This article is a guest post by Florian Herkner, a food startup expert with extensive experience in the food sector.
Today, food startups operate in a challenging environment shaped by growing sustainability awareness, intense competition, and shifting consumer habits. These startups span the entire food system and value chain. While the following insights broadly apply, this piece focuses primarily on food production and processing startups.
Startups need more than a great recipe to build not just a product but a scalable brand. Strategic scalability depends on five key pillars: partnerships, funding, infrastructure, know-how, and proactive engagement with regulatory frameworks.
1. Partnerships – The Growth Accelerator
Scaling rarely happens solo. Partnerships with retailers, logistics providers, tech platforms, or distributors offer startups access to markets, resources, and credibility.
Example: Waterdrop (Austria) built early partnerships with influencers, athletes, and retail giants like REWE and dm. Within six years, the company expanded to over 10 European countries and reportedly reached €100M in revenue by 2023. Partnerships were key — from retail to e-commerce to co-branding campaigns.
Takeaway: Building trust early with distribution partners and brand ambassadors creates a support network that remains strong during growth phases.
2. Funding – Fuel for Growth
Even the most innovative idea will fizzle out without sufficient capital. Scaling requires significant investment in product development, marketing, hiring, internationalisation, and operations.
Example: FREDA (Germany), a food-tech startup offering premium frozen meals, secured a seven-figure seed investment in 2024. Their goal: expand production capacity, build a scalable fulfilment model, and grow in the B2B sector (e.g., hotels and gastronomy). In my own work as a business developer and advisor, I’ve seen repeatedly how critical adequate funding and strategic capital allocation are.
Insight: Many startups underestimate how quickly capital needs grow with rising demand, especially in capital-intensive areas like fresh logistics, frozen supply chains, or direct-to-consumer models. A solid financial model and investors who understand the sector are essential.
3. Infrastructure – The Invisible Backbone of Scale
Delivering a good product in small batches is one thing. Scaling means building systems and processes that work even under exponential demand.
Example: Planted (Switzerland), which produces plant-based meat through fermentation, invested CHF 70M in a new facility in 2022. This scaled their capacity to over one tonne per hour and enabled distribution across more than 10 countries. I’m currently coaching a startup facing this exact challenge – building a reliable supply chain to support their next growth phase. Translating a strong idea into a scalable product requires careful attention to multiple factors.
Conclusion: Infrastructure must grow with demand, from ERP systems and cold-chain logistics to co-packing partners. Early investment in process optimisation builds a foundation for sustainable expansion.
4. Know-how – Understanding Technology, Markets, and Consumers
Food product development isn’t a one-way street. Taste, health, convenience, and sustainability must be balanced, supported by technological, sensory, and market expertise.
Example: Air Up (Germany) created a completely new category with its scent-based drinking system. With a strong focus on product design, olfactory science, and marketing, the company hit over €200M in revenue in 2023, selling millions of units annually.
Takeaway: Those who combine consumer trends (e.g. sugar-free, vegan, zero-waste) with scientific depth and an innovative mindset can create entirely new markets rather than just compete in existing ones.
5. Legal Framework – Not Just a Hurdle, But a Lever
The legal landscape is often seen as something to comply with. But for scaling food startups, it can become a real driver of differentiation and innovation — if viewed strategically.
Examples:
- Novel Food Regulation (EU): For many plant-based or fermented innovations (e.g. mycoproteins), regulatory approval is needed. Startups that tackle this early can secure first-mover advantages in new markets.
- Packaging & Deposit Laws: Startups that adopt reusable systems or fully compostable packaging benefit from the pressure on large corporations and position themselves as sustainability pioneers. Recircle (Switzerland), offering reusable solutions for food service, benefits directly from such legislative shifts.
- Health Claims & Labeling: Startups promoting health benefits need legal expertise to avoid cease-and-desist orders or distribution bans, while communicating as boldly as legally possible.
Conclusion: When viewed as an enabler rather than a barrier, regulation can help build entry barriers for competitors and become a strategic advantage.
How Food Startups Can Grow
The success of food startups in the DACH region hinges on a complex interplay of capital, partnerships, infrastructure, know-how, and regulatory acumen. The best examples show: it’s not just about developing a great product — it’s about building a scalable organisation that can adapt to dynamic market and legal conditions with agility. An experienced coach or mentor can be invaluable, helping teams learn from others’ mistakes and reach successful launch or scale-up milestones without unnecessary detours.