Food startups find fertile pastures in Paris

Irina Buravtsova and Natalia Afanaseva want to turn iconic artworks into multiflavored lollipops. On a recent morning at an incubator for food startups in Paris, they experimented with a new recipe in the professional kitchen, stirring a few drops of a flavor mix of raspberry, lychee and rose with sugar and water.

They poured the sticky mixture into special 3D-printed molds they had spent months designing. Once it had set, they had a batch of lollipops that were perfect mini replicas of the famous Venus de Milo sculpture in the Louvre museum.

"We want to make art edible and touchable and give it original tastes which candy in France usually doesn't have," Buravtsova said as she sucked on one of the still-warm lollipop sculptures. "So, it's surprising and pleasurable for adults who can become children again in licking the lollipops."

The Paris-based entrepreneurs, who set up a company last year called Licone, soon plan to launch their handmade lollipops, targeting concept and fine food stores as well as museum shops.

Navigating a complex market

Irina and Natalia have been getting professional help at the incubator, Smart Food Paris, located in a trendy building in the city's east. The two attend mentoring sessions and workshops on commercialization, business strategy and distribution and get access to vital contacts and business networks.

Like the quirky "edible art" company, Smart Food Paris has incubated dozens of startups in the food sector. The business ideas range from producing organic buckwheat products, setting up and running urban farms, creating edible tableware and smart delivery services, making insect-based food and plant-based proteins to replace meat and dairy to setting up an app to help bakers track and improve their operations.

"France, and especially Paris, is famous for its gastronomy but in reality, the food sector is tough to crack. It operates in a very particular way. There are lots of players, both public and private, and there are lots of regulations," said Domitille Dezobry, the head of the incubator.

"For a startup to make it to the market, you need a specialized support system that opens the door and helps it find the right model to successfully sell its products or services."

Government help for a financial head start

Smart Food Paris is far from being the only launchpad in the French capital dedicated to food startups. In recent years, the city has turned into a hotspot for culinary tech with at least a dozen clusters, accelerators and incubators focused on supporting innovative food projects.

The government provides crucial help. In 2019, President Emmanuel Macron's government announced that France had drummed up €5 billion ($5.92 billion) of capital from the country's institutional investors to inject into tech companies, especially for late-stage funding, over the next three years to help startups scale up, boost innovation and investment and make Paris a leading tech destination in Europe.

France's public investment bank, Bpifrance, has also played an important role in providing financing, pouring several billion euros into startups.

Antoine Gillain, who set up a company last year, BUBBLe iT!, to sell a product that transforms tap water into a healthy, fizzy drink, said he managed to get up to €30,000 in initial funding through the bank. The condition was that he sign up for an incubation process.

At Smart Food Paris, which is financed by the city government, he now pays subsidized fees of €1,600 each month for advice, mentoring and business contacts as well as renting three coworking spots.

"It's a fair price to pay. There is a lot support for startups," Gillain, who's also raised funds through two crowdfunding campaigns, said. "The biggest advantage of the incubator is that you're in a place where there are 25 or 30 other startups all operating in the food space, so you can also really learn a lot from each other's experiences."

Food R&D a key factor

For startups looking to still develop their products, Paris' food ecosystem has another key ingredient — a host of research institutes and universities focused on culinary science, innovation and research.

Nour Akbaraly set up a company four years ago called Les Nouveaux Affineurs or "The New Cheesemakers" to make vegan cheese. Since it uses only cashew nuts, soya and water, it required him to experiment with scientific inputs to get the crucial process of fermentation and maturation right.

He was accepted for incubation at Smart Food Paris and at the same time at a full-fledged scientific food lab at AgroParisTech, the National Institute of Technology for Life, Food and Environmental Sciences.

"Here in France we have access to many cheesemakers and many food scientists and there's a lot of know-how in dairy cheese making," Akbaraly said, adding: "The food lab allowed us to experiment and carry out prototyping and apply all the best knowledge in the dairy process to the plant-based to create products with a good nutritional profile. And, the Smart Food Paris incubator helped connect us with retailers and institutional partners for the business."

A reputation for good food

It turned out to be a winning recipe. Last year, Akbaraly managed to raise more than €2 million during a funding round, allowing him to expand his team and invest in a pilot production unit in southeast Paris.

The vegan soft cheese wheels and spreads are available in select stores and bakeries in France as well as Germany. His plan is to export to other markets in Europe.

France's reputation as a mecca for gastronomic cuisine undoubtedly goes a long way in helping its food startups. According to Choose Paris Region, an agency meant to attract investment to Paris, startups in the food sector raised a total of $700 million (€590 million) in 2019, making France the second largest player for food tech investments in Europe after the UK.