Nutrition Capital Network (NCN), an organisation that connects investors with high-potential growth companies in the nutrition and health and wellness industry, has released its annual list of top 20 transactions in 2013.
Drawn from NCN’s Transaction Database, the list includes mergers and acquisitions, in addition to financings, in healthy foods, ingredients, nutritional supplements, contract manufacturing, retail, and related Internet-based platforms and mobile technologies.
Overall, said NCN, the pace of transactions in 2013 was brisk at volumes similar to 2012 indicating sustained interest by the investment community in the nutrition and health and wellness space. The healthy food category saw the most activity in 2013 led by 64 acquisitions. Healthy ingredients was the next most active category with 29 acquisitions.
The organic food category also yielded the year’s largest transaction in a merger of industry veterans, as WhiteWave Foods acquired the organic packaged produce company Earthbound Farm for approximately $600 million.
“WhiteWave started life in its founder’s garage and Earthbound in a 2.5-acre backyard. The combination of these pioneering brands has created a powerhouse in the organic food industry,” said NCN executive director Mike Dovbish.
The second biggest transaction of 2013 was in the ingredients category, with FMC Corp. targeting Epax, a European manufacturer of omega-3 fatty acids, for approximately $345 million. This was the fourth in a run of omega-3 deals following the acquisition of Martek Biosciences and Ocean Nutriton by DSM in 2011-12, and of Pronova BioPharma by BASF completed in 2013. NCN believes these deals have significantly consolidated the omega-3 fish oil sector, leaving algae-derived oil and specialty oil as the next focus of potential acquisition activity.
The third largest acquisition tracked by NCN, according to disclosed sales data, was B&G Foods’ purchase of Pirate’s Booty natural snack brand from VMG Partners for approximately $195 million.
Healthy food for babies and children saw three significant deals in the first half of 2013 as Plum Organics (Campbell), Happy Family (Danone), and Ella’s Kitchen (Hain Celestial) were snapped up by strategic buyers eager to benefit from fresh growth in the baby and toddler category. Little Duck organic foods raised investment.
“These young companies have experienced explosive double digit growth and are transforming a traditional, unimaginative category with innovative packaging and organic ingredient profiles,” observed Dovbish.
Raw pressed organic juice companies sustained momentum through 2013 and into 2014, differentiated by new technology, delivery, and subscription models. Notably, Suja, an NCN presenting company, received an $8+ million minority investment from Boulder Brands Investment Group, followed in January 2014 by an investment from Alliance Consumer Growth.
“These new micro-juiceries could eventually become acquisition targets along the lines of Evolution Fresh Inc. (purchased by Starbucks in 2011) and Blueprint (Hain Celestial, 2012),” said Dovbish.
Activity in the online marketplace was distinguished by Internet-enabled farm-to-consumer and farm-to-business platforms, with Aglocal, AgSquared, FarmersWeb, Farmigo, and Good Eggs either raising investment or making acquisitions.
“Until recently, farming and agriculture have seen little in the way of innovation in the form of technology-enabled tools,” noted Dovbish. “With the adoption of mobile devices and advancement of geolocation technology, startups have addressed this market and investors are taking note.”
Investors also maintained their interest in healthy home delivered meals and ingredients, with Gousto, Relay Foods and Blue Apron all raising capital.
