Denver-based startup eyes Northwest Arkansas for $6 million innovation food lab

Denver-based startup Solve For Food plans to raise $6 million among Arkansas investors to construct a food innovation center that uses 915 Labs’ patented technology to help food companies reduce salt and additives required by standard food processing.

The Denver group is led by Keith Larson, formerly of Deloitte and Procter & Gamble. He and Michael Hyche, a food industry veteran, recruited the help of Alan Haugh a Northwest Arkansas startup advocate, to spearhead the regional project. They put together a local advisory board and signed on GrowthWise Partners, one of the companies under NewRoads Capital Partners to help with fundraising efforts.

PLANNED LAB
When asked why Solve For Food was eyeing Northwest Arkansas for this venture, CEO Keith Larson said the region is small enough where industry groups are closely connected and it’s been a cradle of innovation and entrepreneurship for generations.

“There are a number of food companies located in Northwest Arkansas, there is a great university also working on fresh innovation and of course Wal-Mart’s presence is important given the emphasis they are making on fresh, clean label and healthier-for-you foods,” Larson told Talk Business & Politics in a phone interview.

Equipped with the 915 Labs long-microwave technology processing, Solve For Food plans to build a 20,000 square foot innovation lab that will allow small to medium size food processors to use the new processing method without having to make significant upfront investments. The space will also include test kitchens where food recipes can be formulated and tweaked before they go through the processing phase.

“We see this innovation center as a hub where chefs and food scientists create fresher formulas for shelf-stable foods which is accomplished when the food is processed using the 915 Lab machinery,” Larson said.

The timeline Larson gives for the ambitious effort is to spend at least the first half of 2016 raising the $6 million funding needed for the venture. He said over the next year they plan to order the machinery, select the site and then build the infrastructure. Solve for Food plans to hire a small team of food scientist and back office staff just ahead of its planned opening sometime in late next year.

He said the center will be be equipped for small to medium size production runs and the $6 million capital budget will be spent on 915 Labs manufacturing equipment ($1 million to $2 million) along with building and startup up costs to carry the company until it begins earning revenue from production, product development and lab services within the next two years.

TECHNOLOGY DRIVEN
Solve For Food is working with Denver-based 915 Labs, which owns and controls the 16 patents associated with the long microwave technology developed more than 15 years ago by a scientist at Washington State University working with government partners to develop fresher food rations for the U.S. military. The U.S. Food and Drug Administration and federal regulators have already approved 915 Labs technology for commercial use.

Larson said Michael Locatis, founder and chairman of 915 Labs, previously the assistant secretary of U.S. Homeland Security and chief information officer for the U.S. Department of Energy, has worked with the food processing industry to test the technology for the past few years. Locatis is with the Solve For Food leadership team in an advisory capacity.

The 915 Labs patented process is called microwave assisted thermal sterilization or MATS. Because the food is cooked for much shorter time periods than in traditional food processing, much of the ingredients’ color, tastes’ and textures are preserved resulting in less need for salts, flavor enhancers and preservatives. The end result is a cleaner label, fresher packaged foods.

“Food companies have a huge challenge before them: to meet consumer demand for fresher, healthier and more natural foods. With MATS, we are offering a solution that meets the needs of big food today and contributes in a very real way to the clean eating movement,” Locatis said.

Fresh or fresher is the name of the game in food retail as consumers are demanding cleaner labels, less food additives and salt preservatives in the foods they consume. Without it, consumers are content to shop around the center of grocery aisle where packaged goods are sold and concentrate on the perimeter where fresh foods are sold.

Larson said the processing time on something like canned soup can be reduced to about six minutes, instead of the hours long process required in traditional food processing. He said food manufactures are still largely using the same technology they did in 1900 for packed shelf-stable foods.

INDUSTRY AND REGIONAL SUPPORT
Given that consumers want fresher, everyone in the food processing and retail industry knows they must deliver, which is why Walmart remains committed to its ‘Great-for-You” labeling which requires less sodium, sugar and other additives from its suppliers.

Larson said several major food companies such as Kraft, Nestle, Campbell’s, Pepsi, Hormel and General Mills have taken part in original testing of the technology at Washington State University. He said there are 15,000 manufacturing machines across the country that do traditional processing. Changing out the entire food processing infrastructure at one time would be cost prohibitive, but Larson said taking a regional approach to create the labs where food companies can collaborate and perfect the new process makes sense as it could be a training ground for the larger players and a permanent solution for smaller food companies.

“We have been more than excited about the reception Solve For Food has already gotten from the meetings we have had in Northwest Arkansas among industry, academia and economic development teams who see the potential for this venture,” Larson said.

The local advisory team assembled by Larson and Haugh includes: Greg Spragg of GrowthWise Group; Rick Webb, retired Walmart executive and startup advocate; Mike Harvey, chief operating officer of the Northwest Arkansas Council; Daniel Hintz, chief experience officer of Velocity Group; Dr. Glenn Mack, executive director of Brightwater Center for study of food at NorthWest Arkansas Community College; Craig Soos, founder of Scout Retail; and Dr. J.F. Meullenet, department head of food science at the University of Arkansas.

If Solve For Food can pull of this the venture it would put Northwest Arkansas in a league of its own, according to Mike Harvey. He said the creation of a worldwide center of excellence for food testing and formulation alongside a world-class culinary school and renowned UA  food science program creates a myriad of growth possibilities for regional growth.

“MATS is a breakthrough technology that will no doubt penetrate the food industry because it offers shelf stable food with very high sensory quality. The NWA Food Innovation Center would offer outstanding educational, research and commercial opportunities and would foster economic development in the state,” said Dr.  Meullenet, department head of food science at the UA.

Alan Haugh, president of Solve for Food NWA, said the company plans to launch its capital raising campaign this month. Talk Business & Politics will report on the progress during the year.