- Millennial-inspired trends remain a driving force for the products and services offered by food and beverage startups.
- These trends tend to surround "real" food with natural and organic ingredients, convenient design and packaging, ethnic flavors and ingredients, and artisanal or craft products.
- Millennial-focused trends have been critical to food and beverage startups, which now comprise about $5.7 billion in investments.
It's no surprise that millennials remain a targeted market for manufacturers' product development and marketing strategies, as this generation is expected to account for more than 75% of growth for food and beverage over the next decade, according to a 2015 Goldman Sachs report.
Major manufacturers haven't always been nimble enough to remain on pace with all of these trends. As a result, startups have popped up across the country to accommodate increasing demands and create entirely new product segments that challenge the status quo.
Manufacturers have since stepped up their startup investments, often through dedicated internal venture capital units, such as General Mills' 301 Inc. or Kellogg's recently announced 1894. Food-related startup investments soared 152% to total $5.7 billion in 2015, and that was before companies like Campbell, Anheuser-Busch InBev, Hain Celestial, Kellogg, and Danone announced their own VC arms or startup accelerators so far this year.
Also, food and beverage-specific investment firms like CAVU Venture Partners and Edible Ventures and incubators like Food-X and AccelFoods have increasingly played a role in the growth of startups. This has put pressure on manufacturers to find ways to sweeten their offerings to startups in terms of capital and business assistance.
But as important as the millennial mindset has been to startups and small manufacturers, other generations are supporting these and other emerging trends in food and beverage, including baby boomers and Generation Z.