How does open innovation work at global ingredients giant Tate & Lyle? And why did it wind down its ventures arm?
AgFunderNews (AFN) caught up with Karen du Plessis (KDP), head of open innovation at the London-based firm, which sells sweeteners, fibers, proteins, and texturants, at the recent Future Food-Tech event in London to discuss:
- How do the best collaborations typically come about?
- How does Tate & Lyle structure deals with startups to create a win-win?
- What are some recent examples of external innovation in practice at Tate & Lyle?
- What happened to Tate & Lyle Ventures?
- How does the partnership with MassChallenge work?
- What lessons has Tate & Lyle learned from previous collaborations?
AFN: How is external innovation structured at Tate & Lyle?
KDP: We have a hybrid model. I’m dedicated completely to open innovation, and what I’m often doing is just helping to facilitate [collaborations]. How can we collaborate with the external market? Because there’s so much talent outside of Tate & Lyle. So can we collaborate to really speed up innovation and get really innovative new solutions to customers a lot more quickly.
AFN: How do collaborations typically come about? Is it from those people within your business who are close to the market, keeping their ears and eyes open? From tech scouting? Or inbound?
KDP: All of the above. It’s very much coming to events like Future Food-Tech, having an opportunity to have conversations with startups who want to engage with us. And that’s also true for our platforms. So where we’ve got our colleagues in sweetening and sugar reduction, they will have great contacts in the wider market who they connect with on a regular basis.
They are closer to the market in terms of following trends, what’s up and coming, meeting people at trade shows. So really, it could be a combination of factors. And then this year, we’ve also become corporate partners of MassChallenge.
AFN: What is MassChallenge?
KDP: MassChallenge is an accelerator program. It’s global, but we’re more involved in the Swiss program, which is focused on food and beverage. We also support the growth of the UK platform, and that’s only in its third year, whereas the Swiss program is much more developed.
The great thing about MassChallenge is they are independent. They don’t take equity, and they have developed a program to really support startups. What are those skills that are going to really help them to be more successful? We support them alongside an ecosystem of corporate partners and mentors that they bring in to help startups with specific challenges or things that they need to navigate.
AFN: What kind of startups do you typically look to work with?
KDP: We’ve got more of a focus currently on opportunities that are not too far off commercializing. But we also want to look at breakthrough innovations and start to develop relationships with those startups as they develop and provide them with a bit of support around common or usual names [for food labeling purposes], regulatory guidance, and so on.
Through programs like MassChallenge, there’s a real opportunity to help to collaborate but also build our understanding of the potential of their ingredient or process because we’re also looking at processes that can improve sustainability and improve efficiency
AFN: How do you structure deals with startups so you can create a win-win?
KDP: It’s really about understanding the objectives of both parties. We don’t have a one-size-fits-all approach. It’s thinking about what’s the commercial opportunity? What can we provide as a corporate partner? Where is the startup in the journey? What are the key milestones and funding requirements?
It’s key to look at what’s important to both parties, and then to really be smart in terms of structuring that collaboration that meets the objectives. But today it’s really important to have something which is not necessarily a huge, very risky, sort of exclusive arrangement. I think increasingly it’s more about how can we start collaborating? How can we do a joint development sprint or some sort of milestone based development where it isn’t ‘all in” or to the exclusion of all others.
AFN: Can you provide any recent examples of external innovation in practice at Tate & Lyle?
KDP: Last year we entered into two fantastic partnerships. One was with Manus Bio, which produces a bio-converted Reb M [stevia sweetener]. We also produce Reb M, but there is a real need from customers to have an Americas-sourced stevia. We’ve collaborated with Manus Bio in order to provide that ingredient to the market, but also to look at what else can we do in terms of joint development… so there’s potential to grow in that partnership as well.
The second partnership is with [plant cell culture company] BioHarvest Sciences. BioHarvest is a biological synthesis platform. So this is about finding a way to have a more sustainable means of producing certain rare sugars. This is more of a joint development approach.
AFN: How does open innovation connect to Tate & Lyle Ventures?
KDP: We decided to step back from Tate & Lyle Ventures, and we actually wound that down. One of the things we found is it’s really challenging sometimes to take an equity stake, because within Tate & Lyle, we don’t have a portfolio management team that will help to manage all of our equity investments, and I think also it creates a conflict sometimes, because what’s best for the startup and what’s best for the corporate partner often diverge, and then you’ve got a situation where there’s no longer strategic alignment.
So I think we’re leaning more towards a model where collaboration around a commercial opportunity works a lot more successfully, because if the objectives change, you can move on to do different things.
[A spokesperson adds: “Having previously invested in two funds for Tate & Lyle Ventures (TLV) over a more than ten-year period, a few years ago we decided to take a different approach to open innovation, like investing in MassChallenge. TLV (which traded through Circadia Ventures) has been gradually wound down and no longer operates.”]
AFN: Do corporates have a reputation as being slow and challenging to work with?
KDP: I think there’s a perception sometimes that corporates are very bureaucratic and very slow. And one of the things I found that’s important to this role is really to help to translate and enable startups to better understand what’s happening and what processes we go through as a corporate because those are born out of a lot of experience and knowledge in terms of what proprietary work needs to go in before commercial launch.
And then [my role is also to] help our organization better understand the challenges for the startups as well. It’s that better understanding of each other’s position that helps a collaboration to be way more successful.
AFN: Can you share any lessons learned?
KDP: One of the things that has been a key takeaway about where collaborations haven’t worked as successfully is to really think about the work plan. Who’s going to be doing what, better understanding the balance of roles and responsibility through the collaboration work, and really thinking about what some of the key milestones are along the way. It’s helping the startup understand what’s expected of them, as well as our teams, and making sure resource planning is going in so that there’s as smooth a collaboration as can be.
AFN: Are you always looking within the parameters of your business as it exists today, addressing challenges around sweetening and so on, or could you use open innovation to take you into a new territory?
KDP: Absolutely we want to go into new territories. I think one of the beauties of being able to be out in the market to scout is to open the field of possibility, especially where we’re looking at some of our customers’ challenges around complex reformulations. We’re always looking at what else we could potentially be doing through collaborations to augment our portfolio.
Further reading:
🎥 Inside Danone’s open innovation model: From AI to Ozempic-era nutrition
🎥 How does front end innovation work at Givaudan? In conversation with Alexandre Bastos
🎥 Inside Novonesis’ playbook for external innovation in biotech
The post 🎥 Inside Tate & Lyle’s open innovation model: In conversation with Karen du Plessis appeared first on AgFunderNews.
