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Children's health and food
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Matt Towner and Hayley Hand share their reflections on the pilot phase of the Good Food Programme.
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.
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.
“ In thinking about how we could disrupt bigger markets, we started thinking we could work with smaller start-ups creating healthier products. Matt Towner Portfolio Manager
In thinking about how we could disrupt bigger markets, we started thinking we could work with smaller start-ups creating healthier products.
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: I think this was by far the longest process I went through to getting a project approved! Being a really new approach, it came with more scrutiny. There was the risk of enabling commercial gain, and people making lots of money from the pilot. Also, more traditional nutrition-focused organisations questioned why we’d take this approach.
Hayley: Can you say more about that last point?
Matt: Some organisations think we need to be working with families to educate them around healthier choices and making sure that they’re eating fresher foods. Obviously, that is important, but convenience is one of their key concerns. We had to be led by what families actually want, and so we stuck to an approach that saw us supporting much healthier versions of the products that families know and love. Did you have any challenges at BSC in the lead up to launching the pilot?
“ We had to be led by what families actually want, and so we stuck to an approach that saw us supporting much healthier versions of the products that families know and love. Matt Towner Portfolio Manager
We had to be led by what families actually want, and so we stuck to an approach that saw us supporting much healthier versions of the products that families know and love.
Hayley: We hadn’t seen a dedicated fund investing in food businesses, so we didn’t know if there would be investor appetite. There was a real opportunity here for innovation, but it came with its challenges. It’s a relatively small fund and the intention was to provide some evidence that it could and should scale. That was a really important point to be reminded of and brought back to – what would a vision for a larger scale programme be, and how could we start working towards that vision?
Matt: I think, in fairness, what we were trying to do is quite difficult! I’m really proud of the work that our partners, and Mission Ventures in particular, have been able to achieve in terms of supporting brands to develop scalable products that can be delivered at affordable price points. Ascension Ventures was equally key in running the actual investment fund.
Hayley: We see this so often, and I’m sure you do as well, if you’re trying to do a totally new type of project, there’s so much enthusiasm, but it can be a recipe for failure if you try to tackle too many new things at once as one organisation. It is absolutely crucial that you work in partnership and with people who can bring in the right expertise.
Matt: And then you need to give enough time to develop those relationships and ways of working so everyone can meaningfully contribute their expertise towards the bigger vision.
Hayley: Partnership work takes time. I think people sometimes have the impression that innovation happens very quickly – because it’s innovative! But this took us years to set up and bring all the pieces together and build partnerships that worked well. Our advisory board, for example, was such a powerful asset to the pilot. We had Sainsbury’s, we had McDonald’s, we had Bite Back 2030, we had entrepreneurs – it was so important to have their feedback on the challenges that came up.
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.
“ We really need to break those cycles that see only people with established networks and funding setting up new businesses. Hayley Hand Investment Director at Big Society Capital
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.
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.
In our recent report, we call on the whole food industry – from retailers, to manufacturers, to investors – and on government – to collaborate, coordinate, regulate and invest. In this way, we can raise the public profile of HCBs, demonstrate the role innovation can play, and develop partnerships that support coordinated action towards improving health.
Foundations are well placed to direct funding where there are gaps from private and public investment, much like with early-stage food innovation. They are also able to bring together key players from across the industry, support projects that bring about necessary and complementary action, and use their platform to demand effective regulation.
Big Society Capital’s mission is to grow the amount of money invested in tackling social issues in the UK. One of the ways they do this is through their venture investments, supporting an ecosystem that nurtures and scales innovative ways of addressing challenges in areas such as financial inclusion, education, and health and wellbeing.