General Mills Launches Venture Capital Firm for Food Startups

By Lauren R. Hartman, Product Development Editor

Oct 22, 2015

General Mills is launching a new venture capital arm to nab a stake in small companies that could someday become big players in the grocery market, according to a report in Fortune. Finalized about three months ago, the new business unit called 301 Inc., will take investment stakes in small, early-stage, regional startups that are looking for capital to grow.

"We have found that more and more innovation was coming from small companies," according to John Haugen, vice president and general manager of 301 Inc. "There were ways for us to partner and provide growth capital."

The report indicates that General Mills wouldn’t confirm if it has already made any investments under its new 301 Inc., unit, other than its "test" of a minority stake in plant-based food maker Beyond Meat. Since that partnership started a few years ago, General Mills has helped Beyond Meat with supply chain challenges and is currently working on new products General Mills expects will appear on the market early next year.

The company’s net sales fell 2 percent to $17.6 billion last year as major food processors are under pressure to attract consumers who are opting for more fresh fruits and vegetables, better-for-you foods, organics and small specialty brands.

301 Inc. has actually 301 Inc. been operating as a business within General Mills for three years now. Originally created to internally develop small, disruptive brands, Haugen says it makes more sense to invest in more nimble early-stage startups that can compete with fast changes in the grocery aisle.

General Mills reportedly cited three major factors that 301 Inc. will consider as a venture capitalist. First, to be sure that any investment provides a genuine opportunity to compete in new categories. Second, try to arrange some deals so General Mills could buy the startup down the road. Third, General Mills will have some financial metrics and goals in mind with the investment. The company wants to build a case as an indispensable partner that can help an entrepreneur build and scale their vision for the future, says Haugen.

 

Show Comments
Hide Comments

Join the discussion

We welcome your thoughtful comments.
All comments will display your user name.

Want to participate in the discussion?

Register for free

Log in for complete access.

Comments

No one has commented on this page yet.

RSS feed for comments on this page | RSS feed for all comments