Mondelez's new startup accelerator is giving $20,000 grants to early-stage snack brands. The head of its venture arm outlines what she's looking for.
- Mondelez just announced CoLab, a program to recruit more early-stage food startups.
- CoLab is the snack maker’s lastest effort to find brands that could become the next Hu.
- Mondelez’s Brigette Wolf told Insider she’s looking for unique approaches to healthy snacks.
- Visit the Business section of Insider for more stories.
Brigette Wolf spent much of her career at Mondelez thinking about long-term strategies for the company’s big brands like Oreo and Belvita.
But ever since she became global head of SnackFutures, the venture arm that Mondelez founded in 2018, Wolf has found herself working with increasingly smaller brands. One recent SnackFutures brand launch, a line of nut butters blended with mushrooms called Millie Gram, is starting out in just over a dozen stores in Southern California as well as through a direct-to-consumer website.
“These are not national rollouts that Mondelez would do with the next Oreo flavor,” Wolf said.
Working with brands at an earlier stage in their development allows Mondelez to build a stronger relationship with the founders — and, hopefully, make the snack company their first stop when they want to raise funding or talk about an acquisition, Wolf said. SnackFuture’s latest program, CoLab, will offer $20,000 grants and mentorship to 10 startups and their founders starting this summer as Mondelez looks to add to its bench of potential investment and acquisition targets.
But it also carries risks. The companies that CoLab is targeting have even less experience than brands like Hu chocolate, meaning that Mondelez has even less to evaluate the brands on. SnackFutures acquired Hu in January after making a minority investment in the brand in 2019.
As it evaluates brands for CoLab, SnackFutures will pay attention to factors like whether brands have intellectual property or own other assets, as well as whether the brand’s products are driving growth in their category, Wolf said.
“If you had to ask someone ‘What are the minimum requirements?’ it’s a wellbeing snack company, $500,000 in revenue,” she said. “Those are the answers to what we’re looking for.”
“If you have a half-million dollars in revenue, you’ve got something going on there,” she said. “You’ve got a proof of concept, you’ve got some level of distribution. We can help you figure out where that next piece of growth is.”
Beyond that, though, SnackFutures expects startups to provide the inspiration. “Wellbeing” can include many different types of products, Wolf said. SnackFutures’s first-ever investment was in a company called Uplift Food, which makes pro-biotic cookies. Outside of SnackFutures, Mondelez’s acquisitions in recent years include its 2019 purchase of a controlling share in Perfect Bar for $284 million and its 2018 buy of cookie brand Tate’s Bake Shop for $500 million.
“What we’ve demonstrated is that there’s a much broader definition of snacking,” she said. “Having that kind of connection of consumers and their wellbeing is really what we’re looking for.”
Candidates aren’t limited to food brands themselves, either: Last fall, SnackFutures made an investment in Torr, and Israeli company that creates alternatives to binding agents and preservatives commonly used in snacks.
Mondelez isn’t alone in looking for the next breakthrough brand. Its peers among big food companies, including Kraft Heinz and Mars, are also combing crops of startups for potential investments.
Mondelez’s largest brands, including Oreo and Ritz crackers, have gotten a boost over the past year as consumers eat more at home instead of grabbing a quick bite while at work or out with friends. That has translated into a healthy balance sheet and the ability to make acquisitions, CEO Dirk Van de Put said at an investor conference in December.
Acquiring smaller companies is a priority, since larger targets are few and far between, he said. “The issue is that it’s difficult to find pure snacking companies,” especially one with significant scale, Van de Put said. “So we are more focused on bolt-on acquisitions in attractive spaces.”
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