Kraft Heinz Co. is joining the ranks of Big Food peers with a venture capital fund focused on concepts that are shaking up the food industry, such as supply chain technology and e-commerce.
The packaged-food giant has committed $100 million to start a new firm called Evolv Ventures, which will invest in food technology companies. To lead the Chicago-based fund, Kraft hired Bill Pescatello, a founding member of Peacock Equity, an investment group put together by NBCUniversal and GE Capital.
"There's a ton of disruption in the food industry driven by technology and new models," Pescatello said in an interview. Evolv will focus on startups working on supply chains, logistics, e-commerce and direct-to-consumer projects, he said.
Evolv is Big Food's latest effort to boost flagging sales by hitching its wagon to fast-growing food startups. In 2016, Kellogg Co. invested $100 million in a venture fund, while General Mills has used its fund to invest in companies such as Kite Hill and Beyond Meat.
While this is Kraft Heinz's first fund, it also has a division called Springboard, which nurtures upstart brands and is on the lookout for opportunities beyond the company's mainstay brands such as Velveeta and Jell-O. Kraft Heinz needs to find new hits: The company's margins are under pressure due to higher marketing and product-development expenses.
-- Bloomberg News