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New accelerator to help develop food start-ups
The Creative Economy Agency (Bekraf) has spent more than Rp 40 billion (US$2
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span>The Creative Economy Agency (Bekraf) has spent more than Rp 40 billion (US$2.8 million) over the past three years to build a local food start-up ecosystem and it says the investment is paying off as more businesses are entering the system, including the latest addition of Accelerice, a private start-up training center.
“We need to scale up Indonesia’s food start-ups. Bekraf can provide capital but it is not enough. We also need big companies to lend their networks and experience,” said Bekraf’s deputy for capital access, Fadjar Hutomo, who heads the food industry initiatives, during the center’s launch in Jakarta.
He was referring to his agency’s annual Government Incentive Aid (BIP) scheme that has disbursed an average of Rp 155 million to 19 food start-ups, which he acknowledged was a minuscule number compared to the country’s 5.6 million food enterprises.
The scheme was only meant to complement Bekraf’s all-in-one Food Start-up Indonesia (FSI) exhibition, mentorship and pitch deck program, which was launched in 2016 to help at least 50 lucrative businesses each year meet new clients and investors.
According to the latest data from the Indonesian Food and Beverage Association (GAPMMI), these businesses are part of a domestic manufactured food market worth Rp 180 trillion.
To implement the FSI, Bekraf also began working with FoodLab Indonesia, another food start-up trainer and pre-seed financier, to train participating businesses such as Matchamu instant latte, Rosalie Cheese and Tempe Krezi soybean tempeh chips.
It was after attending an FSI promotional campaign last year when Charlotte Kowara, a self-professed foodie, decided to help local food startups by forming Accelerice.
A key difference between Bekraf and Accelerice is that the former focuses on start-ups that produce food and beverages (F&B) whereas the latter caters to startups located anywhere along the F&B supply chain.
“My goal is to see Indonesia become a food innovation hub one day,” she told The Jakarta Post after the inauguration.
Her center not only provides training and networking via its Food Start-up Indonesia Accelerator (FSIA) program but also offers a coworking space, professional kitchen and offline distribution channel via its Toko Sebelah store.
Accelerice does not charge startups to join Toko Sebelah and FSIA, albeit limiting them to 30 participants per batch, but charges rent for the coworking spaces and kitchen.
Charlotte said that the center could support the two free programs as long as it secures sufficient funding from corporate sponsors such as the Salim Group, a diversified conglomerate that funded the building, and Welbilt, an American food machinery manufacturer that funded the kitchen.
Among the first batch of 28 entrepreneurs who enjoyed the center’s free accelerator program is 26-year-old Muhammad Zainudin, who produces chocolate-coated banana chips.
Zainudin bootstrapped his Pigela Chips company in Surabaya, East Java, three years ago but it was only this month — two weeks into the 3.5-month-long accelerator program — that he redesigned his product’s packaging with transparent plastic strips, which allows buyers to see inside.
“Buyers often complain how they get less than the expected amount of product because of the packaging. So we redesigned ours,” he said.
Like most participants, he said it was too early to quantify the program’s impact on his business’ performance but noted that it had taught him better financial practices.
Over the next few weeks, he said he looked forward to learning more about exploiting digital technologies such as ride-hailing and e-commerce, whose players are also critical elements of the ecosystem.
Go-Food merchants were estimated to contribute Rp 18 trillion to the economy last year, according to a recent study by the University of Indonesia.
However, like most Accelerice and Bekraf participants, Zainudin produces repackaged and tweaked traditional F&B rather than the high-tech innovations sought by venture capital (VC) investment firms.
Investment analyst Melina Subastian, who works for Alpha JWC Ventures, pointed out that local VCs have been focused on food startups that provide related services such as delivery, e-commerce, catering, cafes and grocery shopping instead of those that manufacture goods.
Alpha JWC itself injected $8 million into cafe startup Kopi Kenangan late last year.
