Philipp Schrempp (left), Tobias SchuÌle (right), the founders of Foodspring.
There are collagen shots on store shelves now, just a few feet away from probiotic protein bars and iced teas infused with CBD. The wellness movement has led to more so-called functional ingredients being added into packaged food at a rate like never before. Publicly traded food companies from Mondelez to the Campbell Soup Co. have already invested in some of these startups. And now, Mars Inc., the $35 billion maker of M&M’s, Iams pet food and Uncle Ben’s rice, will carve out its own niche as well.
For the past two years, Mars has been quietly building its own dedicated health foods division, called Mars Edge, which announced its first investment on Thursday. The privately held, family-owned company acquired a majority stake in Foodspring, a direct-to-consumer sports nutrition startup based in Berlin. Mars declined to provide the financial terms, but says Foodspring is now “one of the largest and fastest-growing targeted nutrition businesses in Europe.” Its line of protein shakes, supplements, bars and porridge are currently sold in 12 countries.
“We’re moving from one-size-fits-all food to what’s right for me,” says Jean-Christophe Flatin, Mars Edge’s president. “We’re building a global, targeted nutrition business that will allow us to pioneer the personalized nutrition territory. We are quite confident we have found the right partners.”
The potential global personalized nutrition market is large and fast-growing: estimated at $25 billion in 2017 and expected to grow more than 9% each year until 2025, according to Grand View Research.
Founded in 2013 by former Rocket Internet executives Tobias Schüle and Philipp Schrempp, Foodspring will continue to be run by its founders from Germany. Says CEO Schüle: “Over the past six years, we have built Foodspring from the ground up. For the next step, we were looking for a partner who shared our vision, and with whom we could see ourselves realize our ambitions.”
When the deal closes, likely in several months, Mars will have bought out Foodspring’s other venture capital investors, which gave a reported $34 million over two rounds, according to Pitchbook. Only the founders’ stakes remain.
This is the next step for Mars Edge, which for the past two years has been testing some more nutritious products, like Gomo, an ingredient developed by Mars that contains 6 grams of protein, as well as iron, vitamin A, vitamin B12, vitamin C and vitamin D per serving—the necessary nutrients for children ages 6 to 18. It’s now used in a chiplike snack, called Dal Crunchies in India, and was developed with one of the world’s leading philanthropic organizations, the Tata Trust. Similarly, 20 years of Mars’ own research on cocoa flavanols has been used to create a nutritional supplement, CocoaVia, which bills itself as “evidence-based products that support healthy blood flow.”
“We want to play a role in better lives through targeted nutrition,” says Flatin. “We drew a line in the sand. We want to create for the long-term.”