Kraft Heinz launches second incubator class of disruptive brands
- Kraft Heinz announced its next incubator class of five disruptive startups: Blake’s Seed Based, BRAMI, Ka-Pop! Ancient ingrained Snacks, Origin Almond and Tiny Giants.
- These startups will be given an initial $50,000 in funding when they enter the 16-week program, and they will have the opportunity to earn another $50,000 during the course of their tenure. Kraft Heinz will not take an equity stake in the companies.
- Springboard said companies interested in participating in its third incubator class can apply until June 14th. The fall program will take place August 5th through November 22nd.
With more than a century of experience in the food space, Kraft Heinz knows a thing or two about how to develop a product and get it to market. But like other the CPG giants, Kraft Heinz has run into problems recently as consumers turn away from processed foods in favor of better-for-you options. This was thrust into the spotlight recently after Kraft Heinz issued weak guidance and wrote-down the value of its Kraft and Oscar Mayer brands by $15.4 billion.
In the four years since Kraft and Heinz merged, the combined company has cut thousands of jobs, closed plants and wrung out other inefficiencies, giving it the highest profit margins in the U.S. food industry. But it came with a cost. While 3G Capital Partners, which is a majority owner of Kraft Heinz, excelled at the financials, it had less expertise building brands and growing sales, especially in the face of the rapid shift by consumers toward healthier, fresher and natural brands that clashed with many of the offerings in its portfolio.
To help it better align with modern trends, Kraft Heinz has turned to initiatives such as Springboard. While many CPG giants have begun their own startups with acquisitions in mind, Sergio Eleuterio, who is head of Kraft Heinz’s Springboard incubator, told Food Dive last year that acquisitions are not part of the game plan. Instead, the company is using the incubator as a learning tool to bring startup-style culture and innovation to legacy Kraft Heinz brands.
In order to have the greatest impact, Kraft Heinz is looking for companies that align strategically with the market and are natural and organic, specialty or craft, health or performance and/or experiential brands. Its inaugural class met these criteria, but only one saw significant commercial success. After completing the four month program, avocado sauce Kumana landed an agreement to expand into 1,700 Safeway stores.
The latest class taps into many of the latest trends such as allergy-free snack options with Blake’s Seed Based; nutritionally packed BRAMI beans; Ka-Pop! Ancient inGRAINed Snack with protein, fiber, omega-3s, potassium and vitamins; cold-pressed almond juice with Origin Almond; and Tiny Giants plant-based yogurt.
Even if the incubator doesn't produce a market winner, there is a chance that just by being associated with an initiative to bring more good-for-you products to market will reflect well on a company that is typically portrayed as the epitome of processed food with cold cuts and processed cheese — even if it is only to persuade another class of startups to apply to its program.
For the nascent upstarts, this program will allow the companies to grow independently while taking advantage of Kraft Heinz’s supply chain and market resources — a great advantage since some of the founders have backgrounds as entrepreneurs and are not starting from scratch on learning how to run a company.