PepsiCo is the latest food and beverage industry giant to launch its own incubator. “The Hive” will support small businesses looking to make headway in a variety of food and beverage verticals, likely developing companies that will fill PepsiCo’s own product gaps.
The term “incubator” may be synonymous with good will, but giving small companies a chance to succeed is smart business. Incubators are good for publicity and a way to align with critical issues like food sustainability, but they’re also another way to combat big food’s hemorrhaging market share.
While consumers still love the sugary drinks PepsiCo peddles, they also have a powerful craving for healthier foods and beverages.“The Hive” will offer a font of innovation in the health and specialty food space that’ll keep the food giant competitive. On the flip side of the coin, nurturing startups under their roof will allow PepsiCo to have a close eye on their investments, making sure incubator participants don’t flounder in the pressure cooker that is the food industry.
Indra Nooyi, PepsiCo’s U.S. CEO, said, “We want to create an environment where we have a business within a business, a small entrepreneurial, sort of agile, group that’s thinking about the new-age consumer that loves discovery brands, while allowing the big brands to thrive in the overall mothership.”
PepsiCo is no stranger to incubators. In May, PepsiCo leaders announced its partnership with a Chicago-based incubator “The Hatchery.” Additionally, the company has a similar incubator setup, Nutrition Greenhouse, in Europe.
Related reading: Big Food Investing in Food Startup Incubators