Dive Brief:
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PepsiCo North America Nutrition, the company's division that includes nutrition-based brands such as Naked, KeVita, Quaker, Tropicana and Near East, is partnering with The Hatchery Chicago, a nonprofit food and beverage incubator.
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The company said the arrangement is meant to nurture food industry entrepreneurs to help them sustainably grow and scale their businesses. The goal of the collaboration is to bring delicious products to more people and places, PepsiCo said.
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"I'm really excited about what we're doing to make sure trusted nutrition choices are always within reach," Seth Kaufman, president of PepsiCo North America Nutrition, said in a release. "One of the ways we do this is by collaborating with like-minded, nutrition-forward partners who provide great insight into the future of food and who can also benefit from our expertise and resources."
Dive Insight:
PepsiCo is the latest large food company to join forces with The Hatchery, which is building a 67,000-square-foot facility west of downtown Chicago expected to open in December. Kellogg Co. and Conagra Brands also are part of the project designed to encourage the development of new food products, especially snacks.
The 75 to 100 startups planned for the state-of-the-art incubator will have access to 56 private kitchens, a large shared one, bulk storage and other assets to help them develop innovative products. They can access PepsiCo's industry insights, market data and product development skills, Jody Menaker, PepsiCo North America Nutrition's director of communications, told Food Navigator.
PepsiCo could benefit from the partnership as new snack items are developed and might be in a position to acquire a promising startup — or make an investment in one — before a competitor does. And, as food and beverage entrepreneurs brainstorm ideas and work toward getting them off the ground, they may inspire the larger firm's research and development staff to come up with their own products.
Even for a successful CPG company like PepsiCo, cross-pollination of innovative concepts could occur more often with the incubator partnership than without it. 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 of PepsiCo's areas of focus, including snacking and better-for-you foods, making the New York-based company a seemingly ideal partner for the new venture.
Large food companies have a lot to gain by collaborating with innovative snack startups, and their investments in this area have increased as CPG firms look to bolster revenue. PepsiCo has been making healthier versions of its popular chip brands and recently expanded its Naked line into snacks with fruit, nut and veggie bars. Such moves may help offset declines in its core soft drink brands that continue to struggle.
Six startups working with The Hatchery Chicago will appear at the Summer Fancy Food Show in New York City later this month, Food Navigator reported. They include a muesli and granola maker, a manufacturer of gluten-free paleo cookies and a maker of a line of tea-infused energy snacks. This array of innovative products could prove to be an intriguing lineup for PepsiCo, Kellogg, Conagra and other food companies linked to The Hatchery.