Inspired by their own mealtime experiences, Boothies are digging in to the booming healthy-food industry, with delicious results.
- By October 10, 2016
“A good food ecosystem, caring about ingredients and their producers—that’s the future of food.”
Booth students and graduates are paying attention to those consumer trends.
Five years ago, few were looking to put their money in the healthy-food sector, said angel investor Teri Lowinger, AM ’79, MBA ’87.
“Now, it’s hot,” Lowinger said.
At Booth, the Food, Environment, Agribusiness, and Development professional group attracts foodies, of course, but also students who care about their food and the social consequences of its production, said recent co-chair Chris Boulos, ’16.
Through FEAD events, students meet with industry leaders and investors. They also network and set up short-term internships at food-focused companies.
Boulos, who grew up in a restaurant family, said he and his peers see avenues for growth in three healthy-food spheres: sustainable, efficient food production; tech-enabled food distribution and delivery; and fast food that’s real food. “Agriculture seems sleepy, but we see a lot of opportunity,” Boulos said.
Booth students and graduates are getting noticed for their innovations in the booming healthy-eating sector, from app-ordered, farm-fresh egg sandwiches to a countertop oven that steams, bakes, and broils pre-prepped meals via cloud-based instructions.
Food businesses (Tovala, the aforementioned healthy-cooking appliance in 2015, and Simple Mills, a clean-eating baking mix in 2014) won two of the last three Edward L. Kaplan, ’71, New Venture Challenges—Booth’s best-in-the-nation accelerator program.
Booth alumni have left successful careers in private equity, finance, and marketing to create healthy-eating products or businesses that spring from individual need. Often, these trailblazers are working moms, dissatisfied with packaged fare or take-out foods available to their children.
Here are some of the ways Booth graduates and current students are changing how you eat.
Working in private equity and raising a family in Los Angeles, Angela Blatteis, ’86, was looking for a convenient yet healthy grab-and-go meal or snack alternative for herself and her active family. One daughter often skipped breakfast, another wanted healthier meal options, and a third was running from sport to sport, living on Gatorade.
Many were raving about pressed juices, which didn’t cut it for Blatteis. “Juice has too much sugar, no fiber or protein, and left the kids feeling cranky or jittery,” she said. Loving soup and looking for alternatives, Blatteis looked into packaged and locally produced soups. But she found that even the “healthy” lines were laced with preservatives, unwanted chemicals, cream, GMOs, and dyes. Those were a no-go. When her child got the flu, Blatteis visited a local Jewish deli for its homemade chicken soup, but realized it wasn’t made with nutrient-dense bone broth.
“That was a wake-up call,” she remembered. “I realized I could make my family and myself healthier just by making my own hot and cold soups.” That was just the beginning, Blatteis said. “It soon became clear that I wasn’t alone and that healthy soups and ‘sou-thies’ are critical for my family and loved ones. And I’m probably not the only person who is tired of being duped as a consumer.”
With that, Blatteis and her business partner set out to revolutionize the soup industry. Souping, they decided, would be the new juicing. (Cold-pressed juices and smoothies are a $20 billion industry.)
Blatteis is now founder, CFO, and COO of Soupure, a two-year-old line of nutrient-rich, organic, preservative-free soups and sou-thies that can be enjoyed as a snack, beverage, or meal replacement, or for weight-loss and maintenance. In her first full year of business, she generated $500,000 in sales; opened a store in Brentwood, California; and wrote The Soup Cleanse cookbook, a New York Times best seller.
That kind of revenue and recognition so quickly “gave me proof of concept,” Blatteis said.
Those early successes emboldened her to move production to a contract manufacturer and ship her products nationally. In July, Blatteis closed a new round of financing that allowed her to hire staff, which frees her to join Booth students on a marketing project for the Soupure brand and to work with Santa Monica–based Doctor Evidence to attempt to clinically prove that consuming soup or broth leads to weight loss.
Starting off, Blatteis kept the business hyperlocal, producing just 25 bottles per week from a commercial kitchen. “I wouldn’t compromise: We use organic, pesticide-free, non-GMO, gluten-free, and non-dairy ingredients and bones from organic, air-chilled chicken and organic grass-fed beef.”
Because of her Booth education, Blatteis said, “I knew what my dream company would look like. I saw the hole in the market for a product that meets the needs of today’s busy and active lifestyle, and a simple solution for healthier, sustainable weight loss.”
After an early career in finance at First National Bank of Chicago, Teri Lowinger continued investing in companies privately as she raised three children, one of whom had food allergies. With that, Lowinger said she became a Whole Foods “groupie,” both as a consumer and an investor.
“Whole Foods and Starbucks were my best investments,” she recalled. Where food comes from and how it’s produced—which stemmed from her daughter’s needs—sparked her next career, as an angel investor in start-up and early-growth businesses under the umbrella of local, sustainable food.
Lowinger became a founding member of the Sustainable Local Food Investment Group (SLoFIG), a Chicago-based network of 30 investors that has seeded $1.5 million to sustainable-food supporters since 2011.
“When you ask about healthy eating, people talk about fats and proteins,” Lowinger said. “If you ask people if they eat locally, most tell you about ingredients, about organics. But if we want to make real change in the food system, we make sure farmers earn a living without taking a second job, that farm workers are paid fairly, that animals are treated humanely. The goal is to have a robust and vibrant sustainable local food system.”
So far, the group has invested in 10 businesses, including restaurants, food cooperatives, and even a blueberry farmer. Separately through Hyde Park Angels, the Midwest’s largest and most active angel group, Lowinger invested in Simple Mills, the 2014 NVC-winning gluten-free baking mix company founded by former Booth student Katlin Smith, because Smith had created a “clean” product with only five or six ingredients, Lowinger said. (Hyde Park Angels partnered with the Polsky Center for Entrepreneurship and Innovation in 2007 and the angel group has since invested in at least three companies started by Booth entrepreneurs, most recently the Eastman Egg Company.)
“What we look for in a food company are the same qualities you’d look for in any other early-stage business,” she said. “Solid, adaptable management and entrepreneurs who know their market—with an added layer of a social mission to improve the Midwest food system.” Said Lowinger, “A good food ecosystem, caring about ingredients and their producers—that’s the future of food.”
There are 40,000 items in a typical grocery store. No wonder consumers get confused and frustrated over what to buy. Guiding such choices is the business of ShopWell, a free website and mobile app that provides personalized nutrition advice by scanning grocery items. Two million people have downloaded it since its inception five years ago.
Rhishi Pethe, ’11, is head of product at the San Carlos, California–based company. Theirs is not the only ingredient-choice app out there, Pethe noted, but ShopWell’s difference is its independence: they take no money and run no ads from food companies. Revenue comes from the consumer data they gather. “That’s why people trust us,” Pethe said. “We’re not preaching. We provide information and trust consumers to make the right decision. We all have different health concerns and aspirations: no two people are the same. We personalize the shopping experience.”
Diabetics, marathoners, and people who suffer from allergies, gluten intolerance, or high blood pressure are among the app’s users. “Reading labels is difficult and time consuming,” Pethe said. “We do the heavy lifting. We have dietitians on staff. We can recommend a product better suited to your health needs.”
To use the app, a consumer creates an online profile for, say, managing high blood pressure. When shopping, he or she scans an item. If it’s not a good fit for that person’s diet, ShopWell instantly suggests a more appropriate choice.
The latest incarnation of ShopWell allows the website and app to quickly adapt to changes in dietary guidelines. Sometimes, Pethe said, “that information is not even on the labels yet.”
“Coming to Booth, I was interested in finding a way to merge my passion for food with technology.”
All Hunter Swartz wanted was a speedy, protein-packed egg sandwich for breakfast. Swartz, who worked in finance for Goldman Sachs, wondered why he could get farm-fresh, café-style fare at lunch and dinner but not breakfast. At Booth in 2012, he shared his annoyance with classmate Drew Davis, ’14.
Their common frustration hatched the Eastman Egg Company food truck.
The food truck no longer operates, but Swartz and Davis now run two fast-casual spots in downtown Chicago and a café inside personal-shopping retailer Trunk Club, also in Chicago. Eastman’s offerings—sandwiches, omelet bowls, sliders, and coffee—are sourced from area farms, bakeries, and roasters known for their whole-Earth credibility. Employees share a stake in profits, and you can place your order via a geo-based app, so your egg sandwich is ready when you arrive.
“We want to change the industry,” said Swartz, who left Booth a few credits shy of graduating because the business took off. “It’s bigger than breakfast: it’s how we source, where we source, how we connect, and how we invest in our team.”
Eastman Egg Company sales reached $1.1 million in 2015, with 840 percent growth since 2013. Hyde Park Angels recently invested $1.5 million to fuel expansion in Chicago and beyond. The two business partners continue to live out their Booth education. “The Chicago Approach is what we do every day,” said Swartz. “We analyze, analyze, analyze. We ask, ‘Why? What if?’”
Keely Newman, ’04 (XP-73), wasn’t looking to start a healthy-food business when she worked for Citigroup as vice president of e-business strategy. But the busy mom lamented she couldn’t find take-out food for her children that was as fresh and nutritious as the food she served at home.
“With young children, you find yourself pulling into fast-food places and you think, ‘OK, the potatoes are fresh,’ but then the kids want the shake,” Newman said. “I thought, ‘Surely there’s a way to feed your kids in a healthy way while on the go.’”
Now, Newman is CEO of Grabbagreen, a fast-casual restaurant chain exclusively focused on fresh ingredients. She opened her first location in a Scottsdale, Arizona, shopping mall in 2013. Today, she operates three in the Phoenix area, and each Grabbagreen store pulls in nearly $1 million in annual sales. Newman launched franchising in April 2015 and, in 16 months, has signed 59 franchise deals nationwide. She has development plans in four states for 195 stores within 10 years.
Starting the business tested her in unexpected ways: Newman had to educate customers, many of whom didn’t know what quinoa was or how to say it. To use fresh coconut, she designed her own chopping block to ease splitting and scooping. Most importantly, she discovered ways to use whole foods quickly and without waste.
“I had to figure out how to make it work,” she said, applying everything she’d learned in her operations course and others at Booth. “I was numbers driven,” she said. “I was able to sit at home at night and analyze sales.”
The menu, which Newman devised over a bottle of wine one night, features inventive wraps, bowls, and smoothies made with preservative-free whole foods. “You can’t make an unhealthy choice” at her chain, she said with a laugh. And nothing makes her happier than hearing young children delight in Grabbagreen’s offerings. “Truly, we are changing early-childhood eating habits.”
Tech-enabled healthy food is the goal of David Rabie, ’15, who won the 2015 NVC with the invention of a future-is-now appliance called Tovala (previously known as Maestro). “Coming to Booth, I was interested in finding a way to merge my passion for food with technology,” Rabie said.
Tovala is a countertop smart oven coupled with a healthy-food delivery business. Customers choose a preportioned, uncooked meal—say stuffed chicken with an edamame and tricolor quinoa side or salmon on a bed of rice with a side of Brussels sprouts. A bar code on that delivered package instructs the oven, via the cloud, to steam, bake, and/or broil that meal in 10–30 minutes. There’s zero cleanup because meals are delivered and cooked in a pouch.
Rabie was indifferent to food until he was a teenager, when his father took him on a “life-changing” five-day hike and health retreat in the mountains. There they were limited to a vegetarian diet. The drastic change in their food intake, combined with intense exercise, caused him and his father to suffer the first two days, especially from caffeine withdrawal. By day three, however, the two felt renewed. “We marveled at the quick turnaround, how exercise and food alone could make us feel amazing,” he said. “When we returned from the retreat, we went straight to Whole Foods and restocked our kitchen, which shocked my mom.”
After college, Rabie worked first at the Santa Monica, California–based Veggie Grill restaurant group and then ran Groovy Spoon, a frozen yogurt chain, which gave him the opportunity to head a business without risking his own capital.
As a Booth student, Rabie became known for carrying avocados in his backpack and paper bagging his homemade meals of brown rice and steamed vegetables in curry.
The spark for his start-up? He watched meal-planning, fresh-ingredient-delivery businesses, such as Plated and Blue Apron, take off. What if he linked that delivery convenience with a high-tech, restaurant-quality device made for the home?
Rabie did, and won $50,000 from the NVC and $20,000 from Pritzker Group Venture Capital. Later, he raised a $500,000 pre-seed round led by Origin Ventures, and another $120,000 from Y Combinator, a Bay Area accelerator, where he and his team of five set up during the first quarter of this year. They spent that time putting the Tovala machine in homes to see how consumers used (or misused) it and to see how menu items fared.
The Tovala team is back in Chicago in new headquarters in the Fulton Market district. At Tovala’s discounted presale price of $289, Rabie expects strong sales this holiday season, with 1,000 machines already sold via Kickstarter. “We want to be on every countertop in the country,” he said. And it’s not just the machine Rabie is selling: it’s a lifestyle, where a good-for-you meal is yours with the push of a button.