Food and Beverage Innovation, Begins and Ends with People featuring Natalie Shmulik, The Hatchery

Transcript:

Diana Fryc: Hello and welcome to the Gooder podcast; I’m your host Diana Fryc. As partner and CMO of Retail Voodoo and award winning branding agency I have met and worked with some of the most amazing women in the natural’s industry; food, beverage, wellness and fitness. As such, I decided to create the Gooder podcast to interview these great people and subject matter experts and have them share their insights, expertise and help businesses all around the world become gooder. I’m very excited to introduce my guest today; Natalie Shmulik. Is that right? Did I get that right?

Natalie Shmulik: Yes.

Diana Fryc: Excellent. She is the Hatchery CEO. We’ll learn a little bit about the Hatchery soon, but she has over six years of food incubation experience. And with that Natalie has gained a unique perspective on the industry and what it takes to launch and grow a successful business. Natalie is a regular contributor to food business news and she was recently featured in Chicago Tribune’s 10 business people to watch in 2020. Hey, that’s nice; and received the specialty food associations’ award for leadership and vision. She continues to play a valuable role in branding and marketing for food businesses around the country with her specialty in trend forecasting. Natalie is a go to resource for everything food business related along with an MLA in gastronomy from Boston University. She has a wide range of experience, working with supermarkets, culinary publications, consumer packaged goods companies and food service establishments. And if you haven’t heard of the Hatchery, hold on to your hats, we’ve got something really exciting to share with you. Welcome, Miss Natalie; how are you today?

Natalie Shmulik: I’m doing well. Thank you so much for having me. I’m excited to be here.

Diana Fryc: Of course, how’s Chicago?

Natalie Shmulik: We got lucky; the weather’s actually quite nice. So we got a little bit of a break before winter hits, I’m sure. But with everything locked down right now it’s nice to be able to get outside and get a little bit of sun. So we’ve been lucky this week.

Diana Fryc: I bet. Are you near the biggest of the big lakes?

Natalie Shmulik: I’m not super close to the lake. But I can always walk there if I want to.

Diana Fryc: If you’re ambitious, maybe not on a cold day?

Natalie Shmulik: Yeah, exactly.

Diana Fryc: Well, I’ll just reiterate this kind of obvious statement. Natalie is not with a CPG, food, beverage or wellness brand. She is the CEO of a food incubator that is working with some really amazing group of innovators and entrepreneurs and I can’t do it justice. So I’d like Natalie, can you share a little bit about The Hatchery? What’s it all about? And why does it exist?

Natalie Shmulik: Of course, so The Hatchery is a nonprofit food and beverage incubator, which is very important. We’re very mission driven, and we’re established out of collaboration between two nonprofits. One is actually one of the oldest and largest business incubators in the country; Industrial Council of Nearwest Chicago. They’re only a couple miles east of us. They have a 416,000 square foot facility. They support 110 manufacturers right on site, and have had incredible brands grow out of their space; brands like Farmer’s Fridge are out of there, Rhine Hall Distillery, they have three Coffee Roasters and some very impressive brands that have been able to not just manufacture on site but utilize the resources and the business support that ICNC provides.

Our other parent company is Accion. Accion Chicago is a nonprofit micro lender. So they provide small business loans to early stage companies, and particularly support those who oftentimes aren’t yet bankable. So they might go to a bank, they have this great idea and they just aren’t able to get the capital they need to launch and grow their business. So Accion takes on that extra risk, and grow those opportunities through financing to early stage entrepreneurs. Their biggest portfolio is food and beverage, and they focus a lot of women and minority owned businesses to give them a chance to grow their business. The two partner together to launch what is now the Hatchery. We’ve been operating as a virtual incubator for over four years now and we moved into our brand new 67,000 square foot facility just under two years ago.

Diana Fryc: That’s huge.

Natalie Shmulik: Yeah big space. Sometimes it’s hard to imagine it but when you come there, it’s a full block and you can see that space and it’s got so much life and energy to it. And we were located on the west side of Chicago, which was very intentional. Traditionally, a lot of incubators, accelerators, and resources tend to focus in on the downtown core, which makes those resources inaccessible at times to individuals from other communities and we wanted to be on the west side because there are so many budding entrepreneurs where they have some of the highest unemployment rates and there’s limited access to nutritious foods. So we wanted to bring those resources;

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to support the entrepreneurs community we’re in East Garfield Park and the surrounding neighborhoods on the west side. We offer free membership as well as 34 hours of free shared kitchen use time per week to low income residence. That’s usually the big barrier. It’s the capital, it’s the know-how and so we exists to be able to fill in those gaps and provide that kind of support, so that entrepreneurs can use their creativity and bring their ideas to life. So in our facility, we have a shared kitchen, we have 54, private food grade kitchens, lots of production and we’ve got a beautiful event space. Unfortunately, it is closed right now, due to COVID. We’re hoping to open up again, and we have a full curriculum.

So we actually ended up pivoting and moving our entire curriculum to an online platform and it’s been going really well and it’s also allowed us to reach entrepreneurs that we typically don’t reach as often. So that’s been really great to see our community still thriving, people still launching businesses and growing and that’s what we’re excited to keep doing. We we’re here to work alongside the entrepreneurs that we support, so that they in turn, can grow their businesses can support their community and can hire from the community as well. In addition to the support we provide entrepreneurs, we have a workforce development team that provides food service support, whether it be free ServSafe training, so anybody in the community that wants a job with one of our members who might be growing, they’ll be able to get job readiness training, ServSafe training and support with job placement, not just with the companies we work with, but with the surrounding food and beverage brand. There’s so many in Chicago, so it’s always great to enroll in that.

Diana Fryc: I know this is going to sound like a crazy question, but what is it about the Hatchery that brought you there? Were you instrumental in bringing it all together? Or did you come to it fully formed?

Natalie Shmulik: Yeah, I came right during the idea phase. I got to be part of putting all the pieces together and building the incredible puzzle that exists today and I think that’s what drew me. I’m an entrepreneur at heart; I’ve run my own business as well. So I think there’s nothing better than working with startup founders, the energy that they have the excitement, the creativity and sometimes it’s just about being there to support them and trying to give them the access to the resources that they need, in addition to a community of like-minded individuals.

One thing that we do at the Hatchery is we offer a very holistic type of programming. So it’s not just about the technical services you need to run a business. It’s all about how do you take care of yourself as an entrepreneur, how it spills company culture, how do you work with your fellow entrepreneurs to band together and create change and that’s always been really important to the organization and to me personally. I came on board right as Accion and ICNC was thinking about launching this model and I came in to create the business model for the Hatchery, watch the building being built from the ground up, learned far more about construction than I ever imagined I would. But it was an incredible experience and we’re lucky to be where we are today, where we have this freedom to continue growing and continue innovating.

Diana Fryc: One of the things that my business partner, David told me about what you were doing; one of the things that had me so excited was that your specific location, and within Chicago, and the impact on the communities which are predominantly businesses of color, but then there was this added and predominantly women based I think. Two and there were all of these elements of the Hatchery that was so amazing for me, is that why the Hatchery is so important? Is it about giving this opportunity to people and communities that typically don’t have access to the thinking and the ideas? Is that the importance or is there more to it?

Natalie Shmulik: I say that’s exactly right. We are mission based. And for us, it’s important to diversify the industry. I think we realize this now more than ever, with a lot of the civil unrest that’s going on the conversations that have emerged. We realized that there’s so much opportunity in this industry, and it’s a very powerful industry. But if we don’t diversify products, we don’t diversify the people who produce the products, if we don’t diversify the cultures that launch products, then it’s a disservice to everybody, because that’s where we’re able to bring our minds together and really ideate and meet the needs of the communities that we’re in. So for us, it’s very important; traditionally, women and minority owned businesses have not been given the same opportunities that white men often receive.

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And for us, it’s important to level the playing field and different opportunities because we’ve seen it with funding; we’ve seen it with asset resources and we’ve partnered with some incredible foundations and corporations who believe in this mission as well, and allow us to further support women run businesses and minority run businesses. And the majority of the companies that we do support who are enrolled in our sprout program, which is a six month incubation program, where you take your idea, and you launch it at the end of the six months. The majority of people enrolled in that program are women and minority owned businesses and we’ve seen incredible innovation that’s come out of that and I think that’s important for the world to see. Because now, we have retailers calling us and saying, “Hey, you need to make sure we do a better job here and there’s distributors trying to figure it out.” I think, the more we come to the table together, the more change we’ll be able to create.

Diana Fryc: Yeah. You said a couple of things that I thought were really powerful one is that you’ve got these retailers coming to you and the fact that you have retail experience allows you to talk to them in ways that helped them understand the impact; you understand their need states, not just perfunctory, but like if at a higher level. And then also the other thing, and this is particularly why I was so excited to talk to you was in the absence of having product and innovation that comes from communities that are underrepresented, like what you’re doing right now, without having those products, and without having those leaders visible and developing products and out in the marketplace, we actually do a disservice to consumers, I think because there is a large set of consumers out there that are not being heard; their needs are not being met, both from things, from something simple, like flavor profiles or products that they grew up with.

But then secondly, we’re also not meeting their nutritional needs and so I see places like The Hatchery being able to tackle some of those things, just simply by providing opportunity and creating a visibility platform. And I love that and because it needs to be both ways. It needs to be not only how are we serving this community of entrepreneurs, but what is the net benefit to the community at large from a consumer standpoint? And so I love that. How involved do you get to be with some of these brands? Do you get to roll up your sleeves sometimes? Are you kind of running the ship right now or a little of both?

Natalie Shmulik: A little bit of both I would say and I think you bring up a really good point. Right now, one thing we’ve seen is a lot of times as consumers, we don’t realize the origin story of where a lot of the products come from, and you see things like cassava and couscous, and he cumin all these things, and it becomes mainstream, and we don’t think much of it. But this is thanks to opening up the doors where people from all over the world, different cultures, and different backgrounds can share their experiences and that’s what we’ve seen at the Hatchery are our incredible nutritionally dense products, sustainable products that are able to launch to market and meet that need that consumers have; whether it be through the flavors, whether it be through the nutritional content, and even through the value as a whole; I think that’s so important and that’s something that we’re always excited to see.

In addition, that two way conversation with retailers, for us, it’s important that any entrepreneur who comes out of the Hatchery is a representative of the Hatchery. So we want retailers to understand these are individuals who have the highest standards for food safety, because they’re providing that training. We’re ensuring that they understand what it takes to develop a safe and successful food and beverage company, and that they understand the language of retail, you just can’t show up at a store, especially nowadays, you can’t just show up at a store with an unwrapped package of napkins and say, “Hey, I’d like to sell this to you.” We want to make sure that we know buyers and retailers right now are going through a lot and they don’t have time to entertain every story. So we want to help the entrepreneurs refine their story, understand how to communicate, build the right sell sheet. So when a retailer hears from a Hatchery member, they say, “I know this person’s ready, I know they’re prepared,”’ and so that’s really important.

For us in our team, we’re a very small team. So yes, we get very involved and personally I’m involved at times too. We’re all invested. We’re all working for this organization because we believe in the mission. When the companies we were working with were struggling during the pandemic we felt for them, we ourselves as an organization struggled but we jumped right into action and wanted to make sure that we were going to be part of the solution and there to support these companies. We spend as much time as we can, we work with over 200 companies so we can’t spend every week with every person but we need to do programming.

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That allows our entrepreneurs to connect with one another and to get the information they need. We run coaching sessions frequently and we sit there and we talk to them and we hear about the challenges they’re facing and learn their needs, and that actually helps us better improve our programming as well.

Diana Fryc: Can you share some things that are unique about the Hatchery that maybe better or really well funded incubators may not have to contend with? I don’t know if you’ve considered them hurdles, but things that — I don’t know, I’ll just leave the question like that.

Natalie Shmulik: I think there are some remarkable incubators and accelerators in this country and we work with many of them. Actually during the pandemic, we launched an incubator group where we met once a week actually to talk about what was happening in each incubator city and what could we all learn from one another. And it turned into an incredible collaborative environment to the point where we’ve continued; we meet monthly with incubators, like La Cassina from San Francisco, Hot Bread Kitchen in New York, we meet with Common Wealth Kitchen in Boston; a really incredible group of incubators, that all are here to serve entrepreneurs and I think everything they’re doing is incredible and we all can learn from one another, you better as well.

But I think one thing, certainly at the Hatchery that we pride ourselves on is, we are a community of entrepreneurs. So a lot of times just understanding the journey of entrepreneurship is very important when talking with entrepreneurs, if I hadn’t gone through it myself, if I hadn’t run and operated a restaurant, I probably wouldn’t have fully understand the immense highs and drastic lows that you experience. When I talk to the entrepreneurs we work with, I can really sympathize and understand that this is why it’s important for us to have a holistic program because we can’t just say do it this way and that’s it. This is a passion project for most entrepreneurs and so we have to be there to understand why they’re in this industry, we have to help them navigate their way to success, and in some ways, we also have to help them figure out how to close down the business because the proof of concept wasn’t there and costing too much money. It’s just not the right idea. But it’s still we want them to understand the success and even going through the journey.

There are both sides of it, where we’re there to be a supporter, whether it’s moving in another direction or continuing growth. And I think that translates in the community that’s formed at the Hatchery, which is this very collaborative community, where we have very high profile CPG, and resource companies like Ingredion and Kellogg, RXBAR, Griffith Foods, Synergy, who are all producing on site at the Hatchery and provide a service to the entrepreneurs. So if our startups need help with shelf life, or reducing sugar or understanding packaging, or scaling production, they can knock on their neighbor’s door, and they can have access to these incredible professionals who have great experience in this industry. Traditionally finding a food scientist on your own can be really tough and really expensive. So this collaborative community has been wonderful. And we have ACCION our micro lender on site, who’s our parent company, so there’s that additional resources; if you need a loan, if you need financial support, you’ve got that on site and just being as well rounded as possible. We wanted to have as much as we could under one roof. So that’s not just producing there. But you’ve got your community, you’ve got your curriculum, you’ve got financing everything that you need on site.

Diana Fryc: Well, what’s kind of fun about this community is it’s kind of symbiotic. So you’ve got this young, scrappy, ‘I don’t know what I’m doing’ entrepreneurs that just have this passion, they’ve got this set of mentors that are on site. And simultaneously you have these people and these brands that have been around forever sometimes they could be even considered like the old stodgy skies and they are surrounded by this youthful, like powerful energy and the different kinds of teams give each other and support each other in different ways. That’s super fun!

Natalie Shmulik: Exactly. I think it’s important to bring everyone into the conversation and I know traditionally it can be scary as a startup when you’re thinking; why am I talking to Kellogg’s? It can be overwhelming.

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Or sometimes there’s that fear or that stigma that comes with it; are they going to try to take my idea? That’s not what they’re looking for. They’re looking to give back in many ways, but they’re also looking to learn. Because there’s so much that these big brands can learn from these startups and there’s so much though, that the startups can learn from these big brands who have stood the test of time; and so we always really want to take away that stigma and the same thing with big brands with each other. Our fiscal sponsors are Kellogg’s, Conagra, Griffith foods; we never thought Kellogg’s and Conagra would come to the table together. But it makes this environment so much more exciting because, again, if we have these conversations together, we can do much more for this industry.

Diana Fryc: Yes, well, do you feel like brands coming out of the Hatchery have a distinctive or unique POV?

Natalie Shmulik: I think they might. Yeah, I think in some cases they do. I think in some ways, they’re more streamlined, so the timeline it takes to have your idea on paper and launch to market is accelerated and that was a hole of ours because over eight years of working with startups myself, I saw, oftentimes, you would have an idea and you’re perfectionist, and so you kind of drag your feet a little bit; and then three years later, you’re still working on the idea, someone else has launched it. I think it’s important to always adopt lean startup methodologies and just get to market as quickly as possible. So we try to reaffirm, it doesn’t have to be perfect. You need to follow the rules, you have to make sure that you’re being safe, that you’re registering as a business entity that you have insurance that your manager ServSafe, whatever it is, you need those pieces in place.

But once you have those pieces in place, the most important thing is to get feedback from your customer and packaging. We spend thousands of dollars on packaging design and nutrition labels, only to find out that someone says this is too salty. You’ve spent all this money and time and energy and I have to go back to the drawing board. I think one thing that Hatchery entrepreneurs are able to receive is just a shortened timeline, they’re able to save time, whether it be; we’ll ask the questions that you may have not known to ask, we’ll get you the information you need, and we’ll make sure that you’re launching your concept to market so it buys back some of that time that traditionally you might be looking at for launching a food and beverage concept.

Diana Fryc: So do you feel that some of the brands and the entrepreneurs coming out of the Hatchery program are a bit more coachable than the other programs or one is not coming through a program like yours at all?

Natalie Shmulik: I hope so. I do think that there is that element of openness and acceptance of feedback that Hatchery entrepreneurs are coached to accept and be comfortable with. We have a vetting process, especially for those producing on site and we believe in collaboration over competition. So if an entrepreneur comes to us and says, “Hey, I just want to get in a kitchen. I don’t want to be involved in any of the programming. I don’t want to come to a networking event. You’ll never see me in a class.”

We probably wouldn’t accept them because it’s important for us to have this thriving community where entrepreneurs want to connect with one another and want to use the resources we provide because that is important. And for us, the hope is that yes, when a Hatchery entrepreneur leaves the nest in a way that they are comfortable with receiving the feedback and working with big brands and working with investors potentially, but that they also understand the power of their brand and when to be confident and know when to really communicate the why of their brands. Really having that strong characteristic of always being open to feedback and suggestions, but also really firmly understanding why their brand exists.

Diana Fryc: Understood. Sometimes we work with brands in all stages. And sometimes the coachability of a brand is kind of an indicator of where the work really needs to be done with a brand when it goes through a rebrand. Sometimes what we find is it’s actually not the design or the messaging itself. It’s a little bit of organizational thinking and development that needs to happen so that everybody’s in alignment with how the brand’s going to move forward. I think that’s where my question is really coming from and it sounds like The Hatchery in some way, shape or form, there’s not really a vetting process per se but there’s a set of expectations that you guys are forward with and a brand who wants to go through the program understands what their commitment is. There’s a little bit of a pre-vetting or some vetting to come into the program anyways, is that an accurate assessment?

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Natalie Shmulik: There is. And yeah, we do have that vetting component for producing on site. And there’s that expectation for all of our members. And your point is exactly right. It’s important to recognize that we are working with entrepreneurs and these entrepreneurs come from all different backgrounds, some have financial acumen, some might have been attorneys, some come from a culinary background. And I think the best advice I ever received is that whenever speaking with an entrepreneur, you should always make sure that if you are going to provide feedback or input or suggestion, that you coach them to believe that the idea was their own.

You can’t just come in and say, “Oh, this is awful. You need to redesign this whole thing.” That’s their baby. A lot of passion and energy that went into producing what they feel is something beautiful. And again, we want to be careful too, because our opinion is our opinion. We’re not right, either. But we try to take a look at the industry landscape. And this is why we say, “Get your product to market so you get feedback.” Because if your customers are telling you what you need to hear and if you don’t want to hear it, that’s problematic, because you’re not going to have sales and you’re not going to have a business. We try to approach it in a very sensitive manner, where we try to pull the story out of the entrepreneurs, so we understand why they launched this business, what’s important to them, and through that, we can kind of work together to figure out what really does make sense whether it be the size of the product, the design of the package, the name, the slogan, everything like that, because you know better than anyone else, your brand is number one. If you don’t have a strong brand, there’s a lot of copycats in the industry, that’s an oversaturated space, there’s very few spaces that are drastically innovative right now. It’s important to have a drastically innovative brand and a brand that has values consumers can connect with. I think it’s always important to really spend time working with the entrepreneur in a way that they understand why you’re giving them the feedback you’re giving them.

Diana Fryc: Tell us about a couple of success stories or brands that you came out. Well, just anybody, any couple of brands where you’re like, “Yeah, these few brands, or these couple of brands have been our jewels so far.”

Natalie Shmulik: Yeah, there’s so many, and yet at the same time, we’re still a young startup ourselves. I’m sure there’s going to be many coming down the pipeline, but a great one that you’ve worked with Emily Griffith from Little bucks. She’s just skyrocketed her brand of Sprouted Buckwheat Snacks and has done so incredibly well. And we’ve had amazing brands that have started to grow like Chi Fresh Kitchen, which is a catering company, they produce meals for individuals who are facing food insecurities. They produce meals throughout. They have an incredible business and they’re also a group of women who hire previously incarcerated women to be part of the company. And they launched in the hatchery this year. And they’ve already received an incredible grant, they are growing out of the space. They’re building their own kitchen space. And that’s story we love.

We have companies like you know Kororin they have an Onigiri Shuttle, beautiful packaging. If you like Japanese food, I mean, they’ve done incredibly well. And again, knowing that delivery is just skyrocketing right now, going so well. Maya Camille from Justice of the Pies, she’s participating in the James Beard Awards, she’s received a ton of press and just continues to work nonstop to provide her incredible savory and sweet pies. So there’s just so many companies that we’re just so proud to be there to support them.

Diana Fryc: We’ve talked about some of the entrepreneurs in the goal when the mission of The Hatchery now. Let’s talk a little bit more about support from the industry. We’ve talked about Kellogg, we’ve talked about — oh, I’ve forgotten already is a few names that you’ve mentioned at this point. But are you guys looking for additional partners? And if you are, what kind of support do you typically look for or do you get? Is it always just on site innovation? Or is it bigger? Does it extend out into — I don’t know what it might extend out to?

Natalie Shmulik: Yeah, we look for partners throughout the supply chain and that’s important because we are not experts in everything. And so we want to find the experts. But we also want to make sure that we have shared values. It’s important the same way we look for those values in the entrepreneurs we work with, we look for the same thing from our partners.

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For us, it’s important that our partners understand our mission and understand our goals, and are here again to collaborate. And that’s something that has been key from day one and why we have such incredible partners who stuck with us since the very beginning. The Kellogg’s of the world, the Conagra, Griffith, Synergy, Ingredion, they’ve been exceptional partners, and we’ve had the chance to work with so many others Bell brands, PepsiCo Foundation, Mondelez, there’s just so many incredible companies who come to us, understood our mission, believed in our mission and wanted to support it. And so we’re always looking for ways to build on those partnerships. And our goal is always entrepreneurs first, so we have to make sure that that partnership ultimately supports the entrepreneurs that we serve. So now we’re actually spending a lot of time focusing on partnerships with distribution companies, with retailers. We want to make sure we kind of close the gap throughout so that we have experts who can talk with entrepreneurs every step of the way. Where are you sourcing your products? Where are you sourcing your packaging? Where do you print your packaging? Which distributor do you use? All of these aspects are so important. So yes, we’re always interested in connecting with, learning from and working with other partners in the industry.

Diana Fryc: Is there a Rick Bayless story here that I’m forgetting.

Natalie Shmulik: There is. We have the culinary impact program, which we partnered with Rick Bayless on and also on site at The Hatchery, and it is a program to support youth from the south and west side of Chicago. It’s a subsidized program where they get culinary training. Unfortunately, due to the pandemic, we did put the program on pause, because we just realized the industry looks different right now, especially food service. So we’re taking a step back and trying to determine what are the needs right now? But in the meantime, we pivoted and in that kitchen, we’ve now launched what we call Hatch-Made Meals. And this is a program where we actually pay catering companies to produce meals, which are then donated to local organizations partners who help support those who are facing food insecurities. So we are now producing 500 meals a week, all these meals are donated. But even more important is these entrepreneurs who were really struggling and, especially for catering companies whose revenue hit zero due to the pandemic, they now are able to restart their business to keep their business going with this steady stream of revenue. So we wanted to find a way, how do we support these companies, and we’re lucky enough to have a very generous foundation partner, sponsor the program for a year.

Diana Fryc: In Seattle, we have a place called FareStart. I’m not sure if you’ve heard about it, but it’s a restaurant. And the concept is they recruit on some sort of rotation, they have chefs from around the city to come in and run the restaurant for a period of time. And the goal is to train people transitioning out of homelessness, how to work in a restaurant. They’re working back of house, front of house, that sort of thing. And when COVID hit, of course, it all shut down. Now they’ve shut down front of house, but they’ve kept the back of house and they’re teaching meal prep and everything and these meals are being distributed through the school system because the schools here are delivering lunches and dinners and breakfasts for free. Half of those meals are being prepped and donated by FareStart. Similar program, a little different setup, but similar. And the distribution then is through all of the public schools, and so therefore much easier for families to access. It’s been really quite successful.

Natalie Shmulik: That’s so good to hear. I love programs like that.

Diana Fryc: I do too. And it’s great. The food that comes out of there is pretty great too.

Natalie Shmulik: That’s really important. There’s a sense of dignity to it as well. People love to eat, and they should eat good food.

Diana Fryc: Talk just briefly about this forecasting magic that you have. Let’s talk a little bit about what that means. And are you using it right now? And if so, how is that being used? Is it within The Hatchery or is it elsewhere?

Natalie Shmulik: Yeah, this is one of my personal passions. I love trend forecasting, but it comes from an immense amount of research that I do every day. So I read articles very consistently. We also partner with data companies, IRI data social and Mintel are all partners of The Hatchery and an abundance of incredible data that helps not just our entrepreneurs but helps us as an organization understand well the industry is headed. We take a look at the big data, we take a look at information that’s already well immersed in the space and then we also utilize our own data.

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So we run a monthly starting a food business class, we’re the only ones in the city that runs this. And we see 30 to 50 new food and beverage entrepreneurs every month. And that gives us very keen insights because these are now consumers turned entrepreneurs because we see a gap in the industry. Typically, it’s something that they want, but can’t access. So they feel I need to make this and meet this need. And that gives us really great insights into, okay, what is it that consumers right now are seeing as being missing? What is the new crop of entrepreneurs going through right now? So we utilize all these pieces together and develop theories, develop ideas on here’s what’s going to happen down the line.

And so currently, I contribute to food business news. So every other month, I do trend forecasting on different subjects. I’ve talked about the cannabis space, I’ve talked about retail, I’ve talked about chef crafted products, which I think is going to be a huge, huge opportunity. You mentioned Rick Bayless, with Frontera, one of the most famous chef produced acquisitions. And then everything in between, Thomas Keller’s got a line of chocolates. And now with all the displays chefs and restaurant tours, I think you’re going to see a lot more of that. We’re constantly keeping our eyes open, and thinking through what’s going to happen so that we can best educate our entrepreneurs. But then we also share insights and present to a lot of innovation teams at big CPG companies and throughout. We’re always excited to share that and our insights on incubation. So we support incubators from all over the world who are trying to create similar concepts and it’s always fun to share our learnings.

Diana Fryc: If you’re aren’t already, or maybe moving towards being the hub of incubators, maybe a little bit. They might be an ambitious statement there. But I’ll just throw it out there. Why not?

Natalie Shmulik: Yeah, our goal is really we want to be that that standard for incubation, best practice. But we learned so much from the incubators that are out there too. It’s equally rewarding just hearing some of the great programs that others are doing, and we can kind of exchange information.

Diana Fryc: Yeah. We are kind of wrapping up here at the end, but along that line of forecasting and innovation, I always ask all of my guests, what kind of trends do you see coming up in the future that have kind of got you excited? I don’t know if it’s flavor, if it’s a distribution model or something? I don’t know. But what are you excited to see right now?

Natalie Shmulik: Wow that is a great question. There’s a lot of innovation happening right now. I think in flavor, we’re actually going to be talking about some exciting flavor innovations at our fundraiser. So on December 10^th, and anyone can register, we’ve got our annual fundraiser, it will be virtual and Synergy Flavors is actually going to be talking about some flavor insights. But lots in the beverage space, I would tell everybody right now, expect to see some incredible innovation and vibrant flavors coming in the beverage space. That’s one thing that we saw a lot of when everyone shifted to meal delivery, or curbside pickup was people were ordering meals, but there were fewer orders of beverages because you can go to your local store and buy a coke or whatever it might be. But consumers actually wanted the same experience when you go in a store. And we make our own bitters, we make our own shrubs and really fun, vibrant cocktails, or mocktails. And we’re starting to see that with restaurants offering cocktails kits. But I see a lot in flavor innovation for beverage. Retail is going to be the biggest piece of innovation, but physical company going to drastically change.

And I think the two areas that we focus a lot on are the bulk bin area and the non-food bar, but also the frozen space because that is going to be one of the most unique opportunities in that frozen aisle which originally, you kind of stay away from the frozen aisle or you assume, this is like a backup plan, I’m going to get a frozen pizza. That’s not the case anymore, the innovation and the quality of food coming out of frozen aisle that will continue. And that’s actually the next topic I’m covering for food business news is actually going to be on the frozen baked goods space, which you’re going to see a lot of interesting stuff around there which I’m starting to see some great launches. So that’s going to be exciting to see and we’re kind of paying close attention. We have some really good ideas of what’s going to happen in retail and how there will be some shifts in the way you navigate the retail environment.

[00:40:00]

It might shrink a little bit, but it’s going to be a much safer and more exciting experience as you go shopping because now it’s kind of a rushed, uncomfortable experience mostly because of the concern with COVID. But there’s a lot of opportunity. Emily from Pop Up Grocer has already been doing that, the small curated, fun base that you’re excited to go into, it’s a place of discovery. There’s going to be a lot of innovation there. I think the other thing, it doesn’t relate as directly to food, but I think the biggest thing we’re going to see right now is changing in the times we eat and what we eat during those times. We see in a lot of cities right now, there’s limited dining, if at all indoor dining. And because more people are working from home, traditional lunchtimes might change. You might see people starting to have lunch at 10am or 3pm, with dinners. And there might be some new categories. We know there was this pre-breakfast category. We’re working out or you just wanted a bite before you launch into your day and have a more robust breakfast, there’s probably going to be these interesting new snacking times as people continue to work from home.

Diana Fryc: Day parts are changing, that is really fantastic. Would you be able to if you remember, in all your things, send up a flare or shoot me a link of that article when it comes live. I would love to read that.

Natalie Shmulik: Yeah.

Diana Fryc: Is there any special fact about The Hatchery that you’d like to share with people? Like if there’s just the one takeaway here, some special fact that you should know about The Hatchery before we wrap up?

Natalie Shmulik: Oh, my gosh, there’s so many. I think the most important thing is we’re in a time now where we recognize that food is an essential business. And that’s important for us all to walk away from this realizing that food is incredibly powerful. And so what we want to do is we want to make sure that power is firstly distributed fairly, because there’s so much opportunity and innovation and we want to give everybody a voice in the space. And we just want to make sure that we can bring the community together, we want the community to come together, we want all of the folks in the industry to come together and really try to support the neighborhoods that we all feed and the entrepreneurs that are doing such great work. And I think that’s the biggest thing, I think now’s the time for us all to really collaborate and to just create those opportunities. We know that sustainability is more and more important, we know that accessibility is more and more important. And so, that’s something that’s always top of mind at the Hatchery is safety, accessibility and just creating a better world as much as we can.

Diana Fryc: Yes. Excellent. How are you keeping yourself sane these days? That’s a big question.

Natalie Shmulik: The question if I am sane, I think the biggest thing is to give yourself space. And this is something we try to work on with our entrepreneurs on as well as just being okay with not being okay, every now and then and making sure that you can also disconnect and everybody copes differently and at different times. And so it’s important for our team, we’re dealing with different things and some adjustments for sure. I think for me, making sure that I can detach whenever possible, get outside, take care of my mental and physical health, all very important. We’ll see what happens in the winter right now, because it’ll be a very different story. But I think that’s the most important thing.

I think some great advice that we’ve heard from other very successful entrepreneurs is, to find hobbies or interests that aren’t necessarily related to your business, because I’m guilty all the time, where everything I read, everything I do, everything I experience is somehow connected to the food and beverage industry. But sometimes it’s nice to get a very different perspective, dive into. We have one entrepreneur who took up knitting and that kind of allowed her to think about things differently. Some people might want to, “Hey, I’m going to learn a beauty class,” or something like that, or learn a different language. I think, sometimes just breaking away from the day to day so that you can get a really good perspective on how everything’s working. And we learn from other industries, too. That’s a nice way to kind of move away from what we’re always doing and get a little bit of a break from it all.

Diana Fryc: Wow. So before we go, if anybody wanted to reach out to you either, just to learn more, participate in your program in some way, what’s the best way?

[00:45:02]

What’s your preferred way of them reaching out to you? Is it LinkedIn? Or do you want them to email you directly?

Natalie Shmulik: Sure. To reach out to me, they can certainly find me on LinkedIn. And you can see my articles there, all of that. If it’s for The Hatchery, the best way is come check out our website, we always love to share stories on our website, we have all of our programming listed and more information about our mission. So www.thehatcherychicago.org or you can always email us at info@thehatcherychicago.org as well. Or you can leave a comment in our inquiry form on our website. But we have social media channels. We have Facebook, we have Instagram, we have Twitter. We love connecting with people, food enthusiasts, entrepreneurs, industry experts, everybody. We look forward to hearing from everyone.

Diana Fryc: Well, thank you. That’s the end of our time, Natalie. I thank you so much, not just for joining me today but for the work that you guys are doing with The Hatchery helping just change CPG food in every way, shape, or form. You really are touching all parts of the business and it’s quite a task. So thank you.

Natalie Shmulik: Thank you so much. Thank you, I also appreciate you taking the time to include me in the discussion today. And very much look forward to many more future discussions.

Diana Fryc: Yeah. This episode is sponsored by Retail Voodoo, a creative marketing firm specializing in growing, fixing and reinventing brands in the food, beverage, wellness and fitness industries. If your naturals brand is in need of positioning, package design or marketing activation, we’re here to help. You can find more information at retail-voodoo.com.

And so there you go. I hope you enjoyed this episode. Thank you so much for hanging out with us today. And if you haven’t already, be sure to subscribe to this channel and share with your network. Until next time, be well and do gooder.