Investing in the future of food
The last time I went to the grocery store, I couldn’t help but notice a whole host of new food brands on the shelves. If you don’t believe me, I encourage you to walk the aisles of your favorite supermarket and count how many new brands you can identify.
Did you know that General Mills is now working to help some of these emerging food brands succeed in the marketplace?
Under 301 INC, the company’s new business development and venturing unit, General Mills is providing entrepreneurs access to capital and our deep knowledge and expertise to develop, grow and expand their businesses.
I recently spoke with John Haugen, vice president and general manager for 301 INC, who leads this venture, to learn more about why and how the company is working with emerging brands.
What can you tell me about 301 INC?
John: 301 INC started a few years ago as a new business development team at General Mills. We were basically operating as a team of entrepreneurs within the walls of the company, charged with developing and launching new brands and businesses to enable next generation growth for General Mills.
In the first few years we focused on building businesses from the ground up. During this time we developed a product called nibblr, which was a subscription service that delivered customized snacks to somebody’s home or office. We put Progresso soup in K-cups so that customers could quickly make delicious soup with their home brewers. And we developed Pillsbury Pancake Batter, which put pancakes in the refrigerated section of the grocery.
Today we’re still focused on new business development, but our approach has changed. We’re now operating as a venturing arm with the resources and expertise that emerging food brands need to grow and thrive. We believe we can help accelerate the growth of these businesses by nurturing the skills and agility of the founders and providing them not only access to capital, but also the breadth of capabilities we have built as a food company over the last 150 years.
Why does 301 INC want to help food start-ups?
John: The rapidly evolving consumer landscape is dramatically changing the game in the food industry. We’ve realized that tremendous opportunity exists outside of General Mills to partner with and foster these emerging food brands. By combining the vision and passion of these entrepreneurs with General Mills’ extensive capabilities, we believe we can meet consumer needs faster than ever.
Why the shift in strategy?
John: Under our previous model, we were primarily building our own businesses. We learned it takes a lot of time to effectively incubate a new business. And frankly, companies like General Mills may not have the patience to stick with a business for five to seven years before it achieves the level of scale to become a sustaining business within their own walls.
We also realized that if there are any new business opportunities out there, some entrepreneur is likely already in that space. So we’ve shifted our focus to look for external partners where we can invest and incubate new businesses.
What did you learn under the old model that will help 301 INC succeed going forward.
John: We really learned what it’s like to “walk in the shoes” of these small, emerging businesses. We understand what it really takes to build a successful new brand and business from the ground up. This learning has been invaluable to help us more clearly define the role we can play moving forward. Our new approach allows all parties to play to their strengths – the entrepreneur’s vision and agility combined with the resources and capabilities of General Mills.
Are there any companies 301 INC has already invested in?
John: About two years ago we invested in Beyond Meat, a start-up company on a mission to develop plant-based protein that has the taste and texture of real meat. They sell core protein items – chicken strips, beef crumbles, things like that. It tastes a lot of better than the competing products that are out there.
If you look at the overall trends – half the population is trying to avoid meat and yet there’s a continued demand for protein. And they’re avoiding meat for many reasons – whether environmental, health, or cost. Yet demand for protein is as high or higher than it’s ever been. So we think there is a lot of opportunity here.
What sets 301 INC apart from other companies that are investing in early stage brands?
John: If you look at the portfolio of General Mills, we operate in more than 25 categories across the grocery store – cereal, yogurt, snacks, meals, frozen dough, frozen pizza, baked goods, soup. We believe our deep technical knowledge and capabilities in these areas, combined with our robust supply chain; marketing and sales excellence is what sets us apart.
What do you see as the emerging trends in the food industry?
John: There are a few key trends that we’re seeing in the food space right now. Wellness continues to emerge and we’re seeing more offerings that are fresh, minimally processed. Also, what I would call proactive nutrition, like probiotics, protein, new grains. Plant based nutrition, too, including alternative protein sources, non-dairy etc. We’re really interested in all of these areas.
To learn more about 301 INC, you can read John’s interview with Fortune.
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