utilization.
“The AIP collaborative’s key objective is to make research results public and transfer opportunities for value-added opportunities to Minnesota entities,” adds AURI Executive Director Shannon Schlecht. “Filling information gaps helps to de-risk topic areas and highlight new investment opportunities for new or existing businesses to further explore.”
“It fits in perfectly with our initiatives and innovative network programs and hopefully puts the wheels in motion for future commercialization services projects,” Schlecht adds.
Food Packaging Guide
Among the projects supported through this program is a Food Packaging Guide to help emerging businesses better understand the requirements and finer points of packaged food. Supported and directed by AURI and the Minnesota Department of Agriculture (MDA), the Food Packaging Guide was developed by the marketing firm Clutch Performance.
David Miller heads up the food marketing efforts for Clutch Performance, having been involved with packaged goods marketing for several large companies.
“It’s easy to start a food business,” Miller contends, “but it’s difficult to grow from serving farmers markets to regional or even national distribution.”
Miller says packaging involves much more than simply serving as the device that delivers food products to consumers. Businesses face several major considerations when aiming to grow their packaged food products distribution.
Packaging provides food protection and safety. Miller says proper packaging helps maintain desired product shelf life, physical integrity, and maintains consumer trust that the product they’re buying is safe.
“Entrepreneurs often think about packaging in terms of what they want it to look like, but the important decisions around packaging are often more functional,” Miller explains.
Those functionalities include safety seals, tamper-evident packaging as well as moisture protection.
Food packaging also provides product protection through the supply chain. Hand delivering products to local markets is simple for entrepreneurs, but when markets grow to larger distribution, Miller says food businesses must understand that primary and secondary packaging needs to satisfy the entire value chain including distributors, retailers and end users.
Store shelves are crowded spaces. Miller says food packaging must catch a grocery store consumer’s eye in five seconds from five feet away. In addition to required packaging elements like nutrition information, food packages serve to differentiate products in a crowded marketplace. Ensuring the finished, packaged product delivers the intended message to effectively compete in the retail space is a careful consideration.
Miller believes knowledge of the food industry is valuable for start-up companies working in the packaged foods world, because it can be a challenging endeavor.
“If some entrepreneurs knew what it would be like getting into the food business, they probably wouldn’t take step one,” Miller adds. “I applaud those who succeed because it can be tough sledding.”
Resources like the Food Packaging Guide smooth the path for Minnesota businesses by harnessing available resources.
“A strong spirit of collaboration exists among groups that are trying to push the ball forward,” Miller says. “We’re delivering something to the small entrepreneur that can help them move up the value chain in this big machine of packaged goods.”
The Food Packaging Guide is available for download on the AURI website at www.auri.org.
Sourcing Local Ingredients
Many food companies look to differentiate their products and support sustainability by sourcing ingredients locally. AURI and the MDA partnered with Renewing the Countryside to develop a resource connecting food companies with local ingredient suppliers.
“The idea is to create a compilation of suggestions and resources for manufacturers to consider,” says Elena Byrne with Renewing the Countryside. “As they’re finding sources for ingredients, they’re building their company.”
Renewing the Countryside partners in the FEAST! Local Foods Marketplace event which encourages local sourcing among the food manufacturer sector. As part of the FEAST! event, Byrne says she’s witnessed food companies trying to make connections with potential ingredient providers—with varying degrees of success.
“We’re always thinking towards how we, as service providers, can help make that local sourcing more possible,” Byrne explains. “We’re aware of many instances where exhibitors made connections at the FEAST! event that helped them increase their local sourcing and jumped at the chance to create a focused effort. We became aware of barriers as they come up incidentally, but the project gives us a chance to compile them alongside correlating factors such as scale, ingredient category, food sector, certifications and more.”
Byrne says the local ingredient sourcing project considered the available data pool by sector, knowing that different types of ingredients are subject to different standards for variables like shelf life, temperature and handling. It was important to understand the effect of scale and the system for sourcing locally.
“We wanted to discover who successfully sourced local ingredients, how they found those sources, how they handled barriers, and how they managed the process, as well as who was not able to source locally, and what those reasons or barriers were,” Byrne says.
Byrne says there is an opportunity for food companies to source more local ingredients, but the factors, including economics, can be complex. Byrne says price/cost will always favor direct sales of agricultural products because that carries a higher margin compared to selling to a food manufacturer. Those companies will add further processing, packaging, and branding while also trying to keep final cost and retail price as low as possible.
Byrne adds that manufacturers require efficiency, which can cause them to buy from distributors, and can also mean they purchase product after it’s undergone some type of intermediate processing.
Byrne says having the full weight of the MDA and AURI, both of which aided hundreds of companies, helped in the project research protocol.
“AURI helped provide insights on research tools like our local sourcing survey and contributed suggested subjects for focus groups and interviews,” Byrne states. “Also, with multiple organizations interested in the study’s outcomes, there is extra confidence that this research will make a difference.”
Once complete, the sourcing guide will be available from the AURI website.
Working Together
The resources developed through the Agricultural Innovation Program are valuable for the state’s agriculture and business communities. However, the collaboration involved with putting these resources together is also extremely important.
Schlecht says AURI develops its priority research areas for the AIP program by getting input from key stakeholders. Bringing those resources together provides a broad perspective on the issue.
“When mutual interest areas align, collaborations are created and dollars are further leveraged to help meet shared objectives,” he says. “A collaborative approach ensures AURI is meeting an industry need and further leverages resources to generate ideas that can result in new commercial opportunities.”
“None of us have huge money trees, so by working together, we can leverage financial resources and connections,” says Renewing the Countryside Executive Director Jan Joannides. “By being connected, we can pull resources together and come up with solutions.”
Wagner-Lahr says the collaborative projects are working very well and AURI is pleased to work with top notch organizations. By bringing mutual interests and diverse expertise together, the end result is a resource to support value-added agricultural businesses.
Organizations or individuals who are interested in partnering with AURI or want to stay abreast of future requests for proposals can contact Jennifer Wagner-Lahr at jwagner@auri.org.
