Tyson Launches Venture-Capital Fund

Tyson Foods Inc. is launching a venture-capital fund to invest in high-tech products and services that could help refresh its stable of products, which include chicken, hot dogs and hamburgers.

The Springdale, Ark., meat giant hopes the $150 million fund, which started on Monday, will pick successful startups from among a crowd of companies experimenting with packaging, laboratory-developed meat and other innovations.

Other food and agricultural conglomerates such as General Mills Inc., Coca-Cola Co. and Campbell Soup Co. have launched venture-capital efforts in recent years, jockeying for position against Silicon Valley firms including Kleiner Perkins Caufield & Byers and Khosla Ventures.

Venture-capital investments in food and agriculture have more than tripled during the last five years to $647 million in 2015, according to Dow Jones VentureSource. In the first three quarters of this year, venture-capital firms invested an additional $420 million.

Developing new and more-profitable products has become increasingly important to Tyson, a $20 billion company that estimates it produces 1 in 5 pounds of U.S. chicken, beef and pork. Tyson in 2014 spent $7.7 billion to buy Hillshire Brands, the maker of Jimmy Dean sausages and Ball Park hot dogs, to expand its brand portfolio and evolve beyond its roots as a commodity meat processor.

Among other things, the fund will evaluate alternative sources of protein, including companies developing plant-based meat alternatives, meat grown from self-reproducing animal cells, 3D-printed meat or insect-based protein products. The vehicle will hold Tyson's 5% stake in Beyond Meat, announced in October.

"We look at [meat alternatives] as an 'and,' not an 'or,' " compared with Tyson's conventional meat business, said Monica McGurk, Tyson's head of strategy.

Tyson also is interested in innovations to minimize food waste, such as packaging that allows food to stay fresh longer, and marketing platforms that help restaurants sell food that otherwise would be thrown out, she said.

Some of the investments could turn into acquisitions, Ms. McGurk noted. Biotech seed developer Monsanto Co. last month acquired a European farm-data company, following an earlier investment by the biotech seed developer's venture unit.

(END) Dow Jones Newswires

December 05, 2016 17:35 ET (22:35 GMT)

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