Nestlé nibbles on healthy snacking and plant-based food startups
- Nestlé USA is working with three new startups as part of the Terra Food and Agriculture Accelerator founded by RocketSpace and Rabobank. Nestlé first announced in 2017 that it would work with Terra and other corporate collaborators to select and coach startups in the food and agricultural industry.
- The Swiss-based company is working with Jackson's Honest, a maker of more than 20 Non-GMO Project Verified snacks; Miyoko's, which crafts cheese and butter from plants; and Here, a company that turns fresh produce grown by independent farmers into products such as cold pressed juices, spreads, dips and salad dressings.
- "We look forward to working with these companies to share learnings, develop new capabilities and create something better together as we bring people more options in categories that are in high demand — healthy snacking and plant-based foods," Ashlee Adams, head of Open Innovation at Nestlé, said in a statement.
Nestlé first entered the Terra accelerator program to support emerging food and agricultural startups more than a year ago, and its latest partnerships closely adhere to that strategy. Jackson's Honest, Miyoko's and Here each touch on at least one of the hot-button trends important to many consumers, including the absence of GMOs, making foods that come from plants and creating items that help local farmers — all factors that can spur mission-based shoppers to pick these products instead of another brand.
"These companies represent the future of food," Adams said in the statement.
For a big food company like Nestlé, it is able to learn from the businesses it works with while keeping pace with emerging trends. It also provides the option later on to potentially acquire these emerging brand outright. A partnership has an advantage by enabling Nestlé to minimize the upfront risk if things don't work out.
Similar to other food and beverage companies looking for growth, Nestlé is reinvigorating its core brands, implementing an internal incubation platform to get products to market faster and entering into strategic partnerships like Terra in a bid to tap into young, upstart brands that are hitting a chord with today's consumers.
Terra sifted through hundreds of applications and selected 17 start-ups for the program, according to Food Business News. Companies must already have a product, service or technology on the market.
Time will tell whether these partnerships will be enough to meaningfully move the revenue needle and foster much-needed growth. At the very least, it's a sign that food companies like Nestlé realize that despite its extensive experience, it could still pick up new ideas that could translate into meaningful differences when incorporated into its existing business model.
Already, the Terra partnership has paid off for Nestlé. It was matched previously with Know Brainer, a manufacturer of coffee creamers and instant beverages with functional ingredients and healthy fats. Food Business News noted the pair worked with a flavor and fragrance manufacturer to introduce a product that had a collagen protein in March.
Nestlé, which has felt pressure from activist investor Daniel Loeb for not moving fast enough to overhaul its business, has made significant changes in recent years to improve its operations. Its most notable transactions include the sale of its U.S. candy operations, paying $7.15 billion to Starbucks to sell the chain's coffee beans and drinks in grocery stores and last year, snapping up Sweet Earth, a plant-based foods manufacturer.
While the world's largest food company is making changes from within, it can't do everything to advance in today's markets alone. It's wise to seek insight from start-ups like Jackson's Honest, Miyoko's and Here to help enlighten a business that traces its roots back to 1867.
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