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Israel is "innovation nation"

Gov’t funding food start-ups from seed to shelf

Advanced robotics for “smart warehousing” to cut transportation costs.

Pathogen analysis in 30 minutes – not 24 hours – to cut the significant problem of food waste.

Refrigeration technologies that extend shelf life of fresh cuts of vegetables.

The Israeli government is investing in these types of entrepreneurial, disruptive, food technology start-ups in the hopes of getting companies off the ground.

Its incubator, called The Kitchen, vets companies and awards them up to $500,000, plus two years of residency in its business offices and access to the industry through a larger holding company, Straus Group.

“We are what they call a strategic investor in those start-ups,” said Jonathan Berger, CEO of The Kitchen. “Our mission is to provide a better industry and make better foods for a better world.”

The Straus Group has 14,000 employees who work on everything from packaging and marketing to data analysis and robotics.

The Kitchen also gathers big-time outside business groups to evaluate the start-ups, from the likes of Coca-Cola and Group Danone.

“If it’s successful, it could work for Danone,” said Berger. “It’s a high-risk, high-reward business. We are not naïve—90 percent will fail.”

After the two-year stint in the Straus offices, the start-ups need to be on their way enough to attract private investments, buy-outs – or go out of business. “They know they have a two-year horizon to get to a ‘Wow,’” said Berger. “Then we have to cut them off. That’s the way the program is governed. But before cutting them off, The Kitchen can give follow-on investments. The ideal scenario is that, yes, you’re on your own now, you’re raising capital and we want to be the first to invest.”

Even competitors admire the contribution to innovation.

“It’s a question—how do you get people to invest in such projects because those projects are taking longer term than getting a taxi,” said Ram Snir, vice president of technology and development at Central Beverage Company, the local Israeli bottler, and also a major dairy company.

Berger said there are four elements to business candidates they look for:

  • Breakthrough, not me-too, companies.
  • Unique value propositions, preferably that have an intellectual property component.
  • Excellent entrepreneurial team.
  • Scalable technology that they can take to the world.

Twenty years ago, Israel started the agricultural innovation of efficient drip irrigation. The hope now is to bring other game-changing innovations to other elements along the ag spectrum. The program began this past July. 

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