Investing in innovation: Learnings from the Good Food Programme Pilot

Our January 2023 report, How can innovation support a healthier food industry? explores the emergence of healthier challenger brands (HCBs) as a force for change in the food industry, and the way the Good Food Programme supports these brands. HCBs demonstrate that it is possible to produce healthier, tasty, and affordable food and require more action from across the industry to scale and increase their impact. We believe there is also a role to play for forward thinking foundations and funders to galvanise this action and to increase awareness on the potential of HCBs.

Matt Towner, Portfolio Manager in the Children’s health and food programme, and Hayley Hand, Investor Director at Big Society Capital (BSC) share their reflections on the pilot phase of the Good Food Programme and the insights for funders looking to support innovation and ventures to create social impact. The Good Food programme was established by Impact on Urban Health and BSC to support new HCBs to enter the market and grow, with a business support programme managed by industry experts Mission Ventures.

Jump to:

• On starting the Good Food Programme
• On challenges faced
• On lessons learned
• How can funders work with other stakeholders to drive change?

Hayley: At BSC we start with a social issue. Some groundwork we did with your team identified the underlying inequalities around children’s access to nutritious food as a pressing social issue in the UK. And we thought there may be a way for social investment to tackle that social issue.

Matt: We were probably a year or so into our children’s health and food programme, and we already had a strong sense that influencing the food industry was going to be a big part of how we narrowed the inequality gap in terms of children’s access to healthy food.

In thinking about how we could disrupt bigger markets, we started thinking we could work with smaller start-ups creating healthier products. The Healthy Returns research we co-funded with BSC outlined where the opportunities for creating healthier products might exist. So, we started fleshing out the idea of piloting an investment fund and accelerator as a way of getting started.

Hayley: Your team bought a deep understanding of the opportunity and the social issue, making this partnership instrumental for us at BSC.

Matt: Likewise, it was crucial for us to partner with BSC, who brought so much knowledge on social investment and how to set up a fund, from the structure to the ways we could support ventures to scale. That was key experience we didn’t have. Investing in ventures was very new for us, so working with BSC gave us reassurance and confidence in how to get started.

Hayley: For us, ventures are a part of our overall portfolio and how we tackle the biggest social issues in the UK. There is so much potential in terms of the type of capital that they can attract, how fast they can scale and how nimble they can be. We’ve seen more foundations starting to invest in ventures. How did Impact on Urban Health see ventures as part of its suite of funding models?

Matt: We try and take on big, intractable health issues that are relevant to residents living in Lambeth and Southwark, and other cities across the UK and internationally. We come at these issues in a range of ways and try and understand the problem and the levers for change.

Commercial companies and markets have played a role in creating social and health inequity, but /and   can also be important players in transforming the status quo.  Ventures are exciting as they have the potential to disrupt existing markets and challenge big companies with new products or technologies.

Matt: When I look back at the pilot, I think we should have been more intentional about embedding diversity, equity, and inclusion and addressing barriers to entrepreneurship. We know that entrepreneurs from minoritised backgrounds do not always have the same access to networks and funding. Not many people can set up a new business and go without a salary for a year or more. Entrepreneurs often benefit from that first bit of funding from friends and family.

But we really want to support entrepreneurs who are tackling challenges that they see in their lives every day. So, if we want to create businesses and food products that work for families on low incomes, we’ll get better businesses if we support entrepreneurs with lived experience. 

Hayley: I definitely agree with that. We really need to break those cycles that see only people with established networks and funding setting up new businesses.

I also think a key learning was how to structure our support to founders. Our hypothesis was that mission-driven founders would need support with running a successful commercial business, and the support needed to be really tailored to them. How do you work with retailers to secure supermarket listings? How can reformulation help make your product even healthier or more affordable? How do you get ready for investment? There’s something about assessing the founders well and then bringing in the right kind of mentorship and business support to achieve scale.

We knew from the outset that we had to look beyond the typical healthier food ventures that only focus on creating premium products that end up in Whole Foods or similar retailers. An affordable price point would be one of our key drivers of success, and to get the price down you need to reach scale, and to reach scale you need to build a strong business. 

On impact and insights for other funders

Matt: There was much complexity in establishing such a new approach as a funder and in collaboration with so many types of organisations. And then the real question: are we making any real impact? Is it possible to create healthier and affordable products, and are people buying them?

Internally we reflected intensively on processes and gained confidence that this approach had potential. On the impact side, we had a lot of initial findings that brands were reaching affordability or had routes to getting us there. Overall, though, there was much data or ways of collecting data that didn’t work in practice – and that’s a learning we only got by failing.

In retrospect, I would have funded an external learning partner for the full pilot to help guide us through the complexity and moving parts. In a pilot you have to be really conscious of what you’re trying to learn and when, as well as being aware that the impact may only be realised in the long term. Any insights or messages you’d have for other foundations who might be looking to do or fund similar type of work?

Hayley: I would say do it! We learned so much along the way, both in terms of the social issue, but also practically, as it was such a hands-on way of testing what could work and what was unlikely to work to tackle that social issue. I would say do it with your eyes open though! It takes patience and work, but the journey is worthwhile.

Matt: Yes! Also, there’s something about getting key people internally comfortable with just how much you don’t know and that that is okay. You have to develop your approach to supporting ventures as part of a wider portfolio of work. Mission Ventures are now running the second iteration of the programme and are actively building corporate partnerships and seeking to influence and inform the national debate around regulation and supporting innovation. I’m really thrilled with what we’ve been able to accomplish and excited to see where we can go in the future.