- Mondelez International announced last week it is partnering with The Hatchery Chicago, a nonprofit food business incubator, to enhance innovation initiatives in the snacking space. The maker of Oreo, Triscuit, Wheat Thins and Ritz said the investment is part of its SnackFutures innovation and venture hub launched this past fall.
- Mondelez and the SnackFutures team plan to connect with the local food and beverage startup community and work together to accelerate and scale innovation. They will coordinate with The Hatchery Chicago on educational opportunities and mentor entrepreneurs active in Chicago's food and drink scene, the company said.
- Tim Cofer, Mondelez's executive vice president and chief growth officer, said in a release that SnackFutures is looking to test new ideas that will disrupt the industry. "Working with The Hatchery, food entrepreneurs will help us push the boundaries of what is possible in snacking as we continue to build our ecosystem of partners while also giving back and offering guidance to new companies," Cofer said.
Similar to many other large CPG companies, Mondelez is looking to collaborate with promising startups developing innovative snacking products. These big businesses are able to contribute deep experience in R&D, financing, manufacturing and marketing, along with extensive distribution networks. The small startups can provide ideas, energy and creativity. Should these innovations pan out, the larger company might acquire or invest in one or more startups and gain a competitive edge in the booming snack marketplace.
The Hatchery — a 67,000-square-foot facility west of downtown Chicago — has attracted major industry names since it opened late last year. PepsiCo, Griffith Foods, Ingredion, Kellogg and Conagra Brands have all partnered with the state-of-the-art incubator in various ways. Startups participating in The Hatchery have access to 56 private kitchens, a large shared one, bulk storage and other assets to help them develop innovative products. Mondelez said it is one of the largest food incubation spaces in the country.
Other big food firms — ranging from Nestlé and Chobani to Kraft Heinz, Tyson Foods and Campbell Soup — have partnered with incubators or started their own to jumpstart innovations. The Hatchery's mission resonates with many areas of focus today, including snacking and better-for-you foods, so Mondelez seems like it would be a promising fit.
When Mondelez launched its SnackFutures initiative in November, it said the focus of the program would be on creating brands and businesses involving well-being and premium snacks, reinventing some of the company’s smaller brands and funding startup entrepreneurs. Before making this partnership public, the program announced its first investment earlier this month in prebiotic Uplift Food.
Mondelez may be arriving at this party somewhat later than other CPG manufacturers, but since The Hatchery only opened a few months ago, there should be sufficient time to establish the desired collaborations for educational outreach and mentoring. When it comes to innovation and potential new snack products, chances are it's better to be a little late than never. Also, Mondelez, which is headquartered about an hour outside Chicago, has geographic proximity to The Hatchery — another asset of this fledgling partnership.
Similar to its competitors, Mondelez is looking to enhance revenues with new growth strategies, collaborations, innovation and investment. Chairman and CEO Dirk Van de Put recently noted the company has established itself with well-known snack brands in the U.S. and elsewhere, and therefore has sufficient positioning and appeal to achieve its goals. Growth in its portfolio of biscuits, chocolates, candy and gum increased 2.8% last year, up from 2.1% in 2017. The company sees investment opportunities in enhancing local brands here and abroad and increasing innovations in its well-known global brands, such as Oreo, to boost sales.
This multi-pronged approach — including participation in The Hatchery Chicago and other product development initiatives through its SmartFutures strategy — seems like it could be a smart way for Mondelez to proceed to increase the company's market share and drive revenue growth in the years ahead.