- Later this month, Nestle is expected to launch its new open innovation platform, [email protected] The platform will enable third-party businesses of all sizes, particularly startups, to "bid" for the opportunity to devise solutions for future product and communication issues for Nestle brands.
- Through the platform, Nestle will offer pitches for innovation needs and provide successful companies with funding to pilot ideas. Tech companies can also propose their own ideas.
- Nestle will then work with the company as "equal co-creators," potentially adapting the ideas to its business and portfolio, Pete Blackshaw, Nestle's global head of digital and social media, told The Drum magazine.
Nestle won't be the only company looking to partner with and capitalize on the third-party innovations. Accenture predicts that the amount of revenue large companies generate through third-party collaborations could increase from 9% to 20% within the next five years.
The growth of third-party collaborations parallels the increasing number of major manufacturers launching their own venture capital arms to invest in startups and up-and-coming brands. In the past two months, Hain Celestial (Cultivate Ventures), Kellogg (1894), and Danone (Danone Manifesto Ventures) have all announced the launch of their new VC units, and Danone's unit has already made its first investment.
But the types of third-party collaborations Nestle is pursuing aren't necessarily for new products but instead technological enhancements for brands it already has. Hershey made a similar move on a smaller scale earlier this year when it crowdsourced ideas for how to improve the quality of summer shipments so its chocolate wouldn't melt in warmer climates. Other manufacturers could use their venture arms to explore similar tech-savvy innovations for their existing brands rather than just to groom new brands to later add to their portfolios.
These collaborations could give Nestle an edge as it fortifies itself as a nutrition, health, and wellness company, particularly under its recently named incoming CEO, healthcare exec Ulf Mark Schneider. Schneider will take the reins from current CEO Paul Bulcke effective Jan. 1 and Bulcke will assume the role of chairman next year.