What is “front-end innovation” and how is it structured at global flavors and fragrances giant Givaudan?
“Our teams can [assess] one [startup] here and another there, but the 1,000 companies we see every year, it’s more coming from accelerators, VC investors and other scouters that are out there looking for our needs,” says Alexandre Bastos, head of front end innovation, ventures, and competitive intelligence at the Switzerland-based firm.
“From the beginning, we said OK, there are people that are already looking at startups, so we should partner with them,” says Bastos (AB), who caught up with AgFunderNews (AFN) at the recent MISTA growth hack in San Francisco, which brought together startups and corporates to develop new on-trend product prototypes.
“They should be our antennas around the world.”
Once potential collaborations emerge, he says, establishing at the outset what both parties seek to get from the partnership is critical. “It’s always our first question to startups: what are you looking for and how can we help?
“For instance, if the company is saying Alex, I love you, you guys know a lot, you have a lot of capabilities, lot of scientists… but essentially, I need cash, we’ll probably say, OK, maybe we are not the best partners for you right now.”
AFN: What do you mean by front-end innovation and how do you find potential external collaborators?
AB: It is all about the front end part of the innovation funnel. It’s really when ideas are emerging at the very early stage. So we started this at Givaudan to be more like explorers. We were doing back end innovation, the typical R&D, but then we said OK, we’ve got to go a little bit up in that funnel and look for more ideas.
From the beginning, we said there are people that are already looking at startups, so we should partner with them. They should be our antennas around the world. We make sure that they understand what we are looking for, and they give us the deal flow.
Once we get this great deal flow, we take them, assess them, do the due diligence, and then bring them through the organization. So essentially, there is the find, which is not done by us necessarily.
AFN: What are you looking for?
AB: Essentially, we are looking for technology in our space. We do innovation, we do R&D, we invest nearly half a billion in innovation every year as a company for both divisions [taste and wellbeing, fragrance and beauty]. But we understand that there are great innovators out there. So of course, we can create our own IP, but if someone is already building that IP outside, we say how can we nurture, accelerate, scale, and bring that to market?
So our number one is looking at technology and joint development agreements and then we provide our infrastructure to bring that to market.
We are looking for ingredient technologies and enabling technologies. So let’s say the next generation of taste solutions… maybe there is someone doing amazing umami solutions, or technology that can reduce sugar in application, that’s ingredient technology. Enabling technology is more like concentration, extraction, new technologies to make ingredients that will help us to save cost, get better performance and so on.
So for example we know a lot about delivery systems and encapsulation technologies. We are here now at the MISTA growth hack on healthy nutrition, and one of the key questions is how do you deliver that nutrition in an application, because maybe [the ingredient/nutrient] is not heat resistant or pH resistant, or it doesn’t [get] delivered to the right part in your body.
Other things [we are interested in] are the next generation of drying technologies.
AFN: Does Givaudan invest directly in startups?
AB: Our formal approach to investment is through funds, so we are part of five VC funds. They do the investment, we can also participate and see what they are bringing to us. Do we invest directly? Yes, but that’s more the exception than the rule.
AFN: What have you learned about how best to structure collaborations so there’s a win for both parties?
AB: It’s always our first question, asking startups what are they looking for and how can we help? For instance, if the company says Alex, I love you, you guys know a lot, you have a lot of capabilities, lot of scientists… but essentially, I need cash, we probably say, OK, maybe we are not the best partners for you right now.
So essentially, it’s really saying, like, where can we contribute to their journey? And then, of course, looking at the technology, how can they contribute to our journey? And then we put that into the joint development agreement. OK, this is what we bring, this is what the startup brings. And then everybody’s clear on how we can accelerate [innovation].
It’s all about trading capabilities, knowledge, insights and scale up on our end for access to their IP.
AFN: What’s the value to Givaudan in taking part in MISTA events?
AB: It’s like we are not doing this alone. We are looking at how a technology could be integrated into the value chain, because [at MISTA events] I have the fat company, I have the extrusion company, I have the [CPG] brand, and I’m looking all different aspects, so that’s one thing that we really like.
So we kind of take the one-on-one assessment, and we bring it here and we have more wisdom, more ideas, more insights on how to look into that technology not only from a taste perspective, but in a more integrated way. And of course, when you have more people, more minds [working on a problem], the output is much, much better.
AFN: There are a few players here in precision fermentation. Where does it make the most sense?
AB: I think fermentation is a technology that can scale. But the question is what is the right product to break through the market? I think that The Every Company [a startup making egg proteins via precision fermentation that participated in the latest MISTA growth hack] is one example. They have a good value proposition. They still have a lot to do in terms of cost and penetrating the market, but I think when you go more into the specialties, you can break through and bring precision fermentation to play more into food ingredients.
AFN: Is the whole GLP-1 space something that Givaudan is looking at?
AB: It’s still like a very emerging space, right? So here I speak more for myself, but I think there’s a lot to learn. There is this whole thing about natural solutions [that could activate GLP-1 receptors or stimulate the exogenous production of GLP-1], right? So we see a lot of startups and we are curious to see how that goes. But it all goes back to the science, right? What can be backed by data? It all goes back to clinical and there, we don’t see a lot [of evidence].
Further reading:
🎥Collaborate or die: Hacking the next generation of healthy foods at MISTA
Get a flavor of the latest MISTA growth hack in San Francisco below:
