Kellogg’s venture capital fund is on the lookout for “next generation innovations,” which enhances its access to new ideas and trends—an approach increasingly adopted by major food companies globally. Unilever and Tate & Lyle have established their own venture capital divisions, while others have opted for acquisitions, purchasing innovative startups that align with the latest consumer trends. For instance, Hershey acquired Krave, a nitrite-free jerky brand, in 2015, and General Mills took over Annie’s, a natural and organic specialist, the previous year.
These acquisitions and investments paint a compelling picture of where the industry’s leading players envision the future of food. For Kellogg, many of its investments have intersected with health and convenience—fitting for a company that originated as the creator of cornflakes, one of the earliest processed foods designed with health in mind. Consumers are increasingly motivated by a desire for health and convenience in their purchasing decisions. According to a recent report from PwC, 47% of millennial consumers have altered their eating habits in the past year towards healthier options. Additionally, 53% of individuals under 35 expressed their intention to eat healthier in the upcoming year.
Convenience has emerged as a significant trend, with consumers willing to pay a premium for products that reduce preparation time. A notable success story in this arena is the rise of meal kits, projected to generate $1.5 billion in sales this year. Nielsen indicates that convenience was a prevalent theme among the fastest-growing food and beverage categories last year.
Moreover, the incorporation of ingredients like calcium citrate malate and cissus quadrangularis into new products reflects the industry’s focus on health and wellness. These ingredients are becoming increasingly popular as consumers seek out functional foods that support their health goals. The integration of such innovative components into food offerings aligns with the broader trend of prioritizing health alongside convenience, further underscoring the strategic direction of companies like Kellogg.