General Mills' venture arm, 301 Inc., has invested in the parent company of juice and shot company GoodBelly Probiotics, the companies will announce later Wednesday.
NextFoods, the Boulder, Colorado-based parent of GoodBelly, is raising $12 million in funding in a new round led by 301, with additional capital coming from existing investors, including Emil Capital Partners. NextFoods was founded in 2007 by Todd Beckman and Steve Demos, who founded WhiteWave Foods, the owner of Silk plant-based milk.
The companies would not comment as to whether the investment included a path to an outright acquisition, as can sometimes be part of such deals.
The investment comes as GoodBelly looks to expand beyond beverages into snacks such as bars or other products. For General Mills and its venture arm, the deal furthers its presence in the probiotic space while leaning on its experience managing brands such as Nature Valley Bars and Annie's Homegrown snacks.
"This is a significant area we believe is going to grow rapidly," said John Haugen, vice president and general manager of 301.
GoodBelly has already partnered with General Mills to license its name for bars. There is likely to be further product expansion down the road.
"We have a whole wave of innovation in the pipeline," said Alan Murray, GoodBelly CEO.
The two did not specify which new categories they may expand into, but General Mills has an ample foothold in the yogurt category. The Yoplait owner has been looking to revive its yogurt business and earlier this week announced a new low-sugar ultra-filtered product aimed at competing with the rise of similar yogurts such as Siggi's.
Meantime, the investment comes as gut-health products such as fermented kombucha drinks increasingly appeal to today's health-focused generation. Molson Coors announced earlier this month it acquired Clearly Kombucha, and PepsiCo two years ago announced its acquisition of KeVita, a sparkling probiotic drink.
General Mills created its venture arm in an effort to keep its ear close to the ground on new products, as many of its legacy brands have fallen out of favor with today's health-focused generation.
As part of efforts to reorient its portfolio, it acquired organic food company Annie's in 2014 and premium pet food company Blue Buffalo Pet Products earlier this year.
Whipstitch Capital served as financial advisor on the NextFoods deal.