PepsiCo Nutrition Greenhouse accelerator grants US$100,000 to children’s sugar-free drinks start-up

25 Apr 2019 --- US sugar-free children’s drinks start-up, Hapi Drinks, has been awarded a US$100,000 grant through PepsiCo’s Nutrition Greenhouse accelerator program. The initiative helps finance and guide companies with on-trend products and ideas for future innovations that could help shape the food and beverage space. By collaborating with smaller brands, the soft drinks giant’s accelerator program is designed to nurture the growth of emerging brands quickly, while driving PepsiCo to the forefront of innovation.

“Our financial grants and active collaboration with the small companies in the Nutrition Greenhouse have led directly to rapid innovation for many of the participating companies. Some of the companies in the program have launched new products and line extensions, some in as few as fours weeks,” Daniel Grubbs, PepsiCo Ventures Group Managing Director, tells FoodIngredientsFirst. 

Collectively, the 10 companies in the Nutrition Greenhouse grew average revenues of 200 percent through the six-month duration of the program. 

New product lines, digital campaigns that have driven sales and new customer acquisitions, have been among the other successes stemming from the Nutrition Greenhouse. 

Click to EnlargeHapi Drinks received the grant money during the culmination of PepsiCo’s inaugural North American Nutrition Greenhouse classTexas-based company Hapi Drinks received the grant money during the culmination of PepsiCo’s inaugural North American Nutrition Greenhouse class, which was originally launched last autumn. 

The program welcomed ten diverse companies as part of its first class, providing each with US$20,000 and a partnership with PepsiCo mentors – experts in strategic planning, brand optimization, product development, supply chain management, customer acquisition and distribution.

“Hapi Water demonstrated all the core aspects of what the Nutrition Greenhouse stands for: Collaboration, Nurturing the Entrepreneurial Spirit and Strategic Business Acceleration,” Grubbs adds. “Our selection committee focused our criteria on how well the companies engaged and collaborated with PepsiCo and all the other Greenhouse participants, as well as key business metrics around business expansion, such as sales acceleration and strategic growth initiatives.”

“Karsten and his team were outstanding partners, working with their mentors to truly focus on driving the business forward.”

The insights, guidance and connections the PepsiCo mentors provided to Hapi Drinks have been essential to unlocking new growth avenues, says Karsten Idsal, President and Co-Founder. Click to EnlargeKarsten Idsal, President and Co-Founder of Hapi Drinks

“The program had such great companies involved and everyone experienced strong growth. The award will be very helpful in contributing to further growth at Hapi Drinks,” he tells FoodIngredientsFirst.

“We received great mentorship from our mentors in the Nutrition Greenhouse and they helped give us good direction on growing our business. I feel, as an entrepreneur, more confident in our business having participated in the Nutrition Greenhouse,” he adds. 

Idsal explains that Hapi Water was the brainchild of company co-founder, KB Parkes, a dentist in Nashville. He saw the increase in cavities and obesity and attributed to increased consumption of sugary products.

Tackling childhood obesity by “providing great tasting sugar-free kids drinks” is a core company objective, adds Idsal, “and it is fantastic to get PepsiCo's support in our efforts,” he says.

Sugar reduction in soft drinks continues to be a key part of reformulation and NPD globally. Last year’s Innova Market Insights Consumer Lifestyle and Attitudes Survey revealed that nearly seven out of ten consumers across the countries surveyed (US, UK, France, Germany, China and Brazil) had reduced their sugar intake. 

PepsiCo itself is going through somewhat of a revolution that includes shaking off a salt, sugar and fat laden image. PepsiCo is making moves to become a more holistic business focusing on high-growth opportunities in the market such as healthy alternatives, well-being and nutrition. It is also shifting focus toward the type of products the company wants to sell in the future and the type of business it wants to become – one which is much more focused on sustainability with a socially-minded attitude.

Click to EnlargePepsiCo Nutrition Greenhouse 2018 Class of MentorsSoft drinks competitor, Coca-Cola has also been reducing sugar across its portfolio, successfully re-launching Coca-Cola Zero Sugar in 2017.

PepsiCo initially launched its Nutrition Greenhouse accelerator program in North America in September 2018. The North American program follows the launch of PepsiCo’s Nutrition Greenhouse in Europe, now in its second year. In 2017, eight start-ups in the European program delivered an estimated combined sales growth of over €10 million (US$11.1 million), a four-fold increase throughout the duration of the six-month program. 

FoodIngredientsFirst has previously spoken with PepsiCo’s David Schwartz, Head of ESSA Venturing & Innovation, about PepsiCo’s Nutrition Greenhouse program and what it means amid a more holistic healthy evolution at PepsiCo as a whole. 

Growth and innovation are pivotal for industry and an efficient way to achieve both is to invest in promising start-up companies, as demonstrated by PepsiCo’s Nutrition Greenhouse. 

Small players can bring innovative ideas and a fresh view of the market that established companies value. The dynamic food business arena is ever-changing and keeping up with consumer demands requires staying on top of trends that smaller players may find easier to identify. 

This is a trend across the entire food and beverage industry with several other key players operating their own accelerator program working with start-ups to grow innovation. Our sister website, NutritionInsight, recently highlighted several similar programs in support of growth and industry innovation. 

By Gaynor Selby

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