Tyson Foods Inc., one of the worlds largest makers and marketers of meat products, has announced the formation of a $150 million venture capital fund to back food and agriculture startups.
According to TysonsExecutive Vice President of Strategy and New Ventures, Monica McGurk, the fund will seek to invest in startupssolving problems around food production, distribution, nutrition, food wasteandsafety.
The new venture arm will invest opportunistically in startups it is impressed by along these lines, and will not limitits deals to early-stage or mature companies only, nor to aparticular product or technology-type.
That meansTyson could beinvesting in everything fromnew types ofpackaging that can givea chicken a longer shelf-life, to sensors, software or robotics that can reduce food waste in factories or at restaurants, or innovation thats more around a great new foodbrand.
Perhaps surprisingly, Tyson is even interested in backingcompanies developingalternative proteins, as industry insiders call them,which are often vegetarian or vegan-friendly meat replacements.
Tyson already took a stakeinBeyond Meat, which makesplant-based patties that aspire to have the same taste, juiciness and grill-abilityof real beef burgers.
That deal and others like ithave beenseen as a sign of sea changes in the meat industry in response to consumers concerns about global environmental issues and health.
Oxford researcherspublished a study earlier this year that forecast,Aglobal switch to diets that rely less on meat and more on fruit and vegetables could save up to 8 million lives by 2050, reduce greenhouse gas emissions by two thirds, and lead to healthcare-related savings and avoided climate damages of $1.5 trillion.
ATyson spokesperson said, Our interest in Beyond Meat reflectsour desire to offer consumers choices and to consider how we can serve an ever-growing and diverse global population, while remaining focused on our core prepared foods and animal protein businesses.
While Tyson is based in Springdale, Arkansas its new fund, Tyson New Ventures LLC, will be headquartered in Chicago, a hotbed of activity for food tech startups since the rise ofGrubhub and home to other food-and-ag venture firmsincluding S2G Ventures and Cultivian Sandbox Ventures.
Mary-Kay James will lead the investment team at the new fund. Prior to joining Tyson,James was theManaging Director of Agriculture, Nutrition & Health investments for DuPontVentures, and Chairwoman of the NVCA CorporateVentureGroup.
McGurk said that one reason Tyson decided to break off a serious chunk of capital to back startupswas that consumer goods areanarea lacking attention from corporateVCs.
Plenty of money from private equity and venture capital funds has flowed to food, she noted.
And other food giants including Campbell Soups Acre Venture Partners or Kellogs Eighteen94 Capital have started venture investing, but are doing in partnership withoutisde venture capitalists,rather than building theirfunds completely in-house.
We have the ability to finance entrepreneurs and give them oxygen, but we have capabilities to helpaccelerate their growth and improve the odds of success for them, McGurk said.
Specifically, the new fundplans tohelp its portfolio companies, or other startupsit is evaluating for investment, to connect with experts in various departments of Tyson Foods for everything fromresearchand product testing to business development.
Astartup working ontechnology tohelprestaurants reduce food waste may find it easy to meet one or two restaurateurs and test out newtechnology on a limited basis.But McGurk said, It can be hard to make atechnical solution work in a real operating environment at scale, especially if you have never been in the food service industry.
Tyson has connections to thousands of restaurants, food retailers and farms that raise chickens and other livestock for it.
And the company runs a massive chill chain, and food distribution system,not to mention culinary test kitchens,and teams that build huge data banks ofconsumer insights onfood preferences and whats driving growth in food.
Updates: We added a comment to this post from aTyson spokesperson to clarify the rationale behind the companys investment in Beyond Meat, a company developingvegetarian products that feel and taste like beef.