🏢 🥗 Why food companies will keep buying healthy brands?

Recently, we released a focus on healthy ageing (healthier food products to improve your healthspan) and another on the innovation ecosystem around GLP-1, notably the food products, which define themselves as companions to help you on your journey.

As a reminder, we find in this ecosystem two types of not-mutually-exclusive players:

• Natural GLP-1 (products having similar effects as the weight-loss drugs), which aim to boost the effects of the drugs
• Relief food products, which are here to combat its side effects, notably the muscular mass loss (which you can now find on Nestlé’s GLP-1 nutrition platform).

The millions of users of these drugs are creating a wave of investments toward healthier foods.

Indeed, a recent survey showed that 83% of GLP-1 users say that they are “very interested” in products that support their needs as they use the drug.

That’s far from being only a “startup thing”. On the opposite, it’s a movement embraced by food giants.

However, one questions remains:

How to get consumers to adopt healthier foods?

A first approach would be to get consumers to adopt healthier behaviours, notably by helping them to move to less-processed foods, more homemade meals, etc. But that’s not really what we are observing. Indeed, that’s highly complex and does not really represent the role of big food companies. The current vision is instead to change current products to make them healthier and suited for more health-conscious consumers.

In the long term, this will be done by using new ingredients, alternative sugars, alternative fats, etc.… reducing the harmful effects of the real things while eventually bringing some benefits.

In the short term, there is a strong opportunity for better-for-you products. I am not talking about supplements but standard products with a better, cleaner ingredient list. That’s something that large companies have already understood. For example, just in the past couple of weeks alone:

• PepsiCo acquired Siete Foods for $1.2 billion. Siete manufactures tortilla chips and other TexMex food products with a health angle.
• Mondelez invested in UK-based Urban Legend, a maker of “healthy donuts”.

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We expect many more deals of this sort to happen in the coming months as leading companies seek to reassure their investors that they understand the need for healthier foods.
For entrepreneurs, there has never been a better period to venture into the space of food brands. There is a window of about 3 to 5 years to launch and scale new healthy food brands and then to meet the growing demand in M&A in this space.