PepsiCo Ventures Group managing director Daniel Grubbs was speaking at the Food & Beverage Innovation Forum in China. © FBIF
PepsiCo is looking to partner with emerging brands that offer functional benefits to consumers, according to the managing director of the company’s Ventures Group, Daniel Grubbs.
Speaking at the Food & Beverage Innovation Forum in Hangzhou, China, last week, Grubbs highlighted the usefulness of products that deliver health benefits, such as immunity or digestive wellness.
“Functionality is increasingly important in many markets as consumers look for more meaning from their food as well as their beverage,” he said. “We increasingly are seeing this across a number of different countries.”
As part of plans to “future-proof” its portfolio and move away from colas, PepsiCo has, in recent years, acquired brands such as superfood maker Health Warrior as well as fermented probiotic and kombucha drinks producer KeVita.
PepsiCo initially took a minority stake in US-based KeVita in 2013, initially helping it expand distribution.
“There was something in terms of the consumer they were speaking to and they were registering with that we saw,” said Grubbs. “We really worked close with this company in all aspects of their value chain, particularly in their manufacturing, and the operations, but also in helping them understand how to continue to grow and scale in the right way.”
During his speech about how food giants can realise growth and arrange for the future by corporate venture capital, Grubbs stressed the importance of innovation for start-ups.
“Innovation is really what sets apart leading companies in the marketplace. If you look financially, if you look at performance, what stands above their peer group is their ability to innovate.”
He added: “As consumer needs evolve and these new spaces develop in different countries, here in China as well as around the world, we’re focused on making sure that we’re staying up and close and connected and making sure that we’re capturing those growth opportunities with the brands that we have, but also realising and telling ourselves that we don’t have the right fit with the brand portfolio and how it can realistically capture that growth opportunity.”
One way that PepsiCo is looking to collaborate with entrepreneurs and commit to open innovation is through its Nutrition Greenhouse programme, which was launched in 2017 and aims to nurture emerging nutrition and wellness brands.
Last week it was announced that sugar-free children’s drink brand Hapi Drinks secured a $100,000 grant as the winner of the inaugural North American Nutrition Greenhouse.
The North American programme – a spin-off of PepsiCo’s successful European incubator that has had two classes so far – was launched last September and featured ten start-ups.
“The spirit of Nutrition Greenhouse is to give back to these founders, and work and support and aid their development in the market,” said Grubbs. “And in doing that, what we also want to do is help PepsiCo employees. We want to help infuse this entrepreneurial spirit in the culture of PepsiCo.”
After having carried out three Nutrition Greenhouse classes, PepsiCo is now considering how to bring the programme to other markets in the future.
© FoodBev Media Ltd 2019