Investors stay on their toes for healthy opportunities

Gareth Iley


By Gareth Iley, partner and international head of consumer at Clearwater International

The global shift towards improving our health and wellbeing dominates product development across every food and beverage company.

Consumers are increasingly looking for products that are healthy, packaged attractively and, most importantly of all, still taste good. Health trends include high protein, low sugar, low salt and plant based rather than animal based proteins.

Much of this demand is being driven by younger consumers, for whom sustainability is also particularly important. They expect their foods to be produced in an ethical way with traceable ingredients, and be made from natural flavourings wherever possible.

At the same time the way we consume food is changing – with a lot more food on the go, snacking and eating out. This more convenient food consumption can easily conflict with the desire to eat healthily.

A good example of delivering both convenience and health is one of the West Midlands fasting growing companies, Grenade. Their range of healthy snacks, that are high in protein and low in sugar, are extremely popular among active consumers seeking a more healthy lifestyle and have driven significant growth for Grenade.

The company, founded in 2010 by husband and wife Alan and Juliet Barratt, was ranked in 2019 Sunday Times International Track as one of Britain’s private companies with the fastest growing international sales. The company has also undergone two private equity deals, most recently when Lion Capital invested in the business during 2017 in a deal which valued Grenade at £72m.

Nearly 3m UK consumers were estimated to go vegan for January 2019. Plant based protein is growing in popularity with restaurants and supermarkets offering a greater range of vegetarian and vegan food than ever before. Allplants, a London based company, raised £7.5m from Octopus Ventures in 2018 to support the growth of its home delivery plant based meals, combining vegetarian food with the convenience of home delivery.

There are many examples of food companies developing products and brands to meet these growing health and wellness trends. The challenge for producers in this market is how they then balance nutrition and taste as the science evolves.

Against this backdrop, a whole new generation of nimble ‘better for you’ brands are emerging which not only have an opportunity to capture market share, but also play their part in helping to tackle the global obesity crisis. UK start-up The Meatless Farm was listed in 640 Sainsbury’s stores in October 2018, offering plant based mince and burgers.

These start-ups are attractive investment propositions with many funds seeking to invest in these young businesses. Increasingly, they are acquisition targets for large manufacturers which want to grow their better-for-you offering by acquiring brands that are already gaining traction, rather the investing in R&D from scratch. As such we expect to see continued M&A activity in this space in the months and years to come.

www.clearwaterinternational.com

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