Vitamins & Supplements M&A Update – May 2023

Vitamin & Supplements M&A Moderates Slighly, Demand Remains Robust for Differentiated Health and Wellness Products

Capstone Partners latest Vitamins & Supplements M&A Report showcases the sector’s resilience amidst inflationary pressures. While discretionary spending has pulled back in many categories, consumers continue to embrace the Vitamins & Supplements sector as a staple in their purchasing behavior. The aftermath of the pandemic has triggered a shift in consumers’ health routines, with a growing preference for all-natural vitamins and supplements devoid of artificial additives. In response, transparency in ingredient sourcing has become a prevailing trend, with consumers increasingly demanding substantiation for product claims. This has created a buyer universe that seeks science-backed providers of vitamins and supplements, particularly those catering to areas like Immune Function, Cognitive and Mental Well-being, and Digestive Health, which have garnered significant consumer interest.

Economic uncertainties have engendered some caution in the M&A market, leading to a modest slowdown in Vitamins & Supplements M&A year-to-date (YTD)—though activity remains healthy. Buyers have exercised patience, awaiting greater visibility on interest rate trajectories and the efficacy of the Federal Reserve’s monetary tightening campaign. Concurrently, prospective sellers have sought increased market transparency to secure optimal value and favorable transaction structures. While M&A headwinds are expected to persist in the short term, the potential pause in interest rate hikes over the next few months could provide the impetus for a resurgence in transaction activity.

Also included in this report:

• How growing demand for ingredients transparency & claim substantiation is reshaping demand—and activity—in the sector.
• Examination of active acquirers in the space and their current criteria for identifying acquisition targets.
• Analysis of sector M&A revenues, EBITDA purchase multiples, and key valuation drivers for middle market businesses.

Capstone Partners’ Consumer Investment Banking Team provides M&A, capital formation, and financial advisory services to the owners of middle market businesses in the consumer and retail industries. Our team partners with leading mid-to-large sized consumer businesses that serve growing end-markets. For more information on the Vitamins & Supplements M&A trends featured in this report or to speak with one of our Consumer Investment Banking Team members about how to grow, value, and/or sell your company, we are here to help. Contact us today to start a conversation.