- Kraft Heinz and NotCo have entered a joint venture to develop and produce plant-based co-branded products at scale, the companies announced Tuesday. The joint venture will be under the control of Kraft Heinz, go by the name of The Kraft Heinz Not Company LLC, and be led by Lucho Lopez-May, NotCo North America's current CEO.
- This partnership will combine NotCo's patented artificial intelligence platform — which has been used to reimagine milk, meat, mayonnaise and ice cream with plant-based ingredients — with Kraft Heinz's product portfolio and scale. The companies did not give details about potential products coming out of the joint venture, but the release said it was designed to "reimagine global food production and advance toward a more sustainable future."
- NotCo is the leading international player in AI-enabled plant-based food products, defining itself as the fastest-growing food tech company in Latin America. Last summer, the Chilean company raised a $235 million Series D round, which brought it to a $1.5 billion valuation.
The timing of this announcement is uncanny. At the same time the release was sent out, Kraft Heinz North America Zone President Carlos Abrams-Rivera was outlining the company's new use of AI to improve operations to analysts attending the virtual Consumer Analysts Group of New York conference. At CAGNY, Abrams-Rivera gave examples of how the company is now using AI to better distribute products to retailers and use targeted marketing, but added that yes, AI is also coming to Kraft Heinz's food products.
Unlike using AI to optimize operational parts of the business, Kraft Heinz's partnership with NotCo shows a vastly different way for a food company to use the technology. If the joint venture is successful, it also could signify a new frontier in product development for legacy CPGs wanting to expand their reach into the plant-based realm.
“The joint venture with TheNotCompany is a critical step in the transformation of our product portfolio and a tremendous addition to our brand design-to-value capabilities,” Kraft Heinz CEO Miguel Patricio said in a written statement. “It helps deliver on our vision to offer more clean, green, and delicious products for consumers. We believe the technology that NotCo brings is revolutionizing the creation of delicious plant-based foods with simpler ingredients.”
While Kraft Heinz is a leader in many food categories, its product portfolio has lagged behind in plant-based. The only brand it owns in the segment is legacy veggie burger brand Boca. Unlike other Big Food players, Kraft Heinz has not introduced its own plant-based brands or made acquisitions of smaller or up-and-coming players.
Behind the scenes, Kraft Heinz has been showing interest in the space. The company's venture capital fund, Evolv Ventures, has invested twice in New Culture, a startup using precision fermentation to make dairy proteins for animal-free dairy cheese. Evolv Ventures has also participated in the Series A funding round for Kingdom Supercultures, which creates optimized microbial cultures to ferment food, and led the Series A funding round for sweet proteins maker Joywell Foods.
This joint venture puts NotCo's tech front and center, giving a massive endorsement to both the efficacy of AI to recreate traditionally animal-derived foods and NotCo itself.
"When we started NotCo, it was our goal to make our technology a catalyzer for a more sustainable food system not only for us, but for other brands and manufacturers who share the same ambition,” NotCo Co-Founder and CEO Matías Muchnick said in a written statement. “Today is an exciting milestone for the plant-based industry and shows the power of technology’s role in driving mainstream adoption."
The joint venture also has the potential to put Kraft Heinz ahead of other legacy CPG companies getting into the plant-based space. NotCo's Guiseppe algorithm could help recreate Kraft Macaroni & Cheese and Jell-O pudding without dairy ingredients, but it could also pull Kraft Heinz into new categories altogether. General Mills, Tyson, Hormel and Kellogg have all created new brands for alternative protein-based products. Like Kraft Heinz, they also have significant manufacturing, supply chain, marketing and distribution infrastructure that can help a new alternative protein product take off. But they've all had to create brand recognition for their newer offerings.
NotCo could help Kraft Heinz add plant-based SKUs for its already-successful existing products, which would have both the manufacturing and distribution potential of Big Food and years of brand recognition. A recreated legacy product could also move the sector closer to ubiquity, making plant-based versions of beloved products more common.