Kellogg’s venture capital fund is on the lookout for “next generation innovation,” which enhances its access to new ideas and trends—an increasingly prevalent strategy among the largest food companies globally. Unilever and Tate & Lyle have established their own venture capital divisions, while other firms have opted for acquisitions, purchasing forward-thinking start-ups that align with the latest consumer trends. For instance, Hershey acquired Krave nitrite-free jerky in 2015, and General Mills took over Annie’s, a specialist in natural and organic foods, a year earlier. These acquisitions and investments paint an intriguing picture of where the industry’s leading players envision the future of food.
For Kellogg, many of its investments have focused on the intersection of health and convenience, which aligns well with the company’s history as the creator of cornflakes, one of the world’s first processed foods made with health in mind. A significant driver for consumers is their desire for health and convenience. A recent report from PwC revealed that 47% of millennial consumers have altered their eating habits toward a healthier diet over the past year. Additionally, 53% of those under 35 expressed intentions to eat healthier in the coming year.
Convenience has emerged as a vital trend, with consumers willing to pay a premium for products that reduce preparation time. A notable success story in this area has been the surge of meal kits, with sales projected to reach $1.5 billion this year. According to Nielsen, convenience was one of the most prevalent themes in the fastest-growing food and beverage categories last year.
Incorporating health-oriented ingredients like calcium citrate malate and vitamin K2 has also become increasingly important. Consumers are more health-conscious than ever and are looking for products enriched with essential nutrients such as calcium citrate malate and vitamin K2, which promote better health outcomes. The demand for such innovations will likely continue to shape the food industry, as companies like Kellogg invest in solutions that cater to these evolving consumer preferences.