The food industry is a competitive one. But at the same time, it can be really lucrative.
Thousands of food startups have emerged in the last years and a lot of money has flown into the sector.
However, the majority of these startups have since shut down.
In this article, you can find some of them as well as an analysis on why they failed.
15 Failed Food Startups
1) Dinner Lab
Dinner Lab offered a culinary experience that would take diners away from the traditional dining experience and let them share new dishes with a group of strangers in unusual place. Many were the problems they had to face, including the timing at which they offered the meals.
Details of the startup:
Founders: Brian Bordainick, Francisco Robert, Zach Kupperman
Country: United States
Started in: 2011
Closed in: 2016
Nº of employees: 10-50
Funding Amount: $9.1M
Specific cause of failure: Bad business model
You can read more about Dinner Lab‘s failure here.
2) Dinnr
Dinnr was a web platform which allowed customers to select a recipe on the website and order pre-measured ingredients accompanied with printed instruction. Dinnr failed because from the beginning there wasn’t a real market need for the business.
Munchery allowed users to order this food and have it delivered straight to their doorstep. Despite its ambitious mission, Munchery could not deliver on the gourmet experience that it promised and closed its doors to users after being unable to build a profitable business model.
TakeEatEasy came into the on-demand food market with the purpose of enabling quality restaurants to provide a reliable delivery service for their customers. The main problems that TakeEatEasy experienced was related to capital and profit. They closed their doors after 3 years.
You can read more about Take Eat Easy‘s failure here.
5) SpoonRocket
SpoonRocket was a pre-made food delivery service with a team of chefs that produced a selection of healthy meals each day. SpoonRocket focused on customer acquisitions but when their finances started going down, they failed to fundraise aggressively in order to stay afloat.
Details of the startup:
Founders: Anson Tsui, Steven Hsiao
Country: United States
Started in: 2013
Closed in: 2016
Nº of employees: 10-50
Funding Amount: $13.5M
Specific cause of failure: Competition
You can read more about SpoonRocket‘s failure here.
PepperTap provided an online shopping platform that addressed customers' need to buy groceries from local markets by delivering the goods to their doorsteps. Their cause of failure was the deep perception in customers' minds that they should provide cheaper solutions to their needs.
Flowtab was a mobile app that wanted to use technology to solve the problem of long queues in bars and hospitality venues. They tried various business models but could never find one that was both feasible and profitable, so they decided to shut doors.
Dazo was a food tech startup based in Bangalore which emerged as a “food on demand” company that partnered with few selected restaurants and took care of the food delivery logistics. Two of the main reasons the company decided to shut down were fierce competition and lack of funding.
Maple was a startup that prepared and delivered meals in New York. The cause of failure was that Maple was losing money on each delivered meal and it only began making a 30 cents profit on meals from 2016. In 2017, Maple was shut down.
Sprig delivered high-end meals to customers who were looking for healthy and nutritional menu choices. Sprig tried to handle all elements of the experience, but soon found the whole process time consuming and really expensive. They shut down in 2017.
Details of the startup:
Founders: Gagan Biyani, Matt Kent, Morgan Springer, Neeraj Berry
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11) Teforia
Teforia was a tea brewer that would supposedly yield the perfect cup of tea by combining traditional brewing with the power of smart technology. The first reason why Teforia was deemed to fail was the absence of market fit for the product. After a few years, they shut down.
Juicero was a juice company that collected fresh organic fruits and vegetables for the customers, prepared, and put them in special single serve packets. Juicero failed to build a profitable business after raising a substantial amount of funds under the claim of innovation and disruption.
Steve and his housemate started a food business to solve their problem that food was too expensive. Within a few months, they were making +$110,000 per month. But the business was soon involved in some legal problems, which forced the founders to shut it down.
Kevin was the founder of Melon, a food delivery startup aimed at being more cost-effective. Melon’s unique approach was quickly validated through an MVP and in just two months, the business grew to $10k/mo and 500 users. However, they realized becoming profitable would be hard and decided to discontinue the service.
Amit is a hard-core sales professional, who decided to set up a home-made food business with his wife. They started investing $1,200/month to set up the startup and get the first customers. However, once running they had to confront a big problem: the prices of their competitors were much lower. After some pivots, they decided to shut it down.
Details of the startup:
Founders: Amit Gogia
Country: India
Started in: 2016
Closed in: 2018
Nº of employees: 1-10
Funding Amount: None
Specific cause of failure: Competition
You can read more about The Punjab Kitchen‘s failure here.
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I hope you found useful this collection of 15 failed startups in the food industry.
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