There’s no shortage of news about foodtech startups and the incubators that hatch them. Of late, though, an old player has entered this relatively new space: the CPG.
Huge corporations like Kraft and General Mills are struggling to stay relevant and maintain market share. According to one recent study, U.S. food and beverage sales for the top 25 food manufacturers declined from 66 percent in 2012 to 63 percent in 2015. And we don’t need a report to know that artificially flavored cereals and processed cheese are in direct conflict with recent shifts in the way consumers eat.
It makes sense, then, that these CPGs are associating themselves with startups through foodtech accelerators and incubators. Some simply invest, while others actually run their own programs or partner with programs.
Here’s a rundown of just some of the CPGs tapping into the world of emerging foodtech startups.
Kraft Heinz just announced a new platform called Springboard, which will partner with and nurture up-and-coming brands focused on one of the “four pillars” of food: natural and organic, specialty and craft, health and performance, and experiential options.
Springboard also announced an incubator program for pre-valuation-stage companies in Chicago (date TBA). Selected participants will get $50,000 funding upon acceptance, with the chance to raise up to $50,000 more. They’ll also receive guidance on research, development, and networking. And in case you wondered if this was just another way for Kraft Heinz to snag ideas, participating companies will be encouraged to stay in charge of their organizations, with the CPG playing a more mentor-like role.
Springboard is accepting applications for the incubator through April 5.
Greek yogurt maker Chobani runs one of the more well-known startup incubators. This past week they announced the Spring 2018 class for the program’s third installment. According to a press release, participants were “hand selected by Chobani CEO Hamdi Ulukaya.” The lucky ones include an organic baby food company, a startup making superfood smoothie packs, a handful of organic-snack companies, and a tea maker.
Participants receive $25,000 in grants, opportunities for mentorship, and access to Chobani’s network. The class will run from April through July at Chobani’s sales and marketing offices in NYC.
You wouldn’t automatically pair edible insects and tortillas made from beets with the maker of one of the most sugary drinks on the planet. But that’s what you’d find at Pepsi’s Nutrition Greenhouse incubator. The drink company has been very clear that its incubator is focused on emerging health and wellness brands.
The first installment, which focused on companies catering to European consumers, has already wrapped. Eight companies took part in the program, with all of them receiving €25,000 as well as assistance with growing their business throughout the six-month program. Plant-based food company Erbology won the grand prize, a €100,000 grant.
There’s no word yet on the next set of dates, or if that focus will expand to include other parts of the world.
General Mills doesn’t have an emerging brand incubator; it has an “emerging brand elevator.” 301 INC works with up-and-coming foodtech brands who already have a compelling product and are looking to turn it into a viable business and gain access to capital. Right now, Rhythm Superfoods, Beyond Meat, and plant-based food company Kite Hill are all partners.
301 INC is slightly different from other incubators in that there’s no stop and start date for participating companies. Instead, members work with the 301 team on an ongoing basis (although they do hold events from time to time). Interested companies should contact 301 through the program’s website.
Similar to 301 INC, Venturing and Emerging Brands (VEB) is a unit within Coca-Cola that fosters emerging brands on an ongoing basis. In this case, Coca-Cola is focused on beverage-specific brands who fall within one of the company’s four phases: experimentation, proof of concept, pain of growth, and scale to win. How much the CPG invests in each startup is determined by where that emerging company is in the four phases.
Coca-Cola notes that a successful brand “eventually graduates from VEB to join one of The Coca-Cola Company’s key business units.” Which is a fancy way of saying participants can eventually expect to become a cog in their machine. Whether that’s good or bad for innovation is up for debate.
That question might be true for all these programs. As CPG-driven accelerators and incubators are still a fairly new concept, it remains to be seen how these startups will change and grow once they have corporate capital and involvement. Call me overly optimistic, but I think this trend will end up doing more good than harm, giving emerging companies the ability to bring healthier lifestyle choices to the average consumer.