Campbell Soup to support food startups, starts with a $125 million venture fund
By Staff Writer
Feb 19, 2016 05:04 AM EST
Feb 19, 2016 05:04 AM EST
Campbell Soup announced, on Wednesday, its new venture capital fund of $125 million which will be independently managed by Acre Ventures GP, LLC. This is soup giant's yet another move to boost the food industry that is mainly focused on converting the fresh farm greens into home delivery items.
Having acquired quite a few food businesses of different variety, Campbell will be the sole limited partner in the new fund, though its management will be under unidentified third-party members. According to AdvertisingAge, CEO Denise Morrison said at the Consumer Analyst Group of New York Conference, "There's a massive influx of venture capital aimed at disrupting the food ecosystem, flowing from traditional VC firms and from funds managed by large food companies. Since 2010, approximately 400 food startups have received more than $6 billion in funding."
When it comes to startups, Morrison thinks a more strategic and methodical approach is needed, although she has already invested in some at quite an early stage. She clearly states that the food giant's current focus is to aggressively pursue "disruptive" food trends. It is now Campbell's goal to define real food which requires the flexibility to acknowledge new approaches, new business models, and an enhanced external development, along with innovative partners.
However, this quest for growth is not proving to be easy for the food giants. A slowing economy and a shrinking US middle-class population are looming large, thus adversely affecting the mature markets. At the same time, the growing change in food pattern of the masses is an added factor.
As per Fortune, the consumers are demanding greater transparency regarding their key ingredients, source, and quality. As Morrison puts it, "..even our own employees, are questioning food." They now have lesser trust on legacy food companies and will shift towards a company that can quell their concerns and cater to their changed needs.
The Street reports that the company's shares rose 2.5% in trading on Wednesday. Campbell disclosed its full-year sales, stating that the year-over-year sales remained mostly flat, between 1% down to unchanged. However, the full-year profit looked better due to cost cuts and deflation in the commodities market. The company now expects its adjusted earnings before interest and taxes to increase 10-13% versus the previous 4-7%.
The food giant is extremely busy acquiring and expanding product lines currently. Its Bolthouse Farms better-for-you brand is slated to launch 14 new products, beverages and dressings, this year. It will also introduce six new products as a part of the new 1915 organic juice brand, which will also include the first plant-based protein drink.
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