Some of the primary growth drivers include:
- Immunity boosting foods are trending favorably as consumers seek to balance physical and mental well-being. The demand for processed products has declined due to a flourishing market for foods free from additives and fillers.
- Millennials are becoming an increasingly influential demographic as they expect transparency and prefer naturally healthy, organic, locally sourced, and sustainable foods.
- The regulatory environment is stimulating demand for wholesome products. Governments around the world are establishing new dietary guidelines and enacting new laws governing nutrition requirements and food claims to help consumers make more informed food choices.
- Consumer preferences and demand have led companies to place increased importance on food safety and traceable supply chains in order to succeed in a competitive, post-COVID marketplace.
These drivers are expected to support growth trends which will enable the industry to surpass $1 trillion in market size within the next decade. The Health and Wellness industry is estimated at $764.2 billion in 2020 and is projected to reach $1.1 trillion by 2027, representing a 4.8% compounded annual growth rate (CAGR). Currently, naturally healthy, functional foods, and better-for-you products are a few of the top-performing categories.
We expect investment activity in the health and wellness industry to remain robust. Health-focused brands will become sought after targets as companies look to accelerate market penetration in trending categories and fulfill the growing demand for immunity-boosting foods. Large food and beverage companies are pursuing strategic partnerships, acquisitions, and repositioning brands to maintain leadership. PepsiCo, Hershey, Lotus Bakeries, Midsona, The Livekindly, Conagra Brands, Royal Wessanen, Danone, and Keurig Dr. Pepper are active players in the Health and Wellness space. Financial sponsors have also been active and are ready to deploy capital into health and wellness brands to build growth platforms and capitalize on consumer trends.
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