The Kellogg Company — yes, the cereal and food giant — is in the midst of launching a corporate venture business, which will focus on food and related technology firms for investment purposes.
To be known as Eighteen94 Capital — the year the founding Kellogg brothers debuted their eponymous cereal — TechCrunch reported, the fund would represent a departure from the (until recently) normal appetites of VC, with at least some interest being revived in consumer packaged goods, even as that sector gets a jolt from new technologies geared toward manufacturing and other processes.
The market is a burgeoning one, as the U.S. Department of Agriculture has seen global retail food sales hit $4 trillion on an annual basis. The packaged goods sector, on its own and as part of that, could be $3 trillion within the next four years, as part of forecasts from Allied Market Research.
Some of the larger food firms that have launched their own VC activities include General Mills and Campbell Soup Co., which have arms known as, respectively, 301 INC fund and Acre Venture Partners.
In creating the Eighteen94 fund, Kellogg’s worked with Touchdown Ventures, which is based in California. The managing director of Eighteen94, Simon Burton, told TechCrunch: “The rate of innovation across our industry has picked up dramatically. Things are changing quickly, and investing is a great way to get a sense of what’s going to be important in the future.”
The target firms will have revenues of $5 million to $10 million and span natural foods to packaging to marketing efforts. Funding will come from the parent company’s balance sheet.