Hungry for Investment: Big Food Races Toward Startups

Since 2015, global food giants from Tyson Foods to Land O’Lakes have launched venture funds and incubator programs to attract early-stage startups.

Mars, Kraft Heinz, and Thrive Market are some of the newest food companies to launch venture funds.

In March 2018, Mars Petcare launched two pet-focused funds, Leap Venture Studio (an incubator/accelerator) and Companion Ventures (a venture fund); Kraft Heinz launched an incubator and accelerator program for brands named Springboard; and Thrive Market made its first investment in protein bar company Square Organics through its new venture arm Thrive Market Ventures.

Since 2015, we’ve seen a domino effect of leading global food companies establishing venture funds and startup incubator programs.These include Campbell’s Soup with Acre Venture Partners($125M fund), Kellogg’s with Eighteen94 Capital ($100M fund), Chobani with its food incubator (provides $25K grants), and AB InBev with ZX Ventures.

We used CB Insights data to create a timeline of major food corporates launching venture funds and incubator programs.

FOOD CORPORATES ANNOUNCE STARTUP INITIATIVES

As the timeline below shows, alcohol companies Constellation Brands, AB InBev, and Diageo were slightly ahead of the curve in launching funds. Major CPG companies followed, including General Mills, Campbell’s, Kellogg’s, and Danone.

These funds operate across various structures. Some, such as General Mills’ 301 Inc., are managed internally by the corporation; others, such as Campbell’s Acre Venture Partners, are managed by external investors with the corporation (e.g. Campbell’s) as the sole limited partner (LP).

Many of the funds in this analysis have already backed startups.

Tyson Foods, a leader in global meat production, chose plant protein startup Beyond Meat for Tyson New Ventures’ first venture investment, and has since invested in Tovala and Memphis Meats. Beer giant AB InBev’s ZX Ventures backed Starship Technologies, a small self-driving delivery drone that has already partnered with DoorDash, Postmates, and others to deliver food to consumers’ doors.

Some have also strengthened their ties with other investors in the ecosystem. Danone Ventures, for example, poured $15M into NYC-based food VC firm AccelFoods.

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