23 Apr 2019 --- US food and beverage company Mondelēz International has made a minority investment in Hu – as in “Human” – Master Holdings, the parent company of both Hu Products and Hu Kitchen, a US-based snacking company offering minimally processed snacks. The investment is part of the Mondelēz SnackFutures venture initiative.

“The Hu brand sits at the convergence of key growing consumer trends. Building on its initial success in chocolate, we believe there’s an exciting opportunity to continue expanding the Hu proposition into a broad health-focused snacking platform across categories,” says Tim Cofer, Executive Vice President and Chief Growth Officer of Mondelēz International. “With an in-house test kitchen and insights lab, they have a unique ability to quickly test and learn.” 

"We can’t disclose financial details of this particular investment. What we can say is that we target SnackFutures to contribute US$100 million to revenue growth by 2022. That is complementary to our broader innovation work as part of our new growth strategy," Valérie Moens, Associate Director, Corporate External Communications, Mondelēz International tells FoodIngredientsFirst.

SnackFutures is Mondelēz’s innovation and venture hub which seeks to uncover snacking growth opportunities around the world. This investment falls into two of SnackFutures’ high-growth strategic priorities: well-being and premium. The program is supported by a global ecosystem of internal experts and external partners. SnackFutures employs three core principles of growth to accelerate innovation, including the invention of new brands and businesses, the reinvention of small-scale brands with large-scale potential and venture investments with start-up entrepreneurs.

According to Innova Market Insights, snacking is a central focus of innovation across all food and beverage categories, with 10 percent average annual growth of global launches with a snacking claim over the past five years (CAGR, 2013-2017). Three square meals are no longer the mantra either – a fourth, fifth or even sixth meal culture is emerging. 

“We chose Mondelēz International as a minority investor because we believe their resources, strengths and progressive vision of SnackFutures can help us accelerate positive change within snacking. This partnership should allow the Hu platform to grow and reach more people in a better and broader way than on our own,” explains Jason H. Karp, Chairman and Co-Founder of Hu.

“As a global snacking business, we’re on a mission to lead the future of snacking and push the boundaries of what’s possible. Investing in Hu offers our company an opportunity to do exactly that,” adds Cofer.

Research has shown that Millennials are more likely to snack four times a day than any other generation. Targeting this demographic is now very well established and widely utilized as a marketing tool. It is clear that many of the trends that influence Millennials are also influencing other generations, as well as society as a whole. Their love of innovation is a key factor that aids product development and marketing. 

Innova Market Insights reports that 63 percent of Millennials are replacing meals with snacks because they are busy (Consumer Lifestyle and Attitudes Survey, 2018). But it is not only about addressing this demographic. With 50 percent of Gen X’ers “inclined to cut down on their sugar consumption” and 67 percent of boomers “making changes to their diet to become healthier,” you could argue that there are numerous product development avenues to follow for healthier snacking.

Founded in 2012, Hu began as Hu Kitchen in New York City, a kitchen and market focused on paleo-inspired foods. The Hu Kitchen market section quickly became a proof-of-concept Consumer packaged goods (CPG) testing ground, prompting the company to expand its vegan and paleo-friendly chocolate products portfolio. 

“Hu is our passion and we’re happy to fuel its growth with Mondelēz International as our partner. Our perpetual goal is to marry great taste with no weird ingredients and we’re big believers that using these simpler ingredients can make people feel and perform better than they thought possible. Our new partnership will help us advance this ‘Get Back To Human’ concept to a global audience,” Hu Co-founder Jordan Brown adds.

The company is interested at investing in three high-growth areas: well-being snacks, premium snacks and digital snack platforms. “In addition to HU, we also announced a minority investment in Uplift Food, a US-based start-up that focuses on prebiotic functional foods in the area of gut health. Through this investment, we are looking to disrupt the functional food category by delivering ‘snackable’ products focusing on gut health – something that does not exist today. And we also announced a partnership with the Hatchery Chicago, a non-profit food business incubator, which will help us connect with the local food and beverage start-up community and work together to accelerate and scale innovation,” Moens says.

Mondelēz is expanding its reach with continuous investment and acquisitions. Earlier this month, FoodIngredientsFirst reported that Mondelēz was in advanced talks to buy the international brands of US food company Campbell Soup Co. 

Mondelēz is negotiating final terms of purchase of Campbell Soup Co., which includes Australian cookie brand Arnott’s and Danish baked snacks maker Kelsen Group, according to a Bloomberg report, citing people familiar with the matter. According to the report, Campbell’s and Mondelēz had been discussing a sales price of around US$2.5 billion for the assets. However, no final accord had been reached and talks could have been torn apart, as other potential buyers had already been in query.

Mondelēz, Nutella maker Ferrero SpA and a consortium comprising private equity firms KKR & Co and Bain Capital LP were among the bidders for Campbell’s international business, according to a Reuters report earlier this month.

By Kristiana Lalou