Tyson Foods Inc., one of the world’s 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 Tyson’s Executive Vice President of Strategy and New Ventures, Monica McGurk, the fund will seek to invest in startups solving problems around food production, distribution, nutrition, food waste and safety.
The new venture arm will invest opportunistically in startups it is impressed by along these lines, and will not limit its deals to early-stage or mature companies only, nor to a particular product or technology-type.
That means Tyson could be investing in everything from new types of packaging that can give a chicken a longer shelf-life, to sensors, software or robotics that can reduce food waste in factories or at restaurants, or innovation that’s more around a great new food brand.
Perhaps surprisingly, Tyson is even interested in backing companies developing “alternative proteins,” as industry insiders call them, which are often vegetarian or vegan-friendly meat replacements.
Tyson already took a stake in Beyond Meat, which makes plant-based patties that aspire to have the same taste, juiciness and grill-ability of real beef burgers.
That deal and others like it have been seen as a sign of sea changes in the meat industry in response to consumers’ concerns about global environmental issues and health.
Oxford researchers published a study earlier this year that forecast, “A global 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.”
A Tyson spokesperson said, “Our interest in Beyond Meat reflects our 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 of Grubhub and home to other food-and-ag venture firms including S2G Ventures and Cultivian Sandbox Ventures.
Mary-Kay James will lead the investment team at the new fund. Prior to joining Tyson, James was the Managing Director of Agriculture, Nutrition & Health investments for DuPont Ventures, and Chairwoman of the NVCA Corporate Venture Group.
McGurk said that one reason Tyson decided to break off a serious chunk of capital to back startups was that consumer goods are an area lacking attention from corporate VCs.
Plenty of money from private equity and venture capital funds has flowed to food, she noted.
And other food giants including Campbell Soup’s Acre Venture Partners or Kellog’s Eighteen94 Capital have started venture investing, but are doing in partnership with outisde venture capitalists, rather than building their funds completely in-house.
“We have the ability to finance entrepreneurs and give them oxygen, but we have capabilities to help accelerate their growth and improve the odds of success for them,” McGurk said.
Specifically, the new fund plans to help its portfolio companies, or other startups it is evaluating for investment, to connect with experts in various departments of Tyson Foods for everything from research and product testing to business development.
A startup working on technology to help restaurants reduce food waste may find it easy to meet one or two restaurateurs and test out new technology on a limited basis. But McGurk said, “It can be hard to make a technical 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 of consumer insights on food preferences and what’s driving growth in food.
Updates: We added a comment to this post from a Tyson spokesperson to clarify the rationale behind the company’s investment in Beyond Meat, a company developing vegetarian products that feel and taste like beef.