Kraft Heinz, the food giant better known for its ketchup and Oscar Mayer cold cuts, is announcing its first bets on the brands it hopes will be part of the future of snacking.
The company plans to announce Monday the first five food start-ups it is partnering with through its growth arm, Springboard, which it launched in March.
The brands are: Ayoba-Yo meat snacks, Cleveland Kraut fermented food, Kumana avocado-based sauces, Poppilu antioxidant lemonade, Quevos egg-white snacks.
The five brands it selected are “breaking the mold, trying new things,” said Eduardo Luz, president of US grocery for Kraft Heinz. “As we get closer to them … we see what works,” he added.
Springboard focuses on developing and learning from young brands, a strategy that other big food companies have adopted as they grapple with stagnating sales.
Wall Street is increasingly focusing on Kraft Heinz’s own sales, which were down 3.3 percent in the US this past quarter.
The ketchup-maker is backed by private equity firm 3G Capital, known for its aggressive cost-cutting. After having slashed $1.7 billion in costs following the 2015 merger of Kraft and Heinz, it now finds itself with the same challenge as many of its food-giant peers: how to get consumers to buy more of its products when small upstarts incessantly eat into sales.
PepsiCo, Coca-Cola, Mars, General Mills, Campbell, among others, have all launched similar venture or incubator arms.
The goal is to stay closer to the pulse of innovation. For many, it is also to catch small brands before they become so powerful food giants are forced to buy them at skyrocket prices. Kellogg, for example, recently paid $600 million to buy protein bar RX bar.
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