White Paper Research
The Natural Choice For Investment Banking
Part I: Evaluating Valuation. As an investment banker in the Consumer space (focused on natural products) who often talks with the CEOs and owners of early-stage and growth-stage companies I am frequently asked, “What’s my valuation?” My short answer is: “Whatever the market will bear.” It rarely satisfies.
The VMS/nutraceutical industry is growing at a very healthy rate, exceeding that of other consumer non-durables such as food and beverages and dramatically outpacing growth of the sluggish overall American and global economies. Certain segments are growing faster than others. Sports nutrition leads the pack, with a 10.2% compounded annual growth rate (CAGR) over the last 5 years, with meal replacement at 9.3%; herbs and botanicals at 6.9%; and specialties, including products containing ingredients such as probiotics and omega-3 oils, at 5.9%.
The US market for non-alcoholic beverages in 2015 was roughly $170 billion and is projected to grow to roughly $190 billion by 2020.1 On a global basis the market is approaching US$900 billion. According to Transparency Research, if one includes milk and dairy, the global non-alcoholic beverage industry is expected to reach $1937.73 billion (nearly two trillion dollars) by 2020.2
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