Kellogg starts venture fund to find growth amid cereal slump

Kellogg's Corn Flakes cereal is pictured at a Ralphs grocery store in Pasadena, California August 3, 2015. REUTERS/MARIO ANZUONI

Kellogg Co., struggling with slumping U.S. cereal sales, will invest about $100 million in a venture fund, a bid to use a Silicon Valley approach to find the food industry’s next growth engine.

The fund — named Eighteen94 Capital, a nod to the year the company’s flaked cereal was invented — will look to take minority stakes in startups developing new packaging, ingredients, products and technology, Kellogg said in a statement Monday.

Kellogg joins packaged-food rivals General Mills Inc. and Campbell Soup Co. in turning to venture funds to cope with a changing industry. Big food companies have suffered from U.S. consumers shifting to more natural and fresh products, a move away from many grocery-store stalwarts. With startups taking market share, Campbell announced a $125 million venture fund in February. The General Mills fund, known as 301 Inc., has invested in companies such as Kite Hill and Beyond Meat that are working on the next generation of vegan products.

“As consumer preferences move toward more diverse tastes and trends, the pace of innovation in the packaged food industry continues to intensify,” Gary Pilnick, vice chairman of Battle Creek, Michigan-based Kellogg, said in Monday’s statement. “By investing directly in the most promising entrepreneurs and ventures, we can increase greatly our access to game-changing ideas and trends that could become significant sources of growth for us.”

Kellogg shares rose 0.5 percent to $77.18 as of 11:20 a.m. in New York on Monday. The stock had gained 6.2 percent this year through the end of last week.

Also read:

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Good times ahead: In India and Southeast Asia, venture funding back at 2015 levels

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.