Children's health and food

Creating a venture fund for healthy food start-ups

We're partnering to give financial backing and advice to start-ups creating healthier, affordable food for families.

Key partnership information

Partner: Ascension Ventures, Big Society Capital and Mission Ventures

Funding amount: £2.2 million including £1.5 million of investment funds

Duration: March 2020 – September 2021

Programme: Children’s health and food

What we’re doing together

Good Food Fund is a new business accelerator and venture fund backing healthier food and drink brands to help tackle childhood obesity. The prototype fund will provide business support and allocate finances to start-ups and small and medium-sized enterprises (SMEs) committed to bringing healthier children’s brands to market and making healthier food products available to families on lower incomes.

This project is the culmination of a two-year partnership with the UK’s leading social impact investor, Big Society Capital. The business accelerator will be run by Mission Ventures and the Venture Capital Fund will be managed by Ascension Ventures.

After-school snacking for children will be a key focus, but we will also look for opportunities to market healthier drinks, ready meals and frozen food, fast food and takeaway, and school catering. Snacking brands will be supported to market to families in Lambeth and Southwark, testing demand for the products at an affordable and sustainable price.

If this pilot is successful, we aim to establish a multi-million pound fund providing brands with investment, market expertise, route to market support, and access to place-based infrastructure such as shared kitchen space.

Timings are subject to change depending on what adjustments are required in response to COVID-19. The first round of challenger brands have been selected.

We are excited as partners by this opportunity to drive change from the bottom up, forcing Big Food to compete with those rising challengers who are eating into their market share with healthier options.

Paddy Willis CEO, Mission Ventures

Aims of the partnership

Project outcomes are being measured by an external evaluation partner, to capture data from all stakeholders and gauge how viable supported brands are long term. We are using both quantitative consumer and sales data, as well as qualitative data from businesses and influencers to assess whether we have successfully begun to disrupt the market.

We will focus on answering a number of questions, including:

Is it possible for brands to reach a price point that is accessible to low-income households?
Will consumers (including low-income consumers) choose to purchase healthier snack foods if they are more accessible (cheaper and convenient)?
Do these purchases result in overall lower calorie consumption for children? Are our target audience replacing a higher calorie snack with these products?
What combination of investment and grant, and different types of support is successful in supporting challenger brands to scale?

Specific outcomes to be tracked will include:

Sales to our target audience
Improved challenger brand capabilities, including in distribution, store ranging, gross margin and rate of sale
Whether brands operating at greater scale, with national supermarket listings and strong, affordable product development pipeline
Numbers of brands on track repay loan finance or growing company value if in receipt of equity investment

Connection to our strategy

All children should be able to access healthy food, no matter where they live. Families want affordable, tasty, convenient and healthier food, but the current market only caters for cheap options that are unhealthy. We want to transform the options available to families by disrupting the food market and supporting healthier, affordable brands.

New brands coming to market are at a significant disadvantage. They struggle to compete with large corporates who operate with huge economies of scale and at lower cost. In order to cover their costs, healthier brands typically need to focus on customers who can pay a premium, so prices stay high and marketing focuses on audiences with higher incomes. To make healthier options available to everyone, we need to understand how these brands can bring their costs down, so that prices can be lower, and how these brands can market effectively to families on lower incomes.

By building this understanding, and by growing a portfolio of successful new brands, we aim to disrupt the existing food market. We plan to demonstrate to retailers, corporates and investors that there is financial as well as ethical incentive for supporting healthier brands. We also plan to show policy makers that serving healthy products cost effectively is possible, supporting the case for progressive regulation.