July 6, 2017

Grupo Bimbo, the Mexico-based bakery goods giant, announced the formation of Bimbo Ventures – an in-house investment arm designed to source and drive highly potential ventures in the food and food tech space.

Bimbo Ventures has also partnered with BlueBox Ventures, the largest network of incubators, accelerators, and corporate investment funds in Latin America, to create the ELEVA Food Technology Accelerator by Bimbo – an accelerator program designed to provide innovative entrepreneurs what is needed to develop and commercialize their product.

“Through Bimbo Ventures and ELEVA, we are offering startups with innovative and high potential initiatives the possibility to develop their projects hand in hand with Grupo Bimbo, through a comprehensive model that encompasses three fundamental aspects: mentoring, funding and trade alliances,” said vice president of Bimbo Ventures, José Manuel Ramírez.

Ten startups focused on categories ranging from innovative ingredients, supply chain technologies, automation and operations, logistics and distribution, renewable energy, payment and transaction methods, and retail will be selected to participate in a 16-week program in connection with Grupo Bimbo.

Industry Wide Strategy

The move to launch venture capital arms and accelerator programs or incubators has become a widely used method by some of the world’s largest and most conventional companies to achieve diversification, and gain a foothold and establishing relevance in a swiftly changing consumer market. CPG companies also use these programs as a means to stay a step ahead of their competition and independent venture capital firms that are realizing the growth potential in disruptive food innovation.

Venture firms’ food and beverage investments rose to $603 million across 48 deals in 2015, according to the Dow Jones VentureSource, a 60 percent increase from 2014, and a record annual amount for investment in the sector. In an effort to modernize and follow consumer trends, CPG companies that may be perceived as less transparent can use investments to gain exposure and traction with market trends like organic, natural, and “free-from” foods.

Most recently, in the last week of June, Nestlé USA announced it had partnered with global financial services provider and leading agriculture, food, and beverage investment bank, Rabobank, and San Francisco-based technology campus RocketSpace to foster food and agtech startups through the Terra Food + AgTech Accelerator.

“Rather than limit innovation to within their four walls, forward-thinking brands are building an ecosystem of collaborators – big and small,” said Duncan Logan, founder and CEO of RocketSpace, upon Terra’s launch. “It’ll be fascinating to see this diverse group come together and build real-life solutions to address tomorrow’s food and agriculture needs.”

Other global CPG companies that have launched venture investment units or accelerator programs include Campbell Soup, which early last year announced the launch of Acre Venture Partners – its independent $125 million VC fund designed to finance innovative and disruptive startups in the food sector.

Both Land O’Lakes and AB InBev have separately partnered with Techstars to launch accelerators in the space, while last June, Kellogg’s announced its entrance into the venture capital space with its fund, eighteen94.

“…the rate of innovation across our industry has picked up dramatically,” said eighteen94’s managing director Simon Burton upon the fund’s launch. “Things are changing quickly, and investing is a great way to get a sense of what’s going to be important in the future.”  

Possibly the most active of these funds is General Mills’ 301 INC. Formally launched in October 2015, 301 INC was a testament by General Mills, the maker of iconic Cheerios and Lucky Charms, among many other popular brands, that there was a shift occurring within the food sector that was creating a scenario in which Big Food needed the rapid-response innovation generated by startups as much as startups need the capital available from Big Food.

Today, the portfolio consists of eight startups – each with its own mission to lift the nutritional standard of packaged foods- including:

Kite Hill – a California-based producer of artisanal, dairy alternative products.

good culture – a producer of organic, grass-fed, high protein, low-sugar cottage cheeses that are free of thickeners, gums, stabilizers, or additives.

Rhythm Superfoods – (the first company that 301 INC engaged with upon its launch) is a producer of a line of superfood snacks including Kale Chips, Broccoli Bites, Beet Chips, and Roasted Kale.

D’s Naturals – an innovative producer of plant-based, non-GMO, non-dairy protein bars that have an extremely low sugar content, and a line of protein-infused, dairy-free, low-sugar nut butters.

Farmhouse Culture – a producer of probiotic-rich foods and beverages including sauerkraut, probiotic drinks, and Kraut Krisps, a chip made with 50 percent sauerkraut.

Tio Gazpacho – a producer of portable, drinkable soups that contain no artificial ingredients.

And Beyond Meat – producer of a plant-based hamburger that looks, cooks, and tastes like ground beef.

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.