31 Oct 2024 ‘Innovation is a journey…’ Mondelez VP Dr Ian Noble on crossing the valley of death with startups

How should big food companies work with startups to accelerate the innovation process and where do corporate venture funds and accelerators fit in?….

The key is understanding the strengths and weaknesses of large and small companies, and coming up with models that create a win-win for both parties, says Dr Ian Noble, VP R&D at snacks and confectionery giant Mondelēz International, which recently unveiled the 10 startups participating in its 2024 CoLab Tech accelerator program.

How should big food companies work with startups to accelerate the innovation process and where do corporate venture funds and accelerators fit in? Are legacy ‘Big Food’ companies increasingly becoming scale up platforms for smaller, more agile companies’ innovations, or can they still come up with disruptive ideas in house?

But it’s easier said than done, he admits, acknowledging that Mondelēz’s initial plan for its SnackFutures business has evolved over the years from a venturing and innovation hub that would also incubate novel products in house (Dirt Kitchen, CaPao, Ruckus & Co, Millie Gram, and NoCoé – which have all been quietly phased out) to a more traditional corporate venture fund: SnackFutures Ventures.

‘If I commit five people to this [tiny novel brand], would I get a better return if I committed them to Cadbury?’

Dr Ian Noble

Initially, SnackFutures was “building ideas, building new possibilities [with a dedicated team in-house],” says Noble. “But the pathway to getting those to scale takes time, and that remains a challenge because you’re committing resources. And that’s always the tension. If I commit five people to this, would I get a better return if I committed them to [a multinational, multi-billion dollar brand also in the Mondelēz portfolio such as] Cadbury?”

“We did some very, very cool stuff in house with SnackFutures, but the way I see it now is we’re looking very much at that middle ground space where companies know they’ve got something that’s working and can scale, and then it’s a case of how do we [at Mondelez] help them transition to that next level? How do we bring our expertise, our capability, to help them accelerate their business, but also understand their business and see the possibilities?

“And then ultimately, if that leads to a potential M&A, that’s great, but if it doesn’t, ultimately, it’s about us being an active player in the ecosystem, seeing what’s out there.”

‘Disruptive’ innovation: ‘Everyone remembers the successful startups, not the thousands that failed’

At base, says Noble, who honed his skills at Unilever and PepsiCo before moving to Mondelez in 2016, large consumer packaged goods (CPG) companies and startups have fundamentally different priorities and responsibilities.

“As a [multi-billion dollar food business], you’ve got a business and brands that are already performing. You’re looking to polish, improve, tighten, sharpen, and if you bring them [big and small companies] together in the wrong way, the bigger one tends to kill the smaller ones.”

And while “disruptive” innovation sounds sexier than nurturing established brands, it should be placed in context, he says.

“Everyone remembers the successful startups, not the thousands that failed, and if you invest in them or acquire them, you need to treat them as distinct from the mothership. And then it’s a question of phasing and timing [as the relationship between the two gets closer so the smaller company is not crushed under the corporate umbrella.

“The behaviours that keep an FMCG company rolling at 3-5% or whatever percent growth, are a very different set of skills that keep a startup moving from the first sale to the first million to the first 10 million.”

Big brands are capable of coming up with big innovations, he says, “Look at [innovations developed in-house by big brands] such as Nespresso (from Nestlé) and probiotic mini-drinks (from Danone). But is it their number one role? I don’t think it is. I think the big companies have a duty to care for and nourish, maintain, and sustain their brands.”

Stepping back, he says, “We also need to shift how innovation is defined. It’s not just about products. It’s about distribution, business models, technologies to deliver better consumer experiences.”

A lot of the innovation that goes into creating and distributing huge legacy brands is not necessarily consumer facing, meanwhile, but “enables the lowest cost food that we have today, the most accessible food, the safest food,” he points out. “It’s not sexy, but it’s what matters.”…..

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