Kraft Heinz, the food giant better known for its ketchup and Oscar Mayer cold cuts, is announcing its first bets on the brands it hopes will be part of the future of snacking.
Ahead of a formal announcement on Monday, the company told CNBC its new growth arm, Springboard, is partnering with these five food start-ups: Ayoba-Yo meat snacks, Cleveland Kraut fermented food, Kumana avocado-based sauces, Poppilu antioxidant lemonade and Quevos egg-white snacks.
The brands it selected are “breaking the mold, trying new things,” said Eduardo Luz, Kraft Heinz’s president of U.S. grocery. “As we get closer to them … we see what works,” he added.
Springboard focuses on developing and learning from young brands, a strategy that other big food companies have adopted as they grapple with stagnating sales.
Wall Street is increasingly focusing on Kraft Heinz’s own sales, which were down 3.3 percent in the U.S. this past quarter.
The ketchup maker is backed by private equity firm 3G Capital, known for its aggressive cost-cutting. After having slashed $1.7 billion in costs following the 2015 merger of Kraft and Heinz, it now finds itself with the same challenge as many of its food-giant peers: how to get consumers to buy more of its products when small upstarts incessantly eat into sales.
The goal is to stay closer to the pulse of innovation. For many, it is also to catch small brands before they become so powerful that food giants are forced to buy them at high prices. Kellogg, for example, recently paid $600 million to buy protein bar RX bar.