NCN found that by mid-year this year, mergers and acquisitions were up 33%, while financings were up 16%, compared to transaction tracking data from last year.
Investor interest in the nutrition and health & wellness industries is showing no signs of slowing. A new report by Nutrition Capital Network (NCN), an organization that helps to facilitate matches between companies and investors in the nutrition and wellness space, found that between January–June 2017, mergers and acquisitions (M&A) in this space were up 33%, while equity financings were up 16%, compared to transaction tracking data from last year. NCN reports that so far in 2017, a total of 436 deals (M&As and financings) have been recorded, compared to a total 715 transactions recorded during the entirety of 2016, 627 total transactions in 2015, and 383 total transactions in 2014. According to NCN, this mid-year data indicates that if growth continues apace, 2017 will be a record year for the industry.
Specifically, the report notes several key acquisitions that helped to drive these impressive numbers. Amazon’s acquisition of Whole Foods for $13.4 billion, Lonza’s acquisition of Capsugel for $5.5 billion, and Danone’s acquisition of WhiteWave Foods for $10.4 billion, among other significant acquisitions, are especially noteworthy.
Natural, organic, and functional food and beverages remain popular and of high interest to investors, according to the report. NCN said that M&As in this market increased by 26%, and financings by 25%, so far this year. According to NCN, these numbers indicate deals in the healthy food and beverage market will likely top 2016’s record numbers. Grant Ferrier, CEO, NCN, noted in a press release: “That the pace of transactions in natural and organic foods in 2017 continues to exceed previous years’ records is indicative of the strength of this category and the fact that the emerging battleground in the global food business is healthy foods.”
There is one area of slowing growth in the food industry, however. Investment in food technology, which NCN said “has been the growth engine for financings over the past few years,” finally slowed in the first half of the year. In particular, NCN said, there were notable drop-offs in e-commerce and software. This segment is on track for a 13% decline by the end of the year, according to NCN. Nutrition biotech and agtech, on the other hand, appears to have taken over as the major growth engine for 2017. NCN said this segment is on track for threefold growth over the last year.
In addition to the growth trends in food and beverage, as well as in nutrition biotech, the NCN noted the following trends for 2017:
NCN also shared its lists for top five M&A transactions and top 10 nutrition and health & wellness industry financings for Q1 and Q2 in 2017: