Food Giant Product Managers Place Small Bets [The Accidental Product Manager]

General Mills product managers are looking for new product ideas at startups
Image Credit: Mike Mozart

There are exciting product manager jobs and then there are the product manager jobs at the really big food companies. Yes, yes – the good news is that you’ll probably be a relatively successful product manager no matter what you do simply because the big food companies provide us with the products that we all know and love. However, because of the sameness of the job, there is a good chance that this will not be the most exciting product manager job out there. However, lately things have been changing and this job is starting to become a lot more cutting edge…

Venture Capital Investing By Big Food Companies

Things have started to change at the big food companies. These big firms are starting to experience competitive market pressures that they have never experienced before. The tastes of their traditional customers are starting to change. At the same time the market is now being flooded with challenger brands. E-commerce growth is starting to make it easier for the challenger brands to find their way directly into customer homes. The result of all of this competition is that the product development definition is starting to change and product managers are now being given the green light to invest in start up food companies. No, every investment has not been a success; however, product manager are starting to realize that when an investment is paired with a company’s core strength it can be an effective tool for the firm to stay on top of fast moving market trends.

This investment in growing companies is a new thing. In the past, the large food companies have often purchased emerging food companies only after they have reached a certain size. The problem with this approach is that it is starting to show diminishing returns. Additionally, there have been some very public flops in which food companies have been bought for top dollar only to fail later on. The venture capital investments that firms are now making are a form of experimentation. What the established firms are trying to do is to find a low-risk way to go about seeding growth potential over the long term. If the big food product managers can do this correctly, then they’ll have something else to add to their product manager resume.

A great example of a big food company that is making investments in smaller startup food companies is General Mills. Among other investments that they have made has been an investment in a company called Beyond Meat which is a company that produces a plant based meat substitute. General Mills has also taken the internal department that has been the innovation center in the company and has turned it into a full-fledged venture capital operation. The goal of this part of the company is to not only make investments in young companies but also to lend assistance in the form of marketing, logistics, and packaging.

The Promise Of Small Food Companies

It turns out that investing in startup food companies can bring big benefits to larger food companies. These benefits can be realized even if the bigger companies don’t end up buying the smaller firms. Clearly one benefit can be if the smaller firms start to make money. However, in addition to that, the start up food companies can teach the more established firms about new trends in their markets and allow the established firms to observe how entrepreneurs do well in areas like social media marketing.

General Mills has had the most success with its investments in startup food companies. General Mills has been investing in companies that operate in categories that it knows well. These include yogurt and snacks. Its approach to investing in what it knows best has allowed it to position itself to work closely with the companies that it has invested in to help them to grow. As an example of this was a yogurt company which General Mills helped to introduce new yogurt tubes designed for children.

In order to create the new yogurt tubes, the startup allowed their manufacturing facility to be overtaken by General Mills professionals who came in and helped to set up the company’s machinery for creating the yogurt tubes. Currently entrepreneurs are not lacking for sources of funding such as private-equity and venture capital funding. What this means is that when firms like General Mills are able to lend their expertise to a startup firm it can help investors to land a deal. The founders of the startup firms are starting to have higher and higher expectations and so investment firms have to be willing to show up with more than just a check.

What All Of This Means For You

Product managers at big food companies have had a pretty easy life. However, new competition in their markets coupled with changes in their consumer’s eating habits has resulted in the need for them to change their product manager job description and do more in order to be successful. What they have started to do is to make investments in startup food companies in order to find a way to stay on top of fast moving food trends.

Startup firms are starting to find ways to make it onto the tables of established firm’s customer’s tables. Large firms realize that when they invest in a startup food company, not all of their investments are going to be a success. Food companies used to only invest in new firms once they had reached a certain size. However, firms have become so expensive that investing in growing firms has become the new norm. General Mills has been making investments in growing firms. They have also created a new part of the company to make these types of investments. Investing in the smaller firms can bring many advantages to bigger firms including new ways of looking at their markets. General Mills has had a lot of success in investing in firms that work in markets that it is already in. Startup firms are looking for investors who are well positioned to help them to keep growing.

Traditionally being a product manager at a large food company was a pretty cushy job. That has all changed as customers and the market have both changed. Now large food company product managers have to go looking for small startup food companies to invest in so that they can stay on top of changing markets. This technique seems to be working. Now the trick will be finding the right companies and getting them to agree to an investment that will benefit both sides of the deal.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills

Question For You: What should the big food companies be looking for when they want to invest in a startup food company?

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What We’ll Be Talking About Next Time

When it comes time to ship a product to a customer, product managers in the U.S. know that they have three different options: the Postal Service, FedEx, and UPS. FedEx and UPS generally cost more, but they are fiercely competitive and if you hand your package off to them, you know that it will reach where it is supposed to go. However, it turns out that UPS has been running into some problems and their product managers are going to have to get creative to solve them.

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