Nov 10 2023

Consumer Packaged Goods With a Focus in Open Innovation

The CPG (Consumer Packaged Goods) industry is experiencing a wave of open innovation initiatives supported by public entities, recognizing their pivotal role in nurturing startup and entrepreneurial growth

In an era marked by a high level of connectivity and access to information and communication technology, rapid technological advancement, and a globalized marketplace, the concept of innovation has transcended the lines of individual enterprises.

In many cases it has evolved into a dynamic, collaborative process, known as open innovation, that plays a pivotal role in shaping the trajectory of various industries. Among these, the agrifoodtech sector stands out as a particularly fertile ground for open innovation's transformative potential.

Innovation runs through every facet of the agri-food value chain, extending from agricultural practices to food service. While the concept of innovation has been a staple in the corporate landscape, its definition has undergone a transformation over time. In today's context, innovation is defined as the application of new ideas to either revolutionize or create products or services that introduce a fresh layer of value, mainly enhancing their worth and efficiency.

The dynamic environment we currently navigate, characterized by factors such as digitalization, population expansion, economic fluctuations, food supply challenges, and technological advancements, underscores the paramount role of collaborative innovation. It holds immense promise as a tool to meet the ever-growing demands for adaptation within the agri-food industry.

The Spanish food industry is interested in incorporating open innovation programs into its innovation strategies, i.e. collaboration with other agents, especially with startups.

In this regard, there is increased engagement of various stakeholders, both public and private, in promoting initiatives that foster the collaborative work to create  innovative solutions to diverse challenges.

Incubation & Acceleration programs supporting innovative CPGs growth

The CPG (Consumer Packaged Goods) industry is experiencing a wave of open innovation initiatives supported by public entities, recognizing their pivotal role in nurturing startup and entrepreneurial growth.

One noteworthy venture in the realm of open innovation is KM ZERO corporate venturing program, an open innovation initiative based in Valencia, Spain, with support from 9 corporations, including CAPSA VIDA, Embutidos Martínez, Grupo Arancia, Helados Estiu, Incarlopsa, Mahou San Miguel, Makro, Platos Tradicionales, and Vicky Foods. Additionally, it involves 20 investment funds, with the potential to invest over 2.5 billion euros in assisting startups.

The 20 international selected startups received a personalized work plan and guidance from all the stakeholders involved. Among the chosen startups, those in the CPG sector focus their efforts on areas such as the development of new proteins, health and digitization, providing solutions to enhance the nutritional profile of food, or implement technologies that boost the efficiency of the food industry.

Notable Spanish startups include Wevo in Madrid, creating plant-based eggs, Väcka in Barcelona with plant based cheese alternatives, Gloop in Madrid producing edible utensils, Pack2Earth in Barcelona with compostable packaging, Oscillum in Elche specializing in smart labeling, and Color Sensing in Barcelona, providing smart labeling for food safety and quality. These startups are at the forefront of innovation in the CPG sector, driving positive change and setting new industry standards.

In the same line, Lanzadera, the Valencian business accelerator belonging to Marina de Empresas, has chosen more than 100 startups, with whom they collaborate alongside large companies seeking to innovate with unique startups, fostering open innovation in this manner. Among these startups, several foodtech proposals extend their focus from promoting healthy and convenient foods to pioneering new payment methods, and managing surplus food, all of which encompass the CPG spectrum.

The foodtech innovations include: Kiwit Investment, utilizing AI for personalized menu creation; Remolonas, addressing the industry’s food waste to create new food products; Eatsygo Gourmet, delivering gourmet chef-prepared meals to every corner of Spain; Natural Fonan, offering healthy vitamin/protein shake powders; GutXain, providing cashback savings for Valencia residents; and Kubik, facilitating shared purchases and payments while reshaping consumption patterns.

These innovative startups are poised to transform various aspects of the consumer packaged goods (CPG) market, offering a wide range of solutions to meet the evolving needs of today's consumers.

Other players backing CPGs through open innovation

In our rapidly changing world, with pressing environmental concerns, the food industry faces significant challenges. The necessity of adopting sustainable practices is undeniable. In response, Pascual Innoventures, the Corporate Venture arm of the renowned Spanish dairy and beverage manufacturer, Pascual, has partnered with the leading Foodtech accelerator, Eatable Adventures, to launch Mylkcubator: More Than Mylk. This pioneering program is the world's first dedicated to advancing cellular agriculture and fermentation technologies in the realm of alternative food production and CPG offering in the market. The third edition of Mylkcubator broadens its focus to explore technologies aligned with Pascual's strategic areas of interest, with the aim of making a more significant impact within the alternative food industry sector through collaboration with disruptive startups. The program not only concentrates on innovations for biosynthetic dairy products but also delves into emerging technologies related to Alt. Egg, Alt. Coffee, Alt. Lipids, Alt. Cocoa, Sodium & Sweetener Replacements, and Functional Ingredients. This initiative creates new opportunities for startups to introduce their innovative food products to the market, with the support and expertee of the prominent food company Pascual by their side.

The startup ecosystem fostered by Mylkcubator in its first two editions has collectively generated a value exceeding 100 million euros. These participating startups have also attracted over 12 million euros in investments since their inception, showcasing the program's success and the profound impact of collaboration between startups and the industry.

Another entity fostering open innovation in the sector is COVAP, an Agri-food Cooperative with a strong presence in the dairy, meat, and animal feed industries, encompassing all aspects of the supply chain: agriculture, animal feed, livestock, industry, and marketing. Highlighting their commitment to open innovation, they have launched GEN_, their open innovation program aimed at startups, enabling the cooperative to innovate from within by harnessing entrepreneurial talent. GEN_ addresses a range of strategic challenges currently faced by the cooperative, resolving them by combining the expertise of internal teams with external entrepreneurial talent. In its inaugural edition, the program has selected four Spanish technology and digital startups that offer solutions to the challenges of the agri-food chain in areas including Sustainability and Circular Economy, Consumer Relations, Agrotech Solutions, and New Products and Business Lines. These startups include Drops & Bubbles Technology, a project on the cultivation of microalgae for the removal of nutrients from wastewater, which enables the production of biogas and biofertilizers; Innogando, a smartwatch that enhances the profitability and control of extensive livestock farming, Cultiply, technology that reduces the cost of bacteria for silage by up to 80% while improving their quality, and Oscillum, a smart label that alerts about the quality, freshness, and safety of packaged and bulk foods. The four startups are now part of the GEN program, where they develop pilot projects within the ecosystem of the Livestock Cooperative of Valle de Los Pedroches, with the opportunity to win prizes of up to 10,000 euros.

Lastly, it's worth mentioning Areas, a global leader in managing restaurants and convenience stores at airports, train stations, and motorway travel plazas. Operating in 10 countries, Areas has launched its inaugural Startups Challenge, known as the "Areas for Change Challenge" in collaboration with Eatable Adventures. This initiative aimed to identify viable solutions to address the company's challenges for the upcoming years, as well as those of the Food & Agriculture, Beverage, and Travel Retail sectors. The focus was on three key categories: sustainability, gastronomy, and digitization. After a rigorous evaluation, only 9 outstanding startups were selected, and in the end, three winners were chosen, each representing a distinct category.

These winners include Flax&Kale, a Spanish company specializing in healthy, innovative, and sustainable food experiences; Alberts, a company that develops robotic solutions for fruit and vegetable shakes, smoothies, and creams; and Cupffee, a foodtech company that creates edible and biodegradable coffee cups that do not affect the taste of the drink.

Now, you can find these technologies and consumer packaged goods (CPGs) implemented throughout Areas installations worldwide, including Spain.

As the CPG and foodtech industry continues to evolve in response to changing consumer preferences, technological advancements, and environmental concerns, open innovation remains a driving force behind its growth and adaptation. By embracing open innovation strategies, CPG companies can tap into a vast reservoir of ideas and expertise, enabling them to create products that resonate with consumers, address sustainability challenges, and maintain a competitive edge in a dynamic market landscape.