Danone’s investment fund searching for game-changing alternative protein, health drink and snack start-ups

25 Jun 2018 --- Danone Manifesto Ventures, the investment fund of the French food giant, is targeting startup firms in health drinks, snacks, baby food and alternative protein sectors – and plans to invest in around 25 companies by 2020. Located in New York City and launched at the end of 2016, Danone Manifesto Ventures brings health through food to as many people as possible by partnering with entrepreneurs in the food revolution. It is targeting startups disrupting markets and challenging dominant big brands and has made a series of investments so far.

However, Managing Director Laurent Marcel has recently said DMV is searching for new ways build relationships with customers and wants to ramp up investments over the next couple of years.

“Our ambition is to make between six and seven investments per year. We could have a portfolio of 20-25 companies by 2020,” he told Reuters.

“Finding new protein sources will be a big challenge for the planet in coming years. Many companies are searching for non-animal proteins. This is typically a sector we could invest in.”

The investments come at a time when global consumer tastes are shifting toward health and well-being, a trend which is dominating new product development across a multitude of food and beverage categories and re-shaping the food manufacturing industry in general.

And it’s these changes in consumer tastes that is pushing demand for healthy food that also has high sustainability credentials and is produced in an ethical way that protects the environment. More than ever people care about where their food comes from and how it ends up on their plate.

DMV believes there is plenty of opportunities for newcomers to enter into this space and win market share.

Last September, Danone Manifesto Ventures became a shareholder of Yooji, a French start-up that aims to revolutionize baby food by providing frozen portion-sized organic products. This was Danone Manifesto Ventures fourth investment in a year.

Founded in September 2012, Yooji responds to a growing demand from parents for high-quality, healthy baby meals which are easy and convenient, yet remain as close as possible to home-cooked meals.

Before that, DMV also invested in Michel et Augustin, alongside Artémis and Michel et Augustin’s founders. It was the first project for Danone’s corporate venture capital unit.

Launched in 2004, Michel et Augustin is a French company that designs and markets an innovative, premium range of biscuits, dairy products, fresh desserts and beverages. In just a few years, it has carved out a stable position in France, leveraging a unique model built on an original entrepreneurial adventure.

At the beginning of this year, Harmless Harvest, a leader in US Refrigerated Premium Coconut Water and a Fair for Life Certified Organic Producer, secured US$30 million in growth capital to support the growth plans of its healthy, nutrient-rich, organic products.

Danone Manifesto Ventures led the investment and Harmless Harvest is using the investment to support its growth initiatives by increasing and optimizing sustainable production capacity in Thailand, raising brand awareness and expanding geographic distribution to meet growing consumer demand for refrigerated premium coconut water.

In addition, Hawaii-based bottled water producer Kona Deep Corporation also secured a US$5.5 million investment from Danone Manifesto Ventures as well as Grand Crossing Capital and local Hawaiian investors.

The interest of major investors in start-ups will be a key theme that Innova Market Insights will address at the 2018 IFT Food Expo in Chicago, where the rise of plant-based foods, insect-based ingredients, vegan solutions, kombucha and cold-brewed coffee will be noted.

Continuously evolving consumer demands, together with the need to achieve a sustainable future, are helping to fuel start-ups with convention challenging innovation. For example, Goldman Sachs participated in a US$65m investment in Ripple Foods in early 2018, a start-up focused on milk-like beverages made from yellow pea.

Last week our sister website NutritionInsight reported how General Mills' venture arm, 301 Inc., is leading a US$12 million round in funding in NextFoods the parent company of GoodBelly Probiotics. The investment comes as GoodBelly looks to expand beyond beverages into snacks such as bars or other products. For General Mills and its venture arm, the deal furthers its presence in the probiotic space while leaning on its experience managing brands such as Nature Valley Bars and Annie's Homegrown snacks.

It also emerged that Danone's baby food brands were to undergo an image revamp.

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