What trends have you observed in the food and beverage sector over the past few years?
What is happening in the marketplace is unparallelled in terms of rapid development and the expansion of emerging brands. A number of tailwinds are driving this new culture of health and wellness. We always seek to separate fad from trend, but the behaviours around plant-based snacking in particular have been going on for a long time. What tells me that it will continue is there are more good products coming out every day. A few examples include Rhythm beet chips, D’s Naturals plant-based protein bars, and Tio Gazpacho. You are seeing more and more innovation into the category, which indicates continued growth.
How important is the strategic fit for the corporate parent versus the eventual financial returns?
While 301 Inc looks to partner businesses whose products could eventually complement our existing offerings, acquisition is just one of several potential exit opportunities for our portfolio companies. We seek to invest in emerging food startups with a compelling product and strong brand that can be expandable.
We are looking for passionate and relentless founders, with demonstrated progress in market. Specifically, we are looking to make minority stake investments in startups in whole foods that are close to their original state, proactive nutrition, plant-based diets and omni-channel brands and services.
How much do you normally seek to commit to a startup?
Each partnership opportunity has its own unique characteristics. There is no set investment amount. We tend to focus more on company growth stages – such as having demonstrated in-market success, consumer loyalty and expansion into new categories, formats and channels – versus absolute size.
What is the ideal investment case for 301 Inc?
Our goal at 301 Inc is focused on building partnerships with emerging brands and then helping to accelerate their growth. We do that by providing investment capital and expertise to entrepreneurs who are working to create breakthrough innovation in the packaged food space.
These are the partners we have invested in, to date – plant-based snacking company Rhythm Superfoods, organic cottage cheese producer Good Culture, organic gazpacho producer Tio Gazpacho, non-dairy cheese manufacturer Kite Hill, plant-based food producer D’s Naturals, and organic probiotic food and beverage company Farmhouse Culture.
How does the corporate parent, General Mills, help these brands you partner?
If you look at General Mills’ portfolio, we operate in more than 20 categories across the grocery store. We are able to provide support in a number of areas, including operations or supply chain, distribution, technical and quality consistency, recipe development, and marketing and branding.
What is the most rewarding and the most challenging aspect of helping to elevate brands?
The most challenging aspect – when you look at change and activity in the marketplace, it is incredibly dynamic, but you need to keep pace. No success is overnight, but there is still the challenge of how quickly you can deploy resources to keep the momentum going. Combining investment capital with the resources of General Mills helps us achieve this.
The most rewarding – when we can combine the vision and passion of these entrepreneurs, not only with our team, so that we can help them meet consumer needs faster than ever, but also with each other. For example, we have helped make the connection between partners to consult each other about things like health insurance coverage and other business aspects unique to startups.
