Soup-To-Nuts Podcast: Winners of Real California Milk Excelerator Open Innovation competition shines light on dairy’s growth potential

The brainchild of the California Milk Advisory Board and innovation advisory firm VentureFuel​, the Real California Milk Excelerator​ is the largest global dairy accelerator that offers innovators and entrepreneurs a chance to access non-dilutive funding, mentors, investors and buyers through its three-month program, which culminates in an annual pitch slam where four out of eight finalists will receive $30,000 to expand their business in California and a chance at a grand prize of $100,000 to be awarded one year later to the business with most promising growth.

With an open innovation theme, this year’s accelerator attracted upwards of 70 applicants from five countries, and while only four walked away winners from this cohort at the Nov. 16 event, John Talbot, the CEO of the California Milk Advisory Board, shares in this episode of FoodNavigator-USA’s Soup-To-Nuts podcast ​how the process revealed where dairy may be headed, including emerging and unexpected areas for growth, as well as which of dairy’s diverse attributes appeal most to consumers. Pitch slam winner Andrew Arbogast, founder and CEO of Arbo’s Cheese Dip, also shares his experience and aspirations for his businesses and the dairy industry.

[Editor’s Note: Never miss another episode of FoodNavigator-USA’s Soup-To-Nuts podcast – subscribe​ today.] ​

Dairy’s indulgent properties, health benefits go head-to-head in competition​

Over the course of the accelerator program and competition, Talbot said dairy’s duel ability to play well in the better-for-you and the indulgent spaces emerged as a central theme that also underscores its diverse potential from an innovation perspective.

He explained that the eight finalists that pitched on Nov. 16 either focused on a decadence dairy can offer, including its rich taste and creamy texture, or they called out its many health benefits, which include probiotics for gut support, protein for building and maintaining muscle or its ability to support immunity.

Of the eight finalists that presented, five favored indulgence, including: Arbo’s Queso Dip​, which makes a keto-friendly cheese dip; New Alchemy Distilling​, which makes canned clarified milk punch cocktails; Amazing Ice Creams, which makes crispy cookie wafer ice cream bars under the brand Cookie Wild​; Petit Pot​, which makes French-style dairy desserts in paper-based cups, and The Empanada Shop​, which envelops Mexican cheese in a flaky crust. .

The remaining three “were much more in tune with what is now being called food as medicine,” and they offered specific health benefits, Talbot said.

They included Noorysha Yo-Gut​, a speciality probiotic dairy product designed to support gut health, Shakewell​, a high protein drink made from upcycled whey, and WonderCow Nutrition​, an all natural bovine colostrum powder supplement that promotes immunity, muscle recovery and gut health.

Of the better-for-you products, only one made it to the final four: WonderCow Nutrition, which Talbot acknowledged surprised him but delighted the judges. The other winners include Petit Pot, Cookie Wild and Arbo’s Queso Dip.

The ultimate uneven divide tipping towards indulgence didn’t surprise Talbot who said it is tough to go head-to-head with dairy’s creamy texture and rich taste.

Indulgence may dominate, but snacking, food as medicine offer opportunity​

Even though the Empanada Shop didn’t make it to the final four, Talbot said it was representative of another major theme – and opportunity – for dairy that emerged not just in this cohort but also previous renditions of competition, and that’s snacking.

“Dairy has all kinds of ways of fitting into the snacking world,” which brings together several trends in which dairy also fits, including growing demand for international flavors and cuisines, he said. “That’s a big opportunity.”

Talbot reiterated the opportunity for dairy within the growing food as medicine movement, which he characterized as significant even though only one player in this space made it to the final four.

“There are so many ways that dairy, you know, can play in that world, you know, whether it's gut health, or protein, or lactoferrin ... and we know there are the 13 essential nutrients in in milk. But there are 1000s of micronutrients in milk that we know very little about. Lactoferrin is one example, and obviously that got a lot of press during the pandemic because it's very helpful with you know, your immune system,” Talbot said.

Talbot says he also sees opportunity for dairy beyond food and beverage, including from submissions in prior years that include a whey based bio-plastic packaging, a milk-based bath bomb, pet food, textiles, make up and more.

Non-dilutive funding, guidance helps startups scale​

While the Real California Milk Excelerator was designed to find and promote new uses and demand for California dairy, the program is one of the few that offers non-dilutive funding along with guidance of how to effectively use it to scale.

Andrew Arbogast, founder and CEO of Arbo’s Cheese Dip and one of this year’s our winners, explains the combined opportunity for funding and guidance is what attracted him to the competition.

He explained that the twice weekly meetings with mentors from across the value chain organized by the program were “so valuable” because they allowed participants to ask questions they might otherwise be scared to ask or not know who to ask, and because they made themselves available for one-on-one conversations.

“I remember the marketing, the legal, the manufacturing, the co-packer conversations and mentors, and there was a PR one, and [I thought] this is amazing information and actually things that apply to me in the state that I am in” as a scaling startup, he said.

“And I haven’t spent a dime doing this,” because it has all been paid for, which “is a blessing,” and “shows what the CMAB does and how they invest in and grow and also support the brands that they need so they can increase their volume as well,” he said.

Arbogast said he was equally influenced by the dairy tour organized by the program, which he said gave him new perspective on the importance of high quality ingredients and what it takes to create them.

Looking forward, Arbogast said he eager to continue working with the Real California Milk Excelerator over the next year and plans to use this $30,000 prize to build his business’ marketing and distribution, which has rapidly grown since he entered the program.

Applications for the next Excelerator open in the spring​

Plans are already in motion for the 6hth Real California Milk Excelerator at which one of the four winners from this month’s competition will be awarded an additional $100,000 in support based on continued performance over the coming year. The 2022 grand prize winners from last year’s cohort announced during the pitch event this month were dosa by DOSA and Wheyward Spirit.

For those interested in learning more about the competition visit HERE​. Applications for the next cohort will open in the spring.

With that we have reached the end of another episode of FoodNavigator-USA’s Soup-To-Nuts podcast. I hope you will join me again for another installment and to help you remember, I encourage you to subscribe. Until next time, this is Elizabeth Crawford wishing you a productive, profitable and safe week.