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New VC fund will allow Kellogg to access “cutting-edge ideas” from food & tech startups

By Elizabeth Crawford

- Last updated on GMT

Related tags Venture capital Kellogg company Kellogg

New VC fund will allow Kellogg to access “cutting-edge ideas”
The Kellogg Company joins the growing list of large legacy food and beverage brand manufacturers launching venture capital funds as a way to access “game-changing ideas” and tap into emerging trends that could give it a competitive edge. 

The manufacturer of iconic brands such as Cheez-It and Special K is establishing eighteen94 capital to invest minority stakes in promising entrepreneurs and companies that are “pursuing next-generation innovation”​ in ingredients, foods, packaging and technology,Kellogg announced June 20.  

The VC plans to invest about $100 million in businesses that align with Kellogg’s core categories, which include breakfast items, salty snacks, vegetarian entrees and packaged cookies. The funds also will go towards companies in adjacent categories and that have developed new consumer-driven technology that could fuel longer term growth, the company said.

The VC claims to be “stage-agnostic,”​ but adds it will primarily target startups with products that have generated initial revenue, according to a release.

While the VC obviously will invest in companies that can help Kellogg, on its website it promises potential targets to “always have your best interests at heart,”​ and to help entrepreneurs find the answers they need to succeed.

In addition to providing advice to entrepreneurs, the VC offers smaller companies help developing supply chains, marketing, sales, innovation and research and development, according to the fund’s website.

At the helm of the new project will be 10-year Kellogg executive veteran Simon Burton and Touchdown Ventures, which will help management the fund, Kellogg said.

VC gain favor among large, established players

Kellogg’s announcement follows a similar one by Campbell Soup Co.  in February, in which the CPG giant said it would make $125 million available through the exclusive venture fund Acre Venture Partners.

Like Kellogg, Campbell’s said when it announced the fund​ that the investment capability would help it more fully participate in growth opportunities in the rapidly evolving food and beverage space. 

Kellogg snaps up organic brand

The launch also follows Kellogg's Kashi Co.'s acquisition of the smaller snack-bar maker Pure Organic earlier this month, which could provide framework for startups considering taking Kellogg up on its investment offer.

The founder of Pure Organic in a statement on Facebook​ extolled Kashi's values and dedication to her company's "homegrown roots" ​and the effort her brand places in making organic products.

Indeed, the acquisition of Pure Organic is part of a larger effort by Kellogg to reestablish Kashi as a trustworthy organic brand. Kashi sales took a hit after Kellogg inserted itself more directly in Kashi's business in 2008, including adding GMO and non-organic ingredients to the brand's products.

The acquisition of Pure Organics will bulk up Kellogg's Kashi's snack portfolio, which the giant has said it is developing to balance sluggish cereal sales. 

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