Natural Cuts: Building a business by redefining fresh
When Michael Annunziata ’11, MBA ’17, first heard Vipul Saran, MPS ’17, speak about a new process that could naturally extend the shelf life of a fresh-cut potato for as much as two months without refrigeration — something that had never been achieved before — he knew the idea had great potential.
“Having been an undergrad at Cornell I had enough of an appreciation for the food science program to understand that while it sounded a little different at first, this could be a huge idea,” said Annunziata, Chief Executive Officer and co-founder of the startup company, Natural Cuts.
Saran and his faculty adviser, Syed Rizvi, professor of food process engineering, had developed the process, and Saran was searching for a way to commercialize the new technology for food preservation. Annunziata, an MBA student with a background in private equity and venture capital, immediately knew he and Saran would make a great, complimentary team.
As the team began discussing ways to turn the idea into a commercial reality, they decided to apply for eLab, a business accelerator program at Cornell University dedicated to helping students turn their concepts into real businesses. Natural Cuts is one of 12 student startups enrolled in eLab during the current academic year.
Before enrolling in eLab, students must prove they have a solid business concept that goes beyond just an idea. To establish this foundation, teams must complete a business model canvas and make a formal pitch to the committee, which emphasizes conducting customer interviews to gauge interest in a product.
“The main way that we did our customer development is just walking up to friendly faces in the supermarket — going up to people who were looking at raw potatoes or at fresh-cut vegetables, going up to people in the frozen food aisle — and asking them open-ended questions,” said Annunziata. “What are you buying? Why are you buying it? Who are you buying it for? What are you going to do with it? How will you cook it? Why do you cook it that way? What we never did was say, ‘We’re making this; would you buy it?’”
After spending several months working on customer development, the team found its niche product: an all-natural, non-GMO fresh-cut vegetable that is shelf stable for at least 60 days without refrigeration.
“Our hypothesis is that with our new technology — which doesn’t use preservatives, additives, or GMOs and doesn’t harm the integrity of the nutritional value of the product — we can insert ourselves into that convenient pre-cut vegetable market and potentially be the biggest player there. We plan to start with the potato and eventually grow and scale our business by expanding to other vegetables,” said Annunziata.
While the science behind the technology may have been developed at Cornell, it was Saran’s experience in the agricultural sector as a scientist and owner of a potato farming co-op in India that drove his research. His work and entrepreneurial spirit not only helps alleviate problems faced by farmers in India, it also reduces food waste typically associated with spoilage at the consumer level.
“The data suggests that more than 52 percent of fresh produce is wasted, out of which 28 percent of the food waste is created at the consumer level,” said Saran, Chief Product Officer for Natural Cuts. “Imagine if we could save that 28 percent by just extending the shelf life of the fresh produce.”
Helping farmers and consumers combat food insecurity and create more sustainable practices could have positive effects across supply chains and around the globe. In addition, the new food processing method will reduce environmental impacts by eliminating the need to refrigerate or freeze produce during transport or storage, greatly reducing the $7 billion cost of energy in the US food processing industry.
The technology also has significant global welfare implications. “Our ability to take in, process and make shelf-stable fruits and vegetables here in the U.S. and ship them to developing nations could revolutionize the farming industries there and help solve part of the problems around world hunger,” said Annunziata.
Natural Cuts has been gaining momentum. They recently hosted a first launch of their pre-cut potato product at a local restaurant, Luna Inspired Street Food, which received an 8.4/10 overall rating from consumers. In March, they won the $25,000 first prize at Hotel Ezra Cornell’s seventh annual Hospitality Business Plan Competition, and they are finalists for the Cornell Venture Challenge, the New York State Business Plan Competition, and Cornell Student Startup of the Year, all slated for the end of April.
Later this month, Natural Cuts will participate in a Demo Day event during the annual Entrepreneurship at Cornell Celebration conference. Demo Day gives each eLab startup the opportunity to make presentations about their businesses and the progress they have made to an audience that includes angel investors, venture capital investors and many Cornell alumni passionate about entrepreneurship.
Natural Cuts already has an eye toward the future. They have attracted early interest from investors, and are already looking to expand its food processing method to other fruits and vegetables.
“We think there is a big enough opportunity set in potatoes alone to be a successful venture-backed business,” said Annunziata. “But the home run opportunity is to make shelf-stable fruits and vegetables that no one else can. We believe we can create a new category of pre-cut vegetable between fresh and frozen. And at the end of the day you may not know exactly who is going to buy it, but there is a consumer out there who is going to buy a pre-cut avocado.”