Source | FBIF Food & Beverage Innovation ID | FoodInnovation Author | FBIF
Supermarkets can also serve as an 'incubator.' In March of this year, PepsiCo acquired the prebiotic soda brand Poppi for $1.95 billion. Poppi first entered consumers' view through the shelves of Whole Foods Market, the U.S. natural and organic food retailer, before being acquired by the beverage giant. Image source: PoppiWhole Foods Market has indeed become a "big shelf" for innovative products. The honey lemonade brand Me & the Bees, whose founder participated in Whole Foods Market workshops at age 8, set up a lemonade stand outside her home for five years before Whole Foods became its first major retailer. When Nature's Fynd, backed by Bill Gates, launched the "world's first" fungal protein yogurt, they struck an exclusive deal with Whole Foods, selling the product only there. Hint, the sugar-free flavored water popular in Silicon Valley, launched at Whole Foods and saw its valuation exceed $200 million in 2021. Whether it's star brands eventually acquired by giants or innovative products just starting out, Whole Foods Market has provided indispensable support during their critical growth phases: it serves as a "testing ground" for brands to reach targeted consumers and offers an invisible "endorsement" for these lesser-known names. Inadvertently, Whole Foods Market has taken on a role beyond that of a mere channel. Image source: Nature's FyndUnicorns Poppi and Hint: Their First Shelf Stop In March, prebiotic soda brand Poppi was acquired by PepsiCo for $1.95 billion. Over a decade, the product moved from home kitchens and farmers markets to Whole Foods shelves, then its founder appeared on a startup show, and finally it was acquired by PepsiCo—Whole Foods became a key step in its path to scale and brand development. Initially, Poppi founder Allison's homemade drink was shared only with friends and family. Encouraged by her family, Allison decided to bring it to market, starting with a stall at the local farmers market, building the most basic retail business. No one expected that this small brand, just finding its footing at the farmers market, would hit a turning point within three weeks—all thanks to Whole Foods. Allison said that when Poppi had only a little local fame at the farmers market, Whole Foods' purchasing department proactively approached her, asking if she wanted to put the product on their shelves. Image source: PoppiFor Poppi at that time, entering Whole Foods was both an opportunity and a challenge. The brand's production was still "handmade": Allison spent 10 hours a day manually bottling drinks, a capacity that couldn't meet supermarket supply demands. But Whole Foods' olive branch made her realize this was a "once-in-a-lifetime opportunity." To seize it, Allison and her husband quit their jobs and raised $125,000 to scale production: "To sell in stores, we needed a commercial kitchen. We signed a lease immediately and formally set our growth plan." With this determination, Poppi quickly transitioned from a "cottage workshop" to "standardized production" and successfully entered local Whole Foods stores. Leveraging Whole Foods' health-conscious customer base and channel endorsement, Poppi's business quickly got on track. In 2018, the brand was invited to appear on "Shark Tank," where Allison and her husband impressed investors, injecting new momentum for expansion. Today, Poppi has gone far beyond Whole Foods shelves. It's now in over 120 mainstream U.S. retailers, from Costco and Target to 7-Eleven and Kroger, with full offline distribution. Online, it's also strong: according to Food Dive, Poppi is one of the top-selling beverage brands on Amazon. Image source: PoppiIf Poppi's case shows Whole Foods' keen eye as a buyer, the story of Hint, another beverage, demonstrates Whole Foods' openness and friendliness to new brands. Hint, the sugar-free flavored water, also started at Whole Foods. Founder Goldin wanted to capture health-conscious consumers, and Whole Foods was where they shopped most. So during product development, she proactively sought advice from Whole Foods, and even before the product officially launched, it caught the interest of a regional manager. But after Goldin submitted product materials to Whole Foods, they didn't reply to her emails or calls. To secure a spot at Whole Foods, Goldin decided to take the initiative. The day after the product launched, she brought 10 cases of Hint directly to Whole Foods. Whole Foods gave her a chance, letting the 10 cases "test the waters." The result was unexpected: all 10 cases sold out the next day. Image source: HintOf course, not all partnerships stay in the "honeymoon phase." During the 2008 economic crisis, many retailers Hint worked with were cutting costs and asking for discounts. Whole Foods, then Hint's most important channel, also made a request: they wanted Hint to offer a "buy one, get one free" promotion. But that would halve Hint's pricing and halve profits. Goldin strongly opposed it—she believed discounts would dilute brand value and was convinced that if Hint held its prices, it would see more growth once the crisis passed. To persuade Whole Foods, Goldin communicated repeatedly, and her firm belief in the brand eventually won them over; Whole Foods agreed to her plan. Image source: HintMore Than a Channel: An Incubator for New Products Like Poppi and Hint, food and beverage unicorns emerging from Whole Foods shelves are not isolated cases. In 2024, the U.S. plant-based brand Siete was acquired by PepsiCo for $1.2 billion, marking PepsiCo's first foray into food acquisitions in five years. The Austin Business Journal, which covers Austin-area business, has profiled Siete, noting that "Siete's growth is closely tied to its partnership with Whole Foods Market." Whole Foods has indeed been a catalyst for the company's growth. In 2014, Siete was founded, and the next year (2015) it began actively seeking communication with Whole Foods, such as sending multiple emails specifically introducing the advantages of its almond tortillas—from ingredient selection to taste design, all clearly presented in the emails. Eventually, Whole Foods was won over by the content of those emails. In 2023, Siete's grain-free tortilla chips were selected by Whole Foods as one of the "Top 10 Food Industry Innovation Trends to Watch." Siete's CEO Miguel Garza reflected: "We 'knocked' on their door many times, and initially the responses were unclear, often leaving us in uncertain waiting. But we always believed our almond tortillas could meet consumers' demand for health and taste, so we pitched again and again. Finally, we got a positive answer and successfully got our products onto the shelves of Whole Foods' Lamar flagship store." Image source: SieteGarza said Siete also collaborated with Whole Foods on innovative product launches, and in 2024, the two launched the company's condiment line together. In 2023, Siete was one of 16 brands to win Whole Foods' Supplier Star Award. Alyssa Vescio, Whole Foods' senior vice president, said in an email: "Siete has never stopped focusing on their customers, launching new products including salsas, chips, puffs, tortilla chips, and condiments. We are very grateful for their dedication to customers, which has contributed to their success at Whole Foods and across the industry." Image source: SieteNatural nut butter brand Justin's and Icelandic-style yogurt brand Siggi's are also unicorns that emerged from Whole Foods. In 2003, Justin's founder started selling homemade organic nut butter at farmers markets, and entered Whole Foods the following year. The founder personally delivered products to Whole Foods and manned tasting stations to get direct customer feedback, continuously refining the product. By 2008, Justin's products were in Whole Foods stores nationwide, and the next year expanded to other channels like Wegmans and Safeway. In 2016, it was acquired by Hormel Foods for $296 million, completing the leap from channel newcomer to industry unicorn. Image source: Hormel FoodsSiggi's, on the other hand, felt the pressure of scaling after entering Whole Foods and underwent a "transformation." In 2008, Siggi's began selling in 10-15 Whole Foods stores in Brooklyn and Manhattan. Demand surged after launch, even causing supply chain collapse. Founder Siggi Hilmarsson admitted this made him realize the significance of entering Whole Foods: "As soon as we hit Whole Foods, our supply chain collapsed. We couldn't keep up with demand, so we had to shut down the factory for 3-4 months and rebuild it." After weathering the crisis, Siggi's became one of Whole Foods' best-selling yogurt brands and was acquired by French dairy giant Lactalis in 2018. According to incomplete statistics from FBIF, from Poppi to Hint, and from Justin's to Siggi's Dairy, at least five unicorn brands entered Whole Foods during their startup phase. These brands gained public visibility through this channel, and after achieving high valuations, they may be acquired by food giants, embarking on global expansion paths. Image source: FBIF compilationFrom these cases, we can see that Whole Foods is not just an important sales channel but also plays a role similar to an incubation platform. Premium ice cream brand Coolhaus and energy bar brand RXBAR, while not launching at Whole Foods, were among the first national retail channels to accept these brands early on. Me & the Bees Lemonade's founder was an 8-year-old girl; Whole Foods not only invited her to participate in workshops but also ordered $1 million worth of products from the brand, which saw sales grow nearly fivefold over a decade. Impossible Foods' CEO said in 2024 that the company plans to partner with Whole Foods to boost brand awareness. Whether proactively seeking out brands or providing product advice and sales channels, Whole Foods has close ties with these rising food and beverage brands. Image source: RXBAR official website First, act as an 'innovation radar,' willing to give new brands opportunities to innovate and experiment. Whole Foods dares to replace established international brands with new ones—local products hold a significant share in each store. These local suppliers are often within 32 kilometers of the store, and as long as their organic ingredients meet Whole Foods' standards and trial sales are decent, store managers can directly decide to replace international brands with local alternatives. Each Whole Foods store is treated as a team, with 8-10 groups managing departments like seafood, meat, and groceries. Members of each department can independently decide on purchasing, sales, display, and hiring. Under this flexible organizational structure, Poppi and Me & the Bees were proactively invited by Whole Foods, while Siete and Hint established contact with Whole Foods during product development. When an innovative product appears, Whole Foods may be the first channel to discover it. Image source: Whole Foods Market Second, continuously focus on health-related subcategories, mining innovative products in 'niche categories.' As early as 20 years ago, Whole Foods introduced gluten-free coffee and dairy-free desserts, giving many products that initially served specific needs a chance. Poppi founder Allison suffered from stomach issues, so she combined fruit juice with apple cider vinegar to create a tastier drink for health. Hint's founder used to drink 10-12 cans of diet cola daily; for health, she started drinking water and developed a need to "make water taste good." Justin's founder was a vegan, so he needed a natural nut butter he could eat; after making it, he saw a new opportunity. These products not only met the founders' needs but also catered to specific consumers, making them welcome at Whole Foods. These categories, which previously had small markets and no iconic brands, indeed proved their potential after entering Whole Foods. Image source: Poppi Third, become a filter and incubator for excellent innovative products. After proving commercial potential for multiple brands, in 2022 Whole Foods launched the Local and Emerging Accelerator Program to provide more opportunities for brand founders. Selected brands undergo a 12-week training program covering business strategy, marketing, supply chain management, and more, helping brands build a solid foundation during critical growth stages. After the program, brands have the opportunity to sell in select Whole Foods stores and are eligible for a $25,000 equity investment from a donor-advised fund managed by the Austin Community Foundation to support further development. Alyssa Vescio, Whole Foods' senior vice president of market center stores, purchasing, and product development, said their accelerator will: "Encourage emerging brands and provide them with the tools they need to succeed, creating an innovation platform through this program that enriches the customer shopping experience." Sibeiho hot sauce, a brand that went through the accelerator program (Image source: Sibeiho)China's Food and Beverage Brands' 'First Shelf' Domestic new brands also have their own "first shelf." Choose a niche track, rely on short videos and content marketing to get the product seen online first, spark consumer curiosity, then drive purchases and check-ins, and build some awareness. During this period, the product, like Xiaomi's "small steps, fast runs," may undergo multiple iterations and adjustments. Once online reputation, brand, or scale is established, gradually enter offline channels. This model isn't unique to China; many overseas brands follow the same path. For example, RXBAR, the energy bar brand acquired by Kellogg's for $600 million in 2017, started as a small online brand, and U.S. grocery chains Wegmans and Whole Foods were the early offline channels that opened the "door" for RXBAR. Image source: RXBAR official website The integration of online and offline is itself a reconstruction of "people, goods, and places" in this round of new retail. For example, the health-focused light meal brand Yeren Riji initially focused online, and after accumulating sales through live streaming, platforms like Hema, Walmart, and Dingdong Maicai extended invitations. Co-founder Xing Zhengxuan once mentioned: "Our online momentum has been noticed by offline channels, making it easier for us to enter these channels. As an internet-famous brand, we can also drive traffic offline." In the early stages of entrepreneurship, testing and adjusting at minimal cost is naturally an efficient model. But food and beverage products need the actual sensory experience of "color, aroma, taste, and touch," and good innovation requires direct feedback. Image source: Yeren RijiDomestic new brands and products' "test shelves" are also gradually gaining momentum. Channels like Pangdonglai, Sam's Club, and Hema discover promising suppliers through supply chain cooperation, allowing products with qualified production capacity but low brand awareness to stand out through channel partnerships. Some suppliers even validate their value through channel cooperation and choose to transform into brands, actively attacking the market. Channels are high-concentration touchpoints in product distribution, where consumers' changing needs and brands' various new or updated products converge like different tributaries. When channels no longer just sell goods, China's food and beverage industry should see more Poppis emerge.