(Reuters) - Kraft Heinz Co (KHC.O) has launched an incubator program for food and beverage startups, joining a growing list of U.S. food companies looking at new ways to spur growth as consumers shun processed packaged food in favor of healthier offerings.
Kraft said on Wednesday the platform, called Springboard, will focus on supporting and developing brands that make healthy, organic and experiential products, giving them access to the company’s distribution and marketing expertise, research and development and consumer insights.
Smaller, independent brands are seen by many consumers, especially younger ones, to be more hip and healthy and rather than compete with them many big food and drink companies have looked to buy into and learn from startup innovation, a leaf straight out of Silicon Valley’s playbook.
As part of the program, Springboard will review applications from “disruptive” food and beverage startups, which will then receive financial support to build their brands and guidance to raise additional funding, Kraft Heinz said.
Investors were positive about the new venture, but said the platform may not be enough to drive long-term sales growth for Kraft Heinz, which has a market value of about $82.6 billion.
“It will take time to effect change at a company this size, and the Springboard initiative itself will not be sufficient. Nevertheless, it is a step in the right direction,” Jason Benowitz, a senior portfolio manager at Roosevelt Investment Group, told Reuters. Roosevelt Investment owns Kraft Heinz’s shares worth $9.8 million.
Kraft Heinz’s move comes a year after Kraft Heinz walked away from a $143 billion bid for Unilever (ULVR.L) after the European consumer goods behemoth dismissed the offer as having no financial or strategic merit.
Reporting by Uday Sampath in Bengaluru; Editing by Maju Samuel