PepsiCo Announces Incubator Program “The Hive”
PepsiCo CEO Indra Nooyi announced during the Q&A portion of the company’s second quarter earnings call with investors that the food and beverage conglomerate is launching “The Hive,” a new North American incubator program that will focus on emerging brands. Following the July 10 call, FoodDive took a deeper look at what the program could mean for the company, noting that PepsiCo has “little to risk and a lot to gain” with the venture.
“PepsiCo’s decision to enter the incubator space signals that small, nimble food startups have made inroads into interesting, unique and healthy products that food and beverage companies need more of in the face of growing competition and slumping sales,” FoodDive reporter Jessi Devenyns wrote, noting that companies like Kraft Heinz, Kellogg, Campbell Soup, Nestle, and Conagra have all launched their own incubator programs in recent years.
Last year, PepsiCo invested in Chicago-based incubator Hatchery, Devenyns wrote, giving the company access to emerging snack brands. The move may also benefit PepsiCo’s goal of growing revenues for its better-for-you product portfolio.
While The Hive will be a change of pace for PepsiCo’s approach to startup brands in North America, it has utilized other incubator programs in Europe, like Greenhouse, which recently announced its first class of entrepreneurs.
“It’s going to be an entrepreneurial group that’s going to take some of the best new products that we launched and reached a certain size … in whatever distribution system they think is the best for it and when it reaches a certain size, we can decide whether it should come into the DSD system or not,” Nooyi said on the call.
Soda Taxes Upheld in Philadelphia, But Unlikely to Spread in Penn.
Supporters of Philadelphia’s soda tax claimed a victory last week when the Pennsylvania Supreme Court ruled 4-2 that the surcharge is on distributors, not consumers, and therefore does not violate double taxation laws, according to Philadelphia Magazine.
While the decision is a blow for the beverage industry, there may not be much to fear in the tax spreading within the state. According to the Pittsburgh Post-Gazette, Philadelphia is the only first-class city in the state, and has broader ability to impose taxes than other communities such as Pittsburgh, which would require authorization from the state General Assembly.
“[A soda tax] would have to be for a specific use,” Pittsburgh Mayor Bill Peduto told the Post-Gazette. “Right now, our revenues are strong. We’ve been able to have a fund balance every year for the past five years.”
Starbucks and McDonald’s to Collaborate on Sustainability
Starbucks made headlines this month when the company announced plans to phase out plastic straws from its stores in an effort to reduce waste and promote environmental sustainability. Now, McDonald’s is joining with the coffee chain to develop cups that are recyclable, compostable, and can be mass produced.
According to CNBC, McDonald’s announced on July 17 it would join with Starbucks and Closed Loop Partners on the project. Starbucks and Closed Loop had begun work on developing a new cup in March with the launch of the NextGen Cup Consortium and Challenge, which will begin in full in September. McDonald’s is committing $5 million to the partnership.
“McDonald’s is committed to using our scale for good to make positive changes that impact our planet and the communities we serve,” Marion Gross, senior vice president and chief supply chain officer at McDonald’s USA, said in a statement.