PepsiCo Partners With The Hatchery Chicago to Boost Food Startups


PepsiCo x The Hatchery Chicago

PepsiCo was one of the pioneers of the CPG business in finding ways to tap into the technology innovations and blooming talent at startups, when the beverage and snack giant began nurturing digital-marketing entrepreneurs in 2010. The company’s Latin America division has worked with young entrepreneurs with fresh ideas around sustainability. And it has been running a Nutrition Greenhouse program to partner with better-for-you-food startups and entrepreneurs in Europe for a couple of years.

The CPG/FMCG sector is a proud supporter of startups. Other major food and drink companies, ranging from Danone to Land O’ Lakes to Chobani to General Mills to Campbell Soup, have come up with their own versions of “big-to-small” investments via venture capital funds, accelerators, incubators and small nascent brands—all intended to create a stream of product and technology innovations and young talent that can be nurtured on their own and often plucked by the industry titan while the bigger company provides financial resources and operational expertise.

In a survey of 400 U.S. CEOs by KPMG, 46% identified accelerators and incubators for small companies as one way in which they plan to create growth in the next few years.

Now PepsiCo is launching a new program for working with startups. Its North America Nutrition division and The Hatchery Chicago, a food and beverage incubator, have struck a partnership aimed at helping entrepreneurs grow and scale their businesses “with the long-term goal of making high-quality, delicious products available to more people in more places,” according to a press release.

“I’m really excited about what we’re doing to make sure trusted nutrition choices are always within reach,” said Seth Kaufman, president of PepsiCo North America Nutrition, who was CMO of North American Beverages until taking this role in early 2017. “One of the ways we do this is by collaborating with like-minded, nutrition-forward partners who provide great insight into the future of food and who can also benefit from our expertise and resources.”

The Hatchery Chicago logo

The not-for-profit Hatchery Chicago is moving to a new location on the west side of Chicago in an underserved community and “food desert.” The partnership with PepsiCo will involve two-way mentorship between the organizations to provide go-to market and distribution ideas and aid to startups, while entrepreneurs help stretch the way PepsiCo’s people think about business models, products and markets.

“The future is all about collaboration,” said Natalie Schmulik, CEO of The Hatchery Chicago, in PepsiCo’s press release. It’s an important distinction that The Hatchery Chicago is an incubator vs. an accelerator—the non-profit food and beverage startup incubator addresses three main challenges for entrepreneurs: access to production space, financing and resources.

As Schmulik explained to Forbes last year, “Accelerators typically run 6-to-12 month programs to help businesses grow rapidly and build out. Usually, a business already has some sales when they join an accelerator. The purpose is to grow. As an incubator, we work with companies at every stage.”