June 30, 2016

Danone’s newly launched venture capital fund, Danone Manifesto Ventures, is set to make its first investment. The firm announced it is engaged in exclusive negotiations to acquire a significant minority stake in France’s Michel et Augustin, a producer of premium biscuits, dairy products, fresh desserts, and beverages.

Founded in 2004 by Michel de Rovira and Augustin Paluel-Marmont, and marketed as what the Financial Times has labeled a “good mood” brand similarly to Ben & Jerry’s ice cream, Michel et Augustin has grown to have a significant position in the French market. Sales for the company last year totaled €40 million, a marked increase year on year according to Danone, and more than double sales of €18.4 million seen in 2012. Building on this success, Danone states that it can support Michel et Augustin toward international expansion, particularly in the U.S.

Danone was once the global leader in the biscuit sector according to ConfectioneryNews, controlling 71% of the global market and earning the company $2 billion in sales in 2006. However, Danone divested its biscuit business to Kraft in 2007 (now Mondelez).

“The idea is not to renew our business in biscuits,” Marion Cocherel, senior manager of media relations for Danone told ConfectioneryNews. “We’re buying the spirit of the company. They are very good marketers and we buy into that potential.”

Indeed, this strategy seems to be widely playing out across the industry as the largest food companies launch venture capital funds and accelerators to invest in smaller, more nimble food brands that have the ability to rapidly connect with shifting consumer demands and have a reputation for more natural, transparent, and niche category products.

One of the most prominent such funds is 301 Inc. launched by General Mills in October 2015. Others include the $125 million Acre Venture Partners launched by Campbell’s Soup, Eighteen94 (1894) Capital launched by Kellogg’s, Startup Next Food & Tech, which was launched by Land O’Lakes in partnership with Techstars, and Techstar Connection, launched by AB InBev’s venture arm, ZX Ventures, also in partnership with Techstars.

Through Danone Manifesto Ventures, Danone plans to provide operational and financial support to its smaller portfolio businesses along with access to the group’s network of experienced global teams to help in the pursuit of independent growth.

Headquartered in New York, Danone Manifesto Ventures is scheduled to be fully operational in the autumn of 2016.

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Lynda Kiernan