- SnackFutures, Mondelez International's innovation and venture hub, launched CoLab, a new startup engagement program for early-stage well-being snack brands, the CPG giant said in a statement.
- The 12-week CoLab program is customized to each participant’s business challenges and growth priorities. Up to 10 startups will be chosen to participate and receive a $20,000 grant. Mondelez will provide the businesses with tools, technologies and access to networks and industry expertise, while the large CPG gains insights, capabilities and prospective investment opportunities.
- Mondelez, the snacking giant known for iconic brands such as Oreo, Ritz and Triscuit, has been aggressively bulking up its portfolio through acquisitions and by launching or making minority investments in startup brands.
Since SnackFutures was launched by Mondelez in 2018, the division has created and launched five brands in the U.S. and Europe: CaPao, Dirt Kitchen Snacks, Millie Gram, NoCOé, and Ruckus and Co. It also has made minority investments in Uplift Food, Torr and Hu.
Mondelez is taking its snacking prowess a step further with CoLab by focusing on established companies that fit into its growth strategy. Businesses must generate at least $500,000 in revenue, have high growth potential and align with Mondelez's innovation priorities, the snack company said.
“SnackFutures is in a unique position of both creating our own brands and investing in startups, so we can offer participants empathy and understanding from our own experiences along with the rigor, discipline and insights of a global snacking leader,” Brigette Wolf, global head of SnackFutures at Mondelez, said in a statement. “It’s even more important for programs like CoLab now as these small brands try to recover and grow out of the challenges presented by the COVID-19 pandemic.”
While large CPGs are good at innovating and evolving their existing portfolio of brands, startups are often more knowledgeable about food trends and are able to pivot faster, incorporating changing consumers preferences into their offerings.
It's a big reason why nearly every large food company, including Danone, PepsiCo, Nestlé and General Mills, have developed a venture capital arm or worked with an organization that helps young and trendy startups grow. Such partnerships provide large CPG companies with a chance to learn from some of the most promising up-and-coming brands in food and beverage — businesses that may very well be stealing their market share.
In some cases, it can lead to an acquisition. Last month, Mondelez purchased Hu Master Holdings, a maker of premium snacks and chocolates made from simple ingredients. Mondelez took a minority stake in the paleo-friendly, clean-label snack brand and New York City restaurant Hu nearly two years ago through SnackFutures. As part of the deal, Mondelez was granted a right of first offer to acquire the company. Such investments give big players like Mondelez an intimate look into the young upstart, and an opportunity to later buy the small business if it succeeds. If both parties are familiar with each other, it can be a largely seamless transaction.
PepsiCo purchased Health Warrior, a brand of plant-based, protein-dense bars, mixes and snacks, for an undisclosed amount in 2018. Health Warrior became the first brand included in its innovation program, The Hive, which focuses on smaller, emerging brands.
For smaller firms, a big company can provide them with resources, mentoring, funding and connections that they may not have had access to on their own, or taken longer or more money to establish. Among the highest-profile programs is The Hatchery, a Chicago-based incubator that has worked with companies including Kellogg, Conagra Brands , PepsiCo, Ingredion and Mondelez to facilitate networking and connecting entrepreneurs to helpful contacts and resources.
Mondelez has little to lose in starting CoLab. At worst, it sacrifices time and some money working with these young companies. But the potential to gain knowledge or a business to invest in or purchase outright is worth the risk.