Attracting Natural Product Investors: Natural Products Are Big Business

Five targets for investors’ health and wellness dollars.

In that great big high-school dance that is today’s venture-financing environment, brands with a health-and-wellness bent are the prom queens, the most popular belles at the ball courting a string of suitors eager to fork over funding for the mere privilege of getting a spot on their dance cards.

That was certainly the lesson that emerged from the four industry summits that Nutrition Capital Network (NCN) convened last year. The San Diego, CA–based organization has been uniting investors with high-potential prospects in the nutrition, natural product, and H&W sectors since 2007, and of the 40 companies that participated in its two full-day investor meetings in 2014-NCN XIV in New York and NCN XV in San Francisco-fully 55% came from the natural, organic, or functional packaged food and beverage categories, while a further 15% were supplement and/or medical-food marketers, according to Grant Ferrier, NCN’s principal and CEO.

And that pattern, it appears, was catching: A similar emphasis on functional foods, supplements, and consumer health prevailed at the group’s two half-day investor meetings, which led Ferrier and colleagues to draw a few conclusions about which concepts aren’t just generating the most H&W research and innovation, but present the most opportunity for growth-and, hence, the most investment.

“A theme that’s come to the fore is quality of life versus length of life,” Ferrier says. “The last 20 years of medical and nutritional science have contributed to life expectancy. Yet today it’s very apparent that consumers are most concerned about losing quality of life during those extra years.” Age-related drops in cognition, eyesight, energy, and stamina, not to mention chronic problems like joint pain and poor digestion, weigh on the public mind. “So a product or company that delivers solutions in those categories is most likely to pique the interest of nutrition and health-and-wellness investors,” Ferrier says, “both strategic and private equity.”

The following slides delve more deeply into the categories that caught the money guys’ eyes.

 

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To get an even closer look at recent deals in the H&W industry, read more on

. According to an NCN press release update on the database

  • Overall transaction activity (acquisitions plus financings) in the nutrition and health & wellness industry grew 47% in 2014 to 372 transactions, up from 253 in 2013
  • Equity financings accounted for most of this growth, more than doubling from 93 in 2013 to 204 in 2014

And if you want to bend the ear of those eager investors yourself, “Our free application process for upcoming meetings in 2015 is now open,” Ferrier says. NCN invites companies to apply to present their business plans at its NCN investor meetings in 2015 by applying online (no cost to apply). Care to dance?

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By Kimberly Decker

 

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