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Dive Brief:

  • Nestle USA has invested in an accelerator program to support emerging food and agriculture startups, according to FoodBev Media.
  • The program, dubbed the Terra Food + Ag Tech Accelerator, teams Nestle with financial services firm Rabobank, which specializes in food and agribusiness, and technology company Rocketspace.
  • Around 20 startups are expected to be supported during two six-month programs. Finalists for the initial program will be selected in the fall. Applications for the second program are due to open in 2018.

Dive Insight:

Nestle is the latest in a string of consumer packaged goods companies — including Chobani, General Mills, PepsiCo, and others — to establish an accelerator program to help startups. The company said the program will help provide it with some fresh ideas to keep Nestle at the forefront of a rapidly changing market. It's a move that couldn't happen soon enough and might help Nestle position itself for sustainable growth through its investment in food industry up-and-comers.

Big brands have been losing the innovation game to smaller, nimble food startups that are able to more easily satisfy consumer demand for the interesting, unique and healthy — a factor that allows them to grab shelf space away from big CPGs at the same time. The top 25 food manufacturers’ share of U.S. food and beverage retail sales declined from 66% in 2012 to 63% in 2015, according to a study from A.T. Kearney and The Hartman Group.

"Our partnership with Terra by Rabobank and RocketSpace is just one way in which Nestle can play a leading role in meeting quickly evolving consumer expectations and explore new disruptive technologies and business models," Rui Barbas, chief strategy officer, Nestle USA, said in a press release. "When we combine the resources of Nestlé with the creativity and new thinking born from the startup culture, we can create real change in our industry and best deliver on consumer needs."

Insect snacks and seaweed protein, for example, are among the finalists of the PepsiCo Nutrition Greenhouse incubator, which the company established earlier this year. Members of Chobani’s inaugural incubator class include makers of bone broth, meat snacks, chickpea pasta and a cold-pressed juice company that uses mostly recovered fruits and vegetables that would otherwise have become food waste. General Mills' 301 INC counts companies specializing in priobioticsplant-based proteinand vegetable chips among its startup investments. These are just some examples of fresh ideas coming out of incubators to help spur innovation at a huge multinational companies such as Nestle.

It’s too soon to tell whether investing in startup accelerators can really move the needle for big food and beverage companies. But at the very least, CPGs should be able to pick up new ideas — in ingredients, processes, sustainability and technology — which could translate into meaningful differences when incorporated into existing businesses. And oftentimes the real objective is helping startups scale up so they then become attractive acquisition targets.

The decision to venture into the risky and often unpredictable world of venture capitalism reflects just how far big CPGs are willing to go to find new sources of revenue amid changing consumer tastes and stagnating sales in their own operations.

About Terra

Founded in 2016, TERRA is a leading global innovation accelerator fueling groundbreaking transformation in Food and Agriculture. The program brings together experts, decision-makers and innovators across the entire value chain – fostering connections that catapult major breakthroughs into scalable solutions by pairing emerging growth companies with established multinationals, in a pilot-driven engagement that leads to tangible results. Unlike other accelerators, TERRA does not require equity from startups. Startups must have a product in market/ready to launch and have raised a minimum of seed-funding, better positioning them for productive pilots with corporate collaborators. For more information on TERRA, please visit www.terraaccelerator.com. Since launching, TERRA has brought together 12 corporate collaborators worth over $100B in annual revenue, 51 emerging growth companies and launched 47 pilot partnerships.

Terra PR Contact

Tina Wung

About RocketSpace

Founded in 2011 in San Francisco, RocketSpace is a global ecosystem of people and ideas that provide the necessary velocity - both speed and direction - to help the world’s top innovators bring the future to market. By uniting the highest quality corporate innovators, startups and investors across a holistic platform, RocketSpace fuels collective growth for the entire innovation ecosystem. Learn more at Rocketspace.com.

About Rabobank

Rabobank Group is a global financial services leader providing wholesale, rural and retail banking, leasing, and real estate services in more than 40 countries worldwide. Founded over a century ago, Rabobank today is one of the world’s largest banks with over $750 billion in assets. In North America, Rabobank is the premier bank to the food, agribusiness and beverage industries, providing sector expertise, strategic counsel and tailored financial solutions to clients across the entire food value chain. Rabobank believes sustainability and innovation are critical in promoting a thriving food and ag industry that will feed growing global populations for years to come, which is a key focus Rabobank’s Banking for Food vision to grow a better world by 2050.

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