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Industry Contributor 7 Jul 2019 - 2 min read

Mars Petcare invests in 20 start-ups in bid to crack DTC

By Paul McIntyre - Executive Editor

Mars Petcare, the $18bn revenue unit of the global CPG giant, is acting as a venture capital firm in a bid to earn a slice of the burgeoning direct-to-consumer pet care market (Digiday).

 

Key points:

  • Mars Petcare has $100m set aside to invest in direct-to-consumer brands
  • So far the ‘Companion Fund’ has invested in 20 start-ups out of 1,800 considered
  • Digitalis Ventures manages fund day-to-day
  • There’s a lot we can learn from those [DTC] businesses when it comes to the proximity they have to people,” - Leonid Sudakov, Mars Petcare president of connected solutions

For CPG, DTC is all about the data and the direct connection with buyers, something they do not have while retailers remain the intermediary. Mars has significantly scaled its data expertise in recent years in parallel with its mission to incubate start-ups.

Leonid Sudakov, the company’s former global CMO took the lead role of its Connected Solutions division in 2016, and has built it from “two-and-a-half people” to a team of 200, focused on finding, partnering and growing start-ups, per The Drum. Sudakov believes DTC – and partnering with start-ups in general - is also the future of CPG. “The traditional [FMCG] view of creating a walled garden of solutions, own it and protect it doesn’t work. For us it’s so fundamental for us to recognise that we won’t own every startup in this area,” he tells The Drum. “Instead we want to benefit from being part of an ecosystem that includes them because that’s going to allow us to continue to be relevant, versus taking the old-fashioned approach of building everything from the inside.”

As an interesting aside, McDonald’s UK & Ireland new CMO, Gareth Helm, helped steer tailored DTC dog food company tails.com from start-up to Nestlé sale, joining the brand in 2015 as non-executive director three years after leaving Mars Petcare, where he was UK marketing director. That deal completed in April 2018, a few weeks after Mars launched its $100m fund. 

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Paul McIntyre

Executive Editor

Market Voice

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