Nestlé chief on the secret to successful start-up partnerships: "We're clear about what a win looks like on both sides"
Nestlé, the biggest food company in the world according to 2017’s Forbes Global 2000 list, doesn’t actively search for start-ups. Through its global open innovation programme HENRi, it lets them come to it.
The Vevey-headquartered company starts by identifying a challenge that it faces as a corporation and then develops a brief, which it publishes on the HENRi website.
Start-ups complete a submission on the HENRi website and once the period is up, it selects one successful candidate to follow the ‘partner-pilot-proof-of-concept’ process. Each brief comes with $50,000 in funding.
Global innovation director at Nestlé and founder and chief of the company’s start-up scheme, HENRi, Gerardo Mazzeo told FoodNavigator: “By being clear about what a win looks like on both sides, we make sure that we and our partners have all the necessary factors for real, innovative success in place.”
The Swiss food manufacturer is currently in the ‘partner-pilot-proof-of-concept’ stage with the first round of start-ups from HENRi and four other projects are currently live - i.e. looking for start-ups.
David versus Goliath?
One of the big concerns a start-up may have when working with a corporate is being ‘swallowed up’ in a David and Goliath situation. It's therefore important to work on “a case-by-case basis with start-ups”, Mazzeo said.
“We fully appreciate that sometimes it is about their core intellectual property, and we are very mindful of that. Rather than a one-size-fits-all approach, we consider various options such as licensing, purchasing their products, or have them develop a bespoke solution.
“The important thing is that it's a peer-to-peer relationship," he added. "In our experience, the winning formula has been when everybody understands the agreement and feels confident and comfortable with the terms.”
Connected farms
The first HENRi project to come to life was Nestlé's Connected Farms project, for which it partnered with US start-up Kakaxi. The tech firm develops social networking services that it says connect farmers and consumers.
After a 2015 Kickstarter campaign, which raised over $34,000, the firm partnered with Nestlé to show the public how some of the coffee used in Nespresso pods is sourced, using livestreamed videos and images from the farms in Colombia.
“Customers are very concerned now with where their food and drinks come from and that the supply chain is responsible," Mazzeo said. "We wanted to build that awareness and develop that direct connection and working with Kakaxi and also IPG Media Labs because of HENRi, we were able to do something really unique and innovative.”
Connected Farms went live in 2017 and its success inspired Nestlé to launch a call for proposals for a similar project, this time on the cocoa used in KitKats.
Waste and sustainability
The firm has earmarked sustainable packaging and smarter, less wasteful supply chains as key areas of interest for future development.
Nestlé has been using data analysis to make its processes more efficient, for instance, Mazzeo said, but there is always room for improvement.
"It's not easy to change an industry overnight. For Nestle, we are certainly moving in the right direction and testing complementary packaging to make a difference. But it's the system as a whole that we have to look at.
“Manufacturers need to realise waste’s potential as a valuable commodity, be it in recycling or energy generation," he said. "Regulation is important in developing consensus on responsibility mandates and policies that ensure an analogous approach can be followed and regulated effectively.
“The notion that the goods of today need to be seen as the raw materials of tomorrow is what will propel the industry into this new era."
One of the four HENRi projects currently live is about making baby food pouches more sustainable. Plastic food pouches may be lighter than glass jars making them more eco-friendly to transport in terms of fuel efficiency, but the synthetic packaging takes up to 1000 years to decompose.
The pitch is quite open, leaving room for different possible approaches.
“The solution could be anything from a biodegradable material to a way to further improve efficiency in the supply chain, or even an enabler of behavioural change,” it reads. "But it should offer a tangible sustainability gain, without compromising the nutritional quality or freshness of the food."
