Future-of-Food, a World Business Chicago Venture Summit that has grown over the past couple of years, returns next week with a bigger space and a full week of events focused on the city's food startup scene.
This year's summit, however, takes place against the backdrop of the sudden closure of Dom's Kitchen & Market and Foxtrot Market that has shocked the local business community. Outfox Hospitality, the parent company of Foxtrot and Dom's, filed for Chapter 7 bankruptcy on Tuesday. Foxtrot had 16 locations in Chicago, while Dom's had two, with plans for a third in River North.
Abin Kuriakose, chief strategy and innovation officer at World Business Chicago, said the city's economic development partner organization and other leaders in Chicago's food startup scene see this week as a chance to "step up" and champion the ecosystem amid the devastating loss.
Kuriakose said the closure was a shock to just about everyone as both food brands had become platforms for entrepreneurs to launch and expand their products and build their brands. He hopes that next week's events like Startup Day — which will feature more than 120 food and ag startups, the majority of which are fundraising for the next 12 months — can help start to fill that void by fostering meaningful connections between food innovation startups and investors.
Investment slows for foodtech in Chicago
Food innovation remains one of the city's fastest-growing verticals by growth capital raised, with investment increasing 77% between 2019 and 2023, according to World Business Chicago research. However, within that time frame, fundraising in the space has fallen from the highs of 2021, when $754 million was raised, to just over $200 million last year.
Jordan Tepper, co-founder of Apologue Spirited Liqueurs, which counts Foxtrot and Dom's as among its first retailers, worries that one of the biggest impacts of the store closures will be that investor capital for food and beverage brands will be harder to come by.
Apologue is building out a new facility in Pilsen that will house all of its production and have a consumer-facing experience, which it's aiming to open in August. While the company was hurt by a number of open invoices from Foxtrot, Tepper said he feels relatively fortunate as he knows several local brands that either got their start with or had a meaningful component of their sales from Foxtrot.
"One of the nice things about Foxtrot was it didn't have a huge selection. So if you were on the store shelf, you weren't one of 20 different canned margaritas — you were one of two. Now it's a more competitive retailer set," Tepper told Chicago Inno.
Tepper said that the loss of Foxtrot will create a retail gap for a lot of young food startups.
"It's going to be harder for food brands to get to that critical mass, and we're going see less brands be able to just start and emerge [as] we did over the last five to 10 years with folks like Foxtrot," he said. "But I also think Foxtrot opened people's eyes ... there were certainly things that they were doing really well, so I'm interested to see if someone is able to step up and try to fill that void."
Foode, a local artificial intelligence-powered digital dining concierge startup, is planning to use next week to introduce a new platform to the community. The Chicago food innovation startup is working with World Business Chicago to turn Chicago into a virtual dining game board starting Saturday, May 18, through Sunday, May 26. Future-of-Food Week activation is open to anyone dining at participating venues like Bandit, Bar Siena, Barrio and others. Guests scan the QR code signage and claim exclusive offers from select restaurants.
"The motivation for participating in this week is for Chicago and those coming in to come together as a community and show how strong we are," Sarah Perkins, user acquisition lead for Foode, told Chicago Inno. "Chicago is such a food city, and we need to be able to show that yes things like [the Foxtrot and Dom's store closures] can happen, but we can all bounce back together stronger here."
