Kwame Asare launched his family’s pepper sauce brand, Oh Shito!, after a 2019 trip with his father to Ghana, where he was born. As they ate their way through Ghana together, Asare became enamored with a popular local condiment called shito, a savory-spicy condiment that he said goes with everything.
“One of the meals I was eating, I said to my dad, ‘Why isn’t this in the U.S. market?’ because I know the condiment market is huge,” Asare recalled. His father was way ahead of him. “He kind of looked at me blankly like, ‘Duh,’” and the idea for a family business was born.
After returning to Connecticut, Asare recruited his sister-in-law to develop shito sauce recipes and enrolled in an “accelerator” program for food startups run by the nonprofit CitySeed and Collab, which supports minority entrepreneurs in New Haven. In 2021, he launched the brand.
But lately, Oh Shito! has run into some growing pains. In its first years, the business used a shared commercial kitchen — as many food startups do — to periodically prepare and bottle batches of sauce, which they’ve been selling at farmers markets, local stores and now over a dozen Stop & Shop locations. As interest has grown among other retailers for Oh Shito!’s products, Asare said the company is struggling to increase production — and it won’t crack $100,000 in annual sales until it does.
That’s one of several common, and interconnected, problems Connecticut’s fledgling packaged food producers face as they scale up. Entrepreneurs need a strong marketing strategy to generate steady demand for their goods. They need access to large-scale production facilities (known in industry parlance as co-manufacturers or co-packers) to meet that higher level of demand. And they need cash to pay for it all.
If they’re weak on one element — marketing, production or financing — the business could collapse.
But a growing network of nonprofit organizations, small business consultancies and leaders from larger food businesses in Connecticut is trying to help startups overcome these hurdles.
“There was this gap that needed to be bridged [to] help their businesses move from kind of the cottage industry of $50,000 a year in sales or less to actually becoming larger businesses that are creating jobs, that are able to play in regional and national markets,” said Reed Immer, co-founder of CT Food Launchpad, which helps connect new packaged food brands with manufacturers and distributors. (Immer also serves as director of sales and marketing for wholesale artisan bakery Chabaso, which established CT Food Launchpad.)
In 2022, Immer teamed up with the Yale Center for Business and the Environment and CTNext, a quasi-public agency supporting startups in the state, to host an event aimed specifically at “emerging wholesale-ready food brands.” Asare was among five startups selected to pitch their business at the event, and he came in first, winning a $10,000 prize.
On Friday, CT Food Launchpad, Yale CBEY and Food’NBev Connect — a Danbury nonprofit that advises emerging food companies — will be hosting the second iteration of that effort, now called The Big Connecticut Food Event. In addition to the pitch competition (with $45,000 in prize money), the event will include a panel of speakers from Stop & Shop, Whole Foods, Wakefern and Big Y stores, one-on-one expert coaching sessions and plenty of food sampling.
Time to get cooking
Many of the Connecticut food businesses currently poised for growth took shape during an opportune time for culinary tinkerers.
Tori Brown ramped up the packaged goods side of her catering business, Breakfast Belle, when people were stuck at home during the pandemic — offering her signature hot sauce and fish-fry breading mix for sale to home cooks around the region.
After receiving a few boosts from popular social media personalities, Breakfast Belle’s products reached $100,000 in sales in 2021. Brown left her job to focus on the business full time, and the company now sells several food items in local delis, on the company’s website and through online marketplaces like Amazon, Walmart and Etsy.
“That really took off during the pandemic, and then it led to… me just saying OK, I can really take this food product line seriously,” Brown said.
Since 2020, Connecticut has seen record numbers of new businesses launched. Many of those have been in the food sector.
Gary Breitbart, executive director of Food’NBev Connect, said when his group first launched in 2018, there were roughly 35 to 40 food and beverage startups in the state. Now that number is close to 120, he said.
Many startup brands, like Breakfast Belle, came up through one of Connecticut’s business incubators and accelerators focused on the food sector. New Haven is home to CitySeed and Collab’s Food Business Accelerator, where Oh Shito! started out. In Hartford, the nonprofit reSET offers a free 8-week food incubator program for businesses with less than $50,000 in sales and a 3-month food accelerator program for more advanced local entrepreneurs. The organization focuses on women- and minority-led startups, and it partners with several other local organizations that host events, offer hospitality job training and provide commercial kitchen space through the Hartford Culinary Collaborative. (Brown went through a reSET program in 2022.)
The programs serve “early stage” entrepreneurs who are “trying to figure out, ‘Can I do this as a business?’” said Sarah Bodley, executive director of reSET.
The courses generally culminate with a “pitch event,” where entrepreneurs present their products and an overview of the market opportunity to a panel of judges for feedback — and friends and family are encouraged to attend for support.
“Pitch events are great way to hone your message, get seen and maybe get a bit of extra capital to move your brand forward,” said Ali Lazowski, who completed one of reSET’s incubator programs in 2018 and launched her vegan, gluten-free hot chocolate brand Bare Life Organics the same year. (She now serves on reSET’s board of directors.) “Yes, you’ll get feedback, and it’s competitive. But it’s not adversarial,” she said.
It’s also only the beginning.
Carving out a niche
Business advisers say new food brands often have a hard time hitting the sweet spot with their marketing strategy.
“If you’re starting to build a new product, do you do it because you made it in the kitchen, it tastes good, you like it and maybe there’s other people who might want it? Or do you do a market analysis?” Breitbart of Food’NBev Connect said.
Startups that begin by focusing on a popular product category — and then make a great version of the product — are more likely to be successful, he said. “You want to go to areas where people are looking for things and where you know the customer acquisition is going to be a lot easier.”
Lauren Berger, co-founder of Greenwich-based Get Real Foods, had years of marketing experience working for Godiva, Clairol and Revlon before she and her business partner Marla Felton, a lawyer, started experimenting with plant-based cookie recipes in their kitchens during the pandemic.
“We had been talking about the need in the marketplace for a gluten-free, grain-free cookie,” Berger said. “We tried every single cookie out there and couldn’t find one that we liked.”
Once they’d developed a solid recipe, taste-tested with friends and family, Berger and Felton refined their marketing plan.
Their brand name, REAL Cookies, evokes the product’s healthy ingredients, she said, and images on the package of a bear doing yoga were intended “to symbolize healthy balance.”
They started sending out samples to grocery store chains, food distributors and reviewers. They tapped their network of professional contacts and “pounded the pavement,” Felton said, sampling their cookies at trade shows and corporate events.
TV appearances on WFSB’s “Great Day Connecticut,” two awards from Good Housekeeping magazine, and the brand’s inclusion in the minibars at Delamar Hotels have propelled the company’s brand recognition and sales. REAL Cookies was recently invited to give out samples during a wellness event at the New York City offices of French footwear brand Christian Louboutin; Berger said they saw a bump in online sales immediately following the event.
The brand is now carried by two large specialty food distributors, sold in several national chains and specialty stores, and produced in two co-packing facilities, one on the East Coast and one in the Midwest. Berger and Felton devote their energy full-time to the business (Felton also runs a nonprofit organization), and so far they’ve self-funded the operation.
But that kind of experience is uncommon for food startups.
Zoë Geller and Jason Yang launched Fire Ox Foods in New Haven in 2020, making single-serving frozen vegetarian meals like Thai curry and Ethiopian greens. They’ve had a hard time turning a profit. The price of ingredients climbed in the wake of the pandemic, production costs are high, and they’re not selling as many units as they’d hoped, which has held revenues down.
“Our main challenge is what we call our product market fit. We still haven’t nailed it,” Geller said. And as they work to better understand their customers — to determine which aspects of the product they should emphasize in their marketing (healthy ingredients, low calorie, single serving, quick to prepare, and so on) — they’re running low on operating funds. Geller’s also not so sure their packaging is flashy enough to draw people’s attention in the freezer case.
“It’s a grind,” Geller said. “You’re making the food, but you’re also selling it and marketing it all the time.”
Fire Ox has been working with advisors at Food’NBev Connect, but Geller said they may not be able to afford the $500-per-quarter fee much longer.
The key ingredient
Startups looking to grow share another common challenge, said Ndubisi Okeke of Collab.
“It takes money to make money,” he said. “And getting some of that follow-on funding can also be a big hurdle.”
Brown of Breakfast Belle has sought funding and support from as many sources as she could find — the Women’s Business Development Council, the Department of Economic and Community Development’s Small Business Boost Fund and several other community financial institutions and grant programs. She’s also made award-winning pitches at several competitions, including the 2022 CT Food Launchpad event and, more recently, an event for female founders at coworking space HAYVN in Darien.
“There’s grant funding out there for entrepreneurs, but you have to be established and … a lot of them do look at your revenue,” Brown said. “If you didn’t make over $20,000, at least $25,000, they kind of push your application to the side. So there are some stipulations.”
Katrice Claudio, the food program manager at reSET, said food incubator and accelerator programs can help entrepreneurs with their initial market research; they can help businesses develop a strong pitch when they go out to seek funding, and they can support those businesses by connecting them to other resources in their network. But they don’t have the money to directly fund startups that are ready to expand.
Claudio said she wishes banks and investors would recognize that the companies coming to them for funding may not have everything figured out yet — but they’re very willing to learn.
“A lot of our funding organizations think that a successful or promising business fits a certain type of structure, appeal or aesthetic,” Claudio said.
“Instead of saying, ‘We’re not investing because they’re not showing the promise of profitability,’ it should be, ‘How do we invest in these businesses to make them more profitable?’” she said. Getting that technical instruction and support directly from funders with skin in the game “is a way better opportunity than we can provide.”
What CT can bring to the table
Immer and Breitbart want Friday’s Big Connecticut Food Event to help strengthen the state’s network of food accelerators, funders, investors, buyers, distributors, brokers, advisers and suppliers.
“The efforts are there, but they’re patchwork,” Breitbart said. “It’s growing, though. Momentum is there.”
With better coordination, businesses across the sector might be able to work out solutions to some of the problems startups face, such as the scarcity of commercial kitchen space and co-manufacturing capacity — a problem cited by several industry advisors. There are also opportunities for grocery chain buyers and large distributors to share information and tips about what they’re looking for, which could save startups money and time.
But Breitbart said another key to strengthening the support system for fledgling food businesses is for the state to get involved. Many states have launched “food innovation centers” at their flagship universities, where experts from agriculture, business, engineering and other departments can provide expertise and assistance to newly established food businesses.
“I think we, as a state, need to say yes, we can do something here,” Breitbart said.
Indrajeet Chaubey, dean of the University of Connecticut’s College of Agriculture, Health and Natural Resources, said that effort is underway. UConn recently hired a consultant to conduct an assessment of the need for a state food innovation center, and university leaders have identified a location at the XL Center in Hartford where it would go.
“What we need is funding to have a couple of initial hires,” Chaubey said.
Chaubey said the state’s food industry is currently worth about $8.4 billion, and it has the potential to grow much larger, given the state’s proximity to the major markets of New York and Boston.
“This food innovation center could significantly expand that,” he said.
Existing organizations that support food entrepreneurs in the state “have a limited range of help that they provide,” Chaubey said. “Someone, for example, who may want to learn about food safety, may need help developing a business plan, may need to know what the labeling requirements are, what the regulatory frameworks are around the business that they want to develop — they may have to go to multiple places to get the answers. What a Food Innovation Center does is brings all that expertise together.”
Incubator leaders say a stronger statewide system could make opportunities in the food sector more equitable, which in turn would make Connecticut’s food culture more diverse.
“That’s the next step,” said Vetiveah Harrison, food entrepreneurship program manager at CitySeed. “Eliminating financial barriers, capital barriers, and eliminating the lack of representation.”