USA – PepsiCo Ventures, an investment arm looking to promote food and beverage startups that resonate with changing consumer tastes has said that it is eyeing partnerships with emerging brands that offer functional benefits to consumers.

Speaking at the Food and Beverage Innovation Forum in Hangzhou, China, the managing director of the company’s Ventures Group, Daniel Grubbs said that the group will focus on brands that offer consumers health benefits such as immunity or digestive wellness.  

According to a FoodBev report, the managing director stressed on the importance of innovation for startups, which would help food giants realize growth in line with prospects.

“Functionality is increasingly important in many markets as consumers look for more meaning from their food as well as their beverage,” he said.

“We increasingly are seeing this across a number of different countries.”

PepsiCo has identified that function, premium products and brands with long-term potential were key to future growth, even as cola sales slide due to preference for healthier beverages.

And PepsiCo is counting on innovation as it moves from its mainstream cola brands.

The company forayed into the ‘healthier’ space by buying a minority stake in sparkling probiotic drink maker KeVita in 2013 and later fully acquired it, adding it another brand that taps consumer interest in healthier beverages.

Last year, it acquired Health Warrior, a U.S.-based nutrition-forward company, betting on plant-based superfoods including nutrition bars and on-trend offerings.

“As consumer needs evolve and these new spaces develop in different countries, here in China as well as around the world, we’re focused on making sure that we’re staying up and close and connected and making sure that we’re capturing those growth opportunities with the brands that we have, but also realising and telling ourselves that we don’t have the right fit with the brand portfolio and how it can realistically capture that growth opportunity,” he said.

PepsiCo launched its Nutrition Greenhouse programme in 2017 with an aim to nurture emerging nutrition and wellness brands.

It is counting on this platform to focus on nutrition food and beverage products to support emerging brands.

“The spirit of Nutrition Greenhouse is to give back to these founders, and work and support and aid their development in the market,” said Grubbs.

“And in doing that, what we also want to do is help PepsiCo employees. We want to help infuse this entrepreneurial spirit in the culture of PepsiCo.”

The company recently named Hapi Drinks, an Austin, Texas-based company as the winner of its inaugural North American Nutrition Greenhouse program, securing US$100,000 grant.