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The Supplement RoundtableWednesday, March 6, 2019Marriott, Orange County Ballroom 1
Welcome
RICK PolitoNew Hope Network
Our Supplement Industry Archetype
Fran SchoenwetterNew Hope Network
ArchetypeHEALERStrengthsInspiration. Empathy. Faith. Passion. Wholeness
ChallengesTemptation to use power for gain, control or fame.Representation as the “only answer.” Egotism.
THE HEALER is essentially a conduit toward wholeness. Acting as a catalyst in which nature is the ultimate healer, this archetype does not do the healing but creates the conditions, beliefs and structure for healing to happen. Sensitive and empathetic to people’s emotions, the Healer has an intuitive and learned capacity for transforming pain into restoration. The Healer possesses a powerful vision of ease and health, and it focuses on the positive, the complete and the well aspects of the world.
Keynote: Paul & Barbi Schulick
PAUL SchulickFor The Biome
BARBI SchulickFor The Biome
BILL GieblerNew Hope Network
Break
Supplements by the Numbers
CLAIRE MortonNew Hope Network
BRIAN WommackCRN
8© 2019 Informa LLC. All Rights Reserved
Supplements: By the Numbers
Expo West 2019
Claire MortonSenior Industry Analyst
Nutrition Business Journalcmorton@newhope.com
Brian WommackSenior Vice President, Communications
Council for Responsible Nutritionbwommack@crnusa.org
9© 2019 Informa LLC. All Rights Reserved
CRN Consumer Survey• CRN’s survey has been conducted annually
since 2000• Survey is funded by CRN and conducted
online by Ipsos Public Affairs, in English (Aug 24-28)
• 2018 survey included a national sample of 2,004 adults aged 18 and older living in the United States
• Of those surveyed, 1,504 were considered supplement users
• Poll has a credibility interval of plus or minus 2.5 percentage points for all respondents, and plus or minus 2.9 percentage points for supplement users
Methodology NBJ Market Sizing• NBJ has been tracking sales and product
trends in the nutrition industry since 1999• A holistic methodology that allows us to
triangulate market size and growth trends• Published estimates are obtained through
POS data (from SPINS and IRI), industry surveys, interviews with key players, public financials, and insights from industry experts
• Our place in the center of the industry allows access to executives and experts across retail, manufacturing and raw material supply, and sources will provide data knowing it is rolled into an overall model and not directly attributed to them
10© 2019 Informa LLC. All Rights Reserved
Bright Spot: Herbs & Botanicals
Bright Spot: Protein
Vitality: Sleep, Energy and Focus
Healthy Habits
The Changing Retail Landscape
Alternative Delivery Formats
Agenda: Key Themes
11© 2019 Informa LLC. All Rights Reserved
• 75% of Americans take dietary supplements
Supplement Market Overview• 87% of U.S. adults have overall
confidence in the safety, quality, and effectiveness of dietary supplements
• 78% of Americans perceive the dietary supplement industry as being trustworthy
• 57% of Americans trust their medical doctor/physician for reliable information on dietary supplements
12© 2019 Informa LLC. All Rights Reserved
Supplement Market OverviewDietary supplement sales grow 6.1% to $46B in 2018
0%
1%
2%
3%
4%
5%
6%
7%
0
10,000
20,000
30,000
40,000
50,000
60,000
2015 2016 2017 2018e 2019e 2020e 2021eGr
owth
Reve
nue
($m
il)
Vitamins30%
Herbs & Botanicals
19%
Sports Nutrition
Supplements14%
Minerals7%
Meal Supplements
12%
Specialty/Other18%
13© 2019 Informa LLC. All Rights Reserved
• 41% of supplement users take herbals/botanicals versus just 28% in 2013
• 19% of U.S. adults aged 55+
take turmeric
Supplement Bright Spot: Herbs & Botanicals
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2013 2014 2015 2016 2017 2018e
Gro
wth
Reve
nue
($m
il)
Sales and Growth, 2013-2018
14© 2019 Informa LLC. All Rights Reserved
• Wasn’t a separate category until 2013
• Growth has more than doubled since 2014
• Growth for 18-34 year old category
• Growth for female supplement users
Supplement Bright Spot: Protein
15© 2019 Informa LLC. All Rights Reserved
Supplement Bright Spot: Protein
$437M
$3.6B $3.9B $3.3B
$11.2B
$928M
$5.5B $5.4B $4.4B
$16.2B
RTD ProteinBeverages
Nutrition Bars Sports Powders Weight Mgmt MealSupplements
Total
2013 2018
↑16%CAGR
2013-2018 ↑9% ↑7% ↑6% ↑8%
16© 2019 Informa LLC. All Rights Reserved
• Use of melatonin has increased by 50% or more in each age group since 2013
Vitality: Sleep
Melatonin60%
Combination Herbs12%
Homeopathics11%
Valerian7%
Magnesium3%
5-HTP3%
Others4%
Sleep Supplement Ingredients, 2018
18–34 35–54 55+
2013 2018
17© 2019 Informa LLC. All Rights Reserved
Vitality: Cognitive/Focus
0%
2%
4%
6%
8%
10%
12%
0
100
200
300
400
500
600
700
800
900
1,000
2013 2014 2015 2016 2017 2018eGr
owth
Reve
nue
($m
il)
Sales and Growth, 2013-2018
18© 2019 Informa LLC. All Rights Reserved
• Since 2013, the use of energy drinks and/or gels among supplement users aged 18-34 has doubled
• Energy is one of the top 3 reasons supplement users take dietary supplements
Vitality: Energy
0%
2%
4%
6%
8%
10%
12%
14%
0
500
1,000
1,500
2,000
2,500
2013 2014 2015 2016 2017 2018e
Gro
wth
Reve
nue
($m
il)
Sales and Growth, 2013-2018
46% 29% 28%
For Overall Health
Fill Nutrient Gaps
Energy
19© 2019 Informa LLC. All Rights Reserved
Vitality: Healthy Habits
2013 2014 2015 2016 2017 2018
70%
55%
EXERCISE REGULARLY
65%
57%
Supplement users
Non-users
20© 2019 Informa LLC. All Rights Reserved
Vitality: Healthy HabitsTRY TO EAT A BALANCE DIET
87% 87%Supplement users
Non-users
2013 2014 2015 2016 2017 2018
78% 76%
21© 2019 Informa LLC. All Rights Reserved
Vitality: Healthy HabitsVISIT A DOCTOR REGULARLY
75%
80%Supplement users
Non-users66% 68%
2013 2014 2015 2016 2017 2018
22© 2019 Informa LLC. All Rights Reserved
Vitality: Healthy Habits
GET A GOOD NIGHT’S SLEEP
71% 74%Supplement users
Non-users72% 67%
2013 2014 2015 2016 2017 2018
23© 2019 Informa LLC. All Rights Reserved
The Changing Retail Landscape42%
38%
23% 23%
17% 16%
41%37%
23% 22%
17%14%
41%39%
21% 20%22%
16%
Mass Merchandiser DrugStore/Pharmacy
Warehouse Club Supermarket Online Specialty VitaminRetailer/Chain
Health Food Store% of Supplement Users - 2016 % of Supplement Users - 2017
24© 2019 Informa LLC. All Rights Reserved
The Changing Retail Landscape
Mass Market Natural and Specialty MLM/Network Internet Practitioner Mail Order, DRTV, Radio
36%
26%16%
9%
8%5%
Market Share by Channel, 2018
0%2%4%6%8%
10%12%14%16%18%20%
2013 2014 2015 2016 2017 2018e
Grow
th
Sales Growth by Channel
25© 2019 Informa LLC. All Rights Reserved
• Survey data from 2013-2016 show that preference for a gummy dietary supplement steadily grew
• In 2017, CRN looked at delivery forms consumers were switching to
Alternative and novel delivery formats
41%
42%
43%
44%
45%
46%
47%
48%
49%
50%
2017 2018
Supplement Users Switching to Gummy
Total percent of Supplement Users who switched delivery forms to a gummy
18-34 year olds who switched delivery method to gummy
26© 2019 Informa LLC. All Rights Reserved
Alternative and novel delivery formats
Pill63%Gummy
6%
Other Non-Pill
31%
2013
Pill51%
Gummy12%
Other Non-Pill
37%
2018eNon-pill+12%
27© 2019 Informa LLC. All Rights Reserved
LOOKING AHEAD
60%of supplement users say they anticipate their
supplement use will increase in the next five years
71%of users 18–34
67%of users 35–54
45%of users
55+
28© 2019 Informa LLC. All Rights Reserved
We will now take 5 minutes of Q&A
The Business of Supplements
TOM AartsNutrition Business Advisors
Supplement RoundtableThe Business of Supplements:Trends, Transactions, & Deal Summary
Thomas AartsCo-Founder, NCN & NBJCo-Chair, NBJ Summittom@nutritionadvisors.com
22nd Annual NBJ Summit, 2019July 15th – 18th, Rancho Palos Verdes, CA
31
Theme: “Collaboration & Community – Learning from our Collective Successes and Failures
to Co-Create a Thriving Nutrition Industry”Featured Topics: NBJ Summit Innovation FIX:• Entrepreneurs and business visionaries will present their innovations and challenges to our audience of
nutrition industry leaders and to a world leader in Behavioral Design as part of this interactive program.
Blockchain Technologies Shaping our Future:• Blockchain promises to be among the most critical tools of supply chain traceability and transparency.
Experts will share the technology’s strategies, opportunities and pitfalls.
Evolving Challenges & Opportunities in Hemp & CBD:• All eyes are on the hemp and CBD market and we will provide an update on the regulatory landscape and the
latest innovation and case-studies in this explosive but controversial category.
32
NCN’s Place in the Informa H&N ‘Ecosystem’
Behold the Power of New Hope
Nutrition Capital Network Overview
33
The NCN ‘Ecosystem’
Communicative Applicants
Cornerstone Investor Members
Presenting Companies
of Companies have Raised Money or
Completed a Transaction
different Investor Groups
Mentors & Industry Experts (NCN
Screening Committee)
Meetings
41 3,300
58
720
57%
330+
54
Top Macro Supplement Trends 2016-2018
34
1. Protein goes mainstream with plant proteins and collagen sourced protein trending
2. New convenient delivery forms are of interest to consumers
3. Whole foods supplements holding their own
4. Gut health is still hot and science is becoming stronger – next is the “microbiome”
5. Pet supplements are becoming a legitimate category
6. Non-GMO interest and consumer awareness is impacting supplements
7. Brain health interest is still growing
8. Internet (Amazon) is a big factor
9. Sleep remains a huge opportunity that is an unmet need in the mass market
10. Inflammation supplements are very high on consumer radar
11. More transparency and science will be required to succeed
12. CBD (Cannabis) is real and coming on strong
13. Personalization and Semi- Personalization are coming to a theater near youSource: Nutrition Business Advisors and NBJ preliminary research
Size & Growth of Nutritional Categories by RetailersActive Nutrition
35
Source: William Hood, 2017
NBJ Editorial 2013:Supplement Can Win in a World of Personalized Medicine
36
1. We’re headed from the age of the average to the age of the individual.
2. The companies that can provide simple and user friendly diagnostics to measure an individual’s biomarkers, and then deliver a nutraceutical product that can positively impact these metrics, will have the advantage in the age of personalized lifestyle medicine.
3. The $100 million supplement company of tomorrow may not even be a supplement company, but rather a diagnostics company that creates or effectively partners with a product line.
4. The diagnostics arm of personalized medicine also provides an important opportunity for our industry to prove to doctors and consumers, as well as our critics that our products really do work.
Source: Thomas Aarts Editorial; Nutrition Business Journal
Landscape for Personalized Nutrition 2018
37
Minimal Personalization•Lowest Cost•Off-the- shelf solutions
Maximum Personalization•Highest Cost•Individualized solutions
Condition Specific Supplements (1990’s)
Survey Based (2000)
Tracking Devices (~2007)
Biomarker Tests (2012)
Genetic (~2002) & Microbiome Testing (~2010)
The Future of Healthcare Driven by Paradigm Shifts in Diagnostics & Technology
38
Public Health Initiatives
(e.g. ObamaCare)
Private Health Initiatives
(Insurers, Corp. Wellness)
PersonalizedLifestyle Medicine
(Nutrition)
Accessible Diagnostics(Genetics & Biomarkers)
Nutrition, Rx, Lifestyle
TherapiesHealthcare Crisis
Mobile Technology
Social Networks
Computing Power
Big Data
Innovative*Diagnostics
Innovative*Self Care
(Quantified Self)P4 Medicine
(Personalized, Preventative,
Predictive, Participatory)
Lifestyle Healthcare/
Medicine
Sources: PLMI, Eric Topol, presented at the NBJ Summit, 2013*Innovative = Simpler, Faster, Better, Real Time Products & Services
Market Dynamics for Personalized Nutrition
39
Where we are nowThe accessibility of detailed, personalized nutrition information is still in early phases of value & adoption
Where we are goingImproved technology, decreases in cost, and greater understanding of the benefits will bring personalized nutrition into the mainstream (2022)
Personalized Nutrition$XX Billion (2018)
7-10%Compounded Annual Growth Rate
In 2022$XX Billion
Source: DNA Sequencing Market will exceed 20 billion says Illumina CEO Jay Flately – ForbesSpectacular Laboratories Revenue – Competition – Market Share – Growth – IncFactMicrobiome Sequencing Services Market will Reach USD 1,570.4 Million by 2022
NCN 2018 Deal Flow Counts
Nutrition Capital Network Database
41
NCN Transaction Database(942 in 2018; 4,680 since 2009)
NCN Deal Flow Database(3,720 since 2007)
NCN Presenter Tracking(720 since 2007)
Source: Nutrition Capital Network Transaction Database.
Nutrition and Health & Wellness Industry: Transactions Number Level in 2018
42
Source: Nutrition Capital Network Transaction Database. Counts are from actual listed transactions.* Using annualized rate based on first half data
2015 2016 2017 2018
M&A Transactions 247 259 355 338
Financing Transactions
382 456 553 604
Total Transactions 629 715 908 942
M&A Growth* 41% 5% 37% -5%
Financing Growth* 82% 19% 21% 9%
Transaction Growth* 63% 14% 27% 3%
Nutrition and Health & Wellness Industry Transactions:Key Segments in 2018
43
2014 2015 2016 2017 2018 2017 2018
M&A: Natural & Organic, Functional Food 53 100 103 138 136 34% -1%
Financing: Natural & Organic, FunctionalFood
35 105 105 140 133 33% -5%
M&A: Retail & Distribution 11 10 26 34 22 31% -35%
M&A: Ingredients 22 22 29 43 28 48% -35%
M&A: Supplements 22 10 17 21 10 24% -52%
Financing: Supplements/Ingredients/PTC/PC 26 20 15 46 33 207% -28%
Financing: Technology & FoodTech 110 173 183 159 192 -13% 21%
Financing: Nutrition Biotech & Agtech 12 39 120 126 142 5% 12%
Source: Nutrition Capital Network Transaction Database.
Summary of NCN Deal Flow by Segment:June 2017 to July 2018
44
Source: Nutrition Capital Network Deal Flow Database derived mainly from incoming applications to present at NCN Investor Meetings, qualified referrals and NCN events at trade shows
Through July 2018 Through July 2018 Just 2018 Just 2018
Branded F&B 1862 54% 239 67%
Ingredients 452 13% 33 9%
Supplements 394 11% 41 11%
Natural PC & Household 299 9% 24 7%
Technology 211 6% 5 1%
Retail & Service 127 4% 11 3%Other(Apparel, Media, Education, Medical Foods,Packaging, Fitness, Green Products)
111 3% 5 1%
Total 3,456 460
Nutrition and Health & Wellness Industry Transactions:Financing Details
45
2018 2017 2016 2015 2014
Total M&A 340 356 259 247 175Financings
Biotech & Agtech 142 126 119 39 12Branded Food & Beverage 133 138 105 104 35Ingredients & Contract Manufacturers 5 17 6 7 6OTC & Personal Care 37 22 4 9 11Retail and Distribution 27 18 16 18 8Supplements 7 6 5 4 9Technology - Apps, Information, Media* 42 45 49 53 31Technology - Delivery Service* 78 67 70 85 28Technology - Devices: Analytical, Diagnostic &Monitoring
18 5 21 12 18
Technology – Robots/Automation 14 4Technology - E-Commerce* 32 13 19 15 20Technology - Software 22 15 22 8 13Urban Farming 8 15 2 3 4Other 59 77 28 25 16Total Financings 606 555 456 380 208Total Transactions 946 911 715 627 383
Source: Source: NCN Transaction Database. Counts based on transactions detailed in NCN’s Transaction Database;*These three segments may also be referred to as Foodtech.Source: Nutrition Capital Network Transactions Database. Counts are from actual listed transactions.
Top M&A Transactions in Nutrition and Health & Wellness:2017 & 2018
46
Acquired Acquirer Value ($mil)
2018
Pinnacle Foods ConAgra Foods $10,900Blue Buffalo Pet Products General Mills $8,000Frutarom International Flavors & Fragrances Inc $7,100Merck KGaA (Consumer Health) Procter & Gamble $42,00Ainsworth Pet Nutrition The J.M. Smucker Company $1,900Nutranext Clorox $7002017
Whole Foods Amazon $13,700Whitewave Danone $12,500Snyders-Lance Campbell Soup Company $4,870Nature's Bounty KKR $3,000Atrium Innovations Nestle $2,300Amplify Snacks The Hershey Company $1,600Stonyfield Farm Lactalis $875Pacific Foods Campbell Soup Company $700RxBar Kellogg Company $600Nutraceutical International Corporation HGGC $446Daiyo Foods Otsuka Holdings Co $324
Source: Nutrition Capital Network Transactions Database
M&A in the VMS Industry is at an Historic High
47
$13 Billion in VMS in Last 18 Months
Source: William Hood, 2018
Overview of M&A Activity in the Nutrition Industry:VMS 2010-2018
48
Source: William Hood, 2017
Competition & Demand Drive Up Transaction Size & Valuations in VMS Space
49
Source: William Hood, 2017
From 2015 to 2018, a selected group of 15 transactions had average multiples of 22x sales and 13.5x EBITDA
Supplement M&A DatabaseMay 2017 – January 2019
50
Date Target Acquirer
Jan-19 Muscle Milk (CytoSport) PepsicoDec-18 PhD Nutrition Science in SportNov-18 Nutritional Medicinals LLC. (Functional
Formulaties)Swander Pace Capital
Jul-18 Mixfit DSMJul-18 Thorne Research Mitsui and KirinApr-18 Garden House Mega PharmaApr-18 Nature's Care Chinese state-backed consortium that includes China Jianyin
Investment Ltd. and Tamar Alliance
Apr-18 Merck KGaA (Conumser Health business) Procter & Gamble
Mar-18 Nutranext (R.Light, Neocell) CloroxMar-18 ViaViente Youngevity InternationalJan-18 Healthy Directions LLC Direct Digital LLCDec-17 Atrium Innovations NestleDec-17 Gridiron BioNutrients MyCloudzAug-17 Neocell NutranextJul-17 Nature's Bounty KKRMay-17 Top Secret Nutrition Hi-Tech PharmaceuticalsMay-17 Nutraceutical International Corporation HGGC
Source: NCN Transaction Database
Natural & Specialty Brands Acquired 1995 to 2018 – USA10 of Top 20 Brands have been acquired by Strategic Investors
51
Brand Acquired by Appr Sales ($M)* Type of Purchase
Year of Transaction
Year Brand Founded
NOW Foods $400+ N/A 1986Natures Way Schwabe N.A. $300 Strategic 1998 1968Garden Of Life Nestle $280 Strategic 2018 2000Rainbow Light (Nutranext) Clorox $275 Strategic 2018 1981Country Life Kikkoman $150 Strategic 2016 1971Natural Factors $139 N/A 1968Renew Life Clorox $121 Strategic 2016 1997New Chapter Proctor & Gamble $120 Strategic 2012 1982Vega White Wave (Danone) $120 Strategic 2015 2001Solgar NBTY/KKR $115 Strategic 2008 1947Jarrow Formulas $110 N/A 1977Nordic Naturals $86 N/A 1995Natures Plus $80 2008Source Naturals $80 1982Bluebonnet $75 1991Gaia Herbs $65 1987Boiron $55 1932Megafood Otsuka/Pharmavite $40 Strategic 2016 1973Flora Inc $40 1965Solaray Nutraceuticals Intl $35 Strategic 1973
*Approximate sales in 2018 sales or sales when transaction occurred
Source: NCN & NBA Research
What did Acquirers Value in a Transaction?
52
Target Approx. Size Valuation Brands
/ Scale Distribution Market Share Demographic Science Proprietary
Mfg. / FormChina
Presence
$2.3B PPP –
$350M PPP –
$150M PPP – –
$1.5M PPP – –
$650M PPP – –
~$300M PPP –
$1.2M PPP – –
Source: William Hood, 2018
2018: Zarbee’s Acquired by Johnson & Johnson
53
Acquires
NDAnnounced August 2018
“Through Zarbee’s Naturals™, we are excited to bring a more comprehensive set of products to consumers within our core need states. The Zarbee’s team has achieved tremendous success in the marketplace and we are excited to be a part of their future growth. Upon closing of the transaction, we look forward to working closely with the Zarbee’s team as they join the Johnson & Johnson Consumer family.”
Kathy Widmer | President, U.S. OTC
#1Pediatric Cough /
Cold Brand Nationally
2008Founded as a drug-free pediatric cough
syrup
#1Children’s Sleep
Product Nationally
EV ($M)
NA
Revenue ($M)*
$75EV/Rev.
0.5x
EV/EBITDA
NA
Source: William Hood, 2018
*Note: 2017E revenue
2018: Merck Consumer Health Acquired by Procter & Gamble
54
Acquires
$4.2BAnnounced April 2018
~$1,135MSales Revenue
+6% 4yr Rev CAGR
Mother’s & Family Health
Energy & Well-Being Mobility
EV ($M)
$4,200.00
Revenue ($M)*
$1,135.00
EV/Rev.
3.7x
EV/EBITDA
19.5x
Source: William Hood, 2018
*Note: 2017E revenue
Procter & Gamble Acquisitions of New ChapterCase Study: Was this a Failure or Success?
55
• It is rumored now that P&G may sell off their healthcare platform or this brand if it can't grow to a certain level.
• Today a lot of the industry dynamics are different, so a similar acquisition could be successful, but one of the key lessons learned is that you have to leave the brand culture and company alone for as long as possible.
• There are many other examples of companies that have been purchased by large companies and are more successful when they are left alone to run independently with the support from the parent, instead of too many requirements imposed from the parent. o For example, Danone purchased Stonyfield Farm Yogurt Company over a decade ago and the structure of
the deal was that the CEO and founder of the company stayed in and they kept it as a separate company for as long as possible.
o Reckitt Benckiser purchased Schiff and that's been successful because they've taken the brand internationally and have been able to leverage their products in various markets, but the product was already in the mass market.
o It is yet to be seen what Nestle will do with Garden of Life or Clorox will do with Renew Life, but it's worth looking at both as business case studies so that we can learn from both.
EV ($M)
$2,300.00
Revenue ($M)*
$700.00
EV/Rev.
3.3x
EV/EBITDA
NA
Source: William Hood, 2018
M&A Transformation Case Study: Nestle’s Latest Acquisition
56
Acquires
$2.3B
From
Announced December 2017
~$300MSales Revenue
+27% 5yr Rev CAGR
#1Brand HFS
~$120MSales Revenue
+18% 5yr Rev CAGR
#1HCP Reco
Brand
*Note: 2017E revenue
M&A Transformation Case Study: Clorox Most Recent Acquisition
57
Announced April 2017
Acquires
$700MEV ($M)
$700.00
Revenue ($M)*
~$200.00
EV/Rev.
3.5x
EV/EBITDA
14.0x
Source: William Hood, 2018
#2 Vitamin Brand in the Natural
Channel
#1 Anti-stress and Sleep Brand in the Natural Channel
#1 Collagen Brand in the US
DTC VMS Platform
Leader in Supplements
Cleansing Products Creator
Sports Nutrition Pioneer
*Note: 2017E revenue
EV ($M)
$3,000.00
Revenue ($M)
NA
EV/Rev.
NA
EV/EBITDA
NA
Source: William Hood, 2018
2017: The Nature’s Bounty Company Acquired by KKR
58
Acquires
$3.0B
From
Transaction value per public press reportsAnnounced July 2017
#2 VMS Brand in FDMC
#1 Premium VMS in Specialty
Natural VMSin FDM
#1 Joint Care #1 Protein Powderin FDM
#1 Protein Bar in FDM
Sports Nutrition Pioneer
Leader in Ethical Beauty
DTC VMS Platform
EV ($M)
$446.00
Revenue ($M)
$235.40
EV/Rev.
1.9x
EV/EBITDA
10.4x
Source: William Hood, 2018
2017: Nutraceutical Acquired by HGGC
59
Acquires
Transaction value per public press reportsAnnounced May 2017
$446M~10x
EBITDA Multiple
$0
$15
$30
$45
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
HGGC Announces Acquisition
Acquired 50companies since 1993
EV ($M)
$350
Revenue ($M)
$100
EV/Rev.
3.5x
EV/EBITDA
18.0x
Source: William Hood, 2018
Disruptive M&A in VMS: Pfizer Acquisitions of Emergen-C
60
Agrees to acquire
$350M
“We expect that our global network and deep expertise in dietary supplements combined with our desire to provide consumers with high-quality products will make Emergen-C more accessible than it has ever been before. Emergen-C products add to and greatly complement our market-leading dietary supplement portfolio by bringing a younger consumer into our brands.”
Announced: February 2012
The Perfect Recipe for a Strategic Multiple
61
“…a natural, organic, functional better for you brand authentically founded by a millennial mum for millennial mums with transparent labeling and connection-based marketing with
proven omni-channel success and data mining capabilities superior to that of Stanford University mathematics PHD… oh, and of course with a great culture which includes team
building games of ping pong between meetings in sustainably built offices…”
25XSource: William Hood, 2018
62
Thank You!
Thomas AartsNCN Principal & Co-Foundertom@nutritionadvisors.com
Appendices
Top M&A Transactions in Q1-Q2 2018: Former NCN Presenters
64
Source: Nutrition Capital Network Transactions Database
Company AcquirerTerrafertil Nestle
Tcho Ezaki Glico
Runa All Market Inc.
Temple Tumeric Dunn’s River Brands
Exo Aspire Food GroupMazza Innovation Sensient Technologies
High Quality Hemp Pioneers
RICK PolitoNew Hope Network
JOEL StanleyCharlotte’s Web
Marketing to a Millennial Mindset
JEFF HiltonBrandHive
TED MillsTespo
MARKUS KarjalainenFour Sigmatic
ERICA BryersOra Organic
Supplement Roundtable Millennial Paradigm
Millennial Paradigm
68
• Millennials as “tip of the spear”
• Gen X & Boomers aspiring downward to adopt/adapt• Converged coalition at the forefront of change in H&W
• Clean label and brand transparency• Sustainable, vertically integrated sourcing
• Personalized nutrition solutions• OmniChannel surfing and shopping
73
Purchase Funnel
Awareness
Interest
Consideration
Purchase Actions
Loyalty
Broadcast, Print, Display, Video
Print, Display, Social Media, Retargeting
Retargeting, Search, Mobile, Social Media
Social Media, Website Analytics, Coupons/Discounts
CRM, Social Media, Incentives, Product Reviews
Impressions
Impressions & Engagement
Web Traffic/Clicks
Sales
Repeat Sales, Positive Social
Sharing
G E T T E S P O . C O M
TESPOShaping the future of personalized supplementation
MARCH 2019
Visit us atBrandHive.com
Close
RICK PolitoNew Hope Network
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