Danone expands organic presence with investment in baby food startup
- Danone Manifesto Ventures, a corporate venture capital unit of Danone, is now a shareholder of Yooji, a French baby food startup, the company said in a statement. The amount of the investment was not disclosed.
- Yooji offers frozen portion-sized organic products, made without salt or additives. Yooji’s baby food will continue to operate independently, but with Danone’s financial and operational support, and access to their teams worldwide.
- This is the fourth investment Danone Manifesto Ventures has made since it’s launch in 2016. Its purpose is to support and develop new companies with high growth potential that also encourage healthier eating and drinking practices.
Organic baby food is in demand, and shows no signs of waning anytime soon. In the U.S., spending on organic baby food is projected to hit $783.9 million in 2017 — up from $613 million in 2013. Danone Manifesto Ventures has taken notice, which is reflected in its recent investment in Yooji, a French organic baby food startup. Danone is no stranger to bulking-up its presence in the organic space. Earlier this year, it purchased U.S. food maker WhiteWave for $12.5 billion, expanding its offerings in the natural and organic sector.
Danone is entering a crowded field of organic baby food manufacturers. Players include Gerber, Ella's Kitchen, Sprout, Happy Baby, Earth's Best and Campbell's Plum Organics, all jockeying for limited shelf space.
Less than a month ago, John Foraker, founder of Annie’s Homegrown, announced he would be stepping in as the CEO of a California-based organic baby foods startup Once Upon a Farm. Actress Jennifer Garner also will lend some star power to the brand, serving as a chief brand ambassador. Both Foraker and Garner are coming in as co-founders and investors. The fact that an organic baby food company warranted involvement from a well-regarded food industry expert and an A-list celebrity is another endorsement of the strength of this trend and the need to gain an advantage to stand out.
For Yooji, having Danone's financial backing and market expertise will be invaluable as it seeks to carve its own niche in the marketplace.
Parents also have proven they are willing to spend more so their kids can eat organic. In fact, they’re more likely to buy organic products for their kids than for themselves, according to a nutrition survey from BabyCenter Brand Labs Insight. In addition, the study found that 43% of respondents would pay more for organic baby food.
Millennial parents, which will comprise 80% of the demographic during the next 15 years, are forecast to keep the organic product market growing. These moms and dads are far more interested in organic food than previous generations, both for themselves and their children. Part of this could be greater availability of organic foods today, and an increased focus on ‘clean eating.’ Millennial parents also are more focused on creating meals for their families that are convenient, but healthy.