Fortune 500s Think Small
With the proliferation of food industry disruptors, Fortune 500s are feeling the pressure to think like startups.
Both Cargill and General Mills are revving up their investments in innovation by supporting and incubating startup companies.
But this is not just a goodwill gesture—a successful startup can benefit the large corporation, too, says Lawrence Wang, Cargill’s director of digital strategy development. Wang heads the company’s Techstars Farm to Fork Accelerator program. Currently in its second year of a three-year commitment, Cargill is partnering with Ecolab and Techstars, a worldwide network aimed at helping entrepreneurs succeed. Each year, the Farm to Fork Accelerator accepts fewer than a dozen food-focused startups out of hundreds of applicants from around the world; those companies participate in a 13-week residence and training program in the Twin Cities. The startups work with several dozen Cargill mentors who provide advice, networking, and venture capital.
“It’s a chance for [our mentors] to learn about those new business models, offer their input and guidance, and, in a very few cases, try to identify: ‘Is this something that Cargill would want to test a concept with?’” Wang says. Out of nine startup participants in last year’s round, Cargill tested concepts with three.
“We’re just trying to, over time, drive strategic alignment,” Wang says. “We really view this as an extension of the efforts we’re making to transform ourselves internally. It’s not an either/or kind of proposition; it’s an ‘in addition to,’ and an extending of what we can do.”
General Mills agrees. In 2015, the company founded 301 INC to collaborate with emerging food brands on breakthrough innovations that benefit the overall industry.
“We’re in the middle of a seismic change in the food industry,” says John Haugen, founder and managing director of 301 INC and a 29-year veteran of General Mills. The way companies keep up, he adds, is by partnering with other entrepreneurs to nurture fresh ideas.
Startups can pitch their ideas to 301 INC, and if they are chosen, a team of General Mills experts helps with anything they need, from product development and supply chain operations to marketing and more. The current cohort of eight brand partners includes GoodBelly Probiotics, Good Culture, and No Cow.
Once brands “graduate” from 301 INC, they are either acquired by General Mills or they go off and do their own thing. Tio Gazpacho and Beyond Meat, two brands on their way to becoming household names, went through 301 INC before branching out on their own.
Of course, General Mills loves when brands stay with the company, Haugen says, but the company is looking beyond its own bottom line to help grow good ideas and send them off into the world.
Says Wang, “We’re all just in a continual process of learning.”