- Joywell Foods, a food technology company creating a sweet protein platform, closed a $6.9 million funding round led by Kraft Heinz's investment arm Evolv Ventures, with participation from Khosla Ventures and SOSV, according to a release. This funding round brings Joywell Foods' total funding to $13.2 million.
- The company plans to funnel this investment toward expanding its technology platform, building its portfolio of sweet proteins and increasing its R&D.
- Within the past year, Joywell Foods has filed for three patents. It has also commercialized a first-to-market protein sweetened popsicle concept with its berry-based miraculin sweet protein, which is 5,500 times sweeter than sugar. In the release, the company said it plans to test several consumer offerings through retail and DTC channels. There was no stated timeline for the release of these products.
Consumers are increasingly moving away from processed foods in favor of healthy, better-for-you items. Sugar has become a particularly divisive ingredient, and current sweeteners on the market have yet to hit the sweet spot as a replacement. An Innova Market Insights survey found three in five U.S. consumers would prefer to reduce their sugar intake rather than replace it by consuming artificial sweeteners. However, natural sugar replacements have struggled to dominate the market for a variety of reasons, including taste and compatibilty with other ingredients.
Sweet proteins are aiming to fill that void. Joywell Foods said many people perceive sweet proteins as tasting more similar to sugar than existing artificial and alternative substitutes. Joywell's proteins are derived from exotic fruits and are sweet without having the negative health impacts associated with sugar. The plant-based sweetener is extracted using fermentation technology.
Last year, the company published a peer-reviewed study on its miraculin protein demonstrating its lack of adverse health effects. Joywell Foods said that sweet proteins "are not associated with sugar’s long-term negative health implications."
The claims that sweet protein might be the future of alternative sweeteners unsurprisingly attracted the attention of Kraft Heinz. As a category, sugar alternatives are estimated to be worth between $16 billion and $20 billion. Gaining access to this market through its investment in Joywell Foods could have a sweet payoff for this CPG stalwart that had been struggling to keep pace amid changing consumer preferences.
To modernize its portfolio and refresh its image, Kraft Heinz committed $100 million to its Evolv Ventures fund in 2018. It chose to focus on shaking up the food industry — and its own company — through investments focused on finding solutions through developments including supply chain technologies and digital retail strategies. Already, it has backed San Francisco-based GrubMarket for an undisclosed sum that is reported to be $25 million. It also co-led a $23 million funding round for cannabis retail software company Flowhub.
If Joywell Foods develops more sweetener alternatives or is able to find success with its Pop Lolly reduced sugar popsicle concept, Kraft Heinz may consider integrating this sweetener into some of its own products to appeal to consumers seeking healthier alternatives. Heinz Ketchup, CapriSun, Jell-O, Kool-Aid and Kraft Barbecue Sauce could all benefit from a reduced sugar profile.