Kellogg Company is the world’s largest producer of branded cereals and a leading manufacturer of packaged foods including cereal bars, cookies, chips, crackers and frozen waffles. The consumer packaged foods industry is under pressure from increased competition, a changing retail environment, and evolving consumer tastes. Kellogg’s leadership aimed to protect and increase its global presence in the breakfast foods and snack categories through innovation. The company identified four innovation priorities: hyper-convenience; strength, energy, and physical performance; next-generation of natural products; and digestive wellness. These priorities were to be manifested in new products along with renovations and extensions of existing products.
In 2016, Kellogg established an internal venture capital (VC) arm, eighteen94 capital, to invest in compelling innovations in ingredients, food products, and packaging. Eighteen94 capital was managed in partnership with a VC advisory firm, supported by a lean team within Kellogg. By 2017, eighteen94 had announced investments in three startups: Kuli Kuli a producer of food products that contained an ingredient called moringa, positioned as a new “superfood”; Bright Greens, which made single-serving smoothie products containing only fruits and vegetables; and Myco Technology, whose fungi-root-derived product could be used as a substitute for sweeteners to reduce bitterness in foods. Were these the right kinds of companies to invest in? Did this corporate VC model have potential?