The Natural Products Expo West trade show in Anaheim, CA was back in full force in 2023, its second year in-person since the 2020 – 2021 pandemic hiatus. The show was heavily attended with over 67,000 participants, however, those impressive numbers are still below the pre-pandemic record of over 80,000 participants. It was an exciting four days filled with meetings and bustling expo halls where attendees visited exhibitor’s booths – sometime shoulder to shoulder. Despite some disruption caused by the breaking news regarding Silicon Valley Bank’s downfall, the tradeshow lived up to its reputation as the “Super Bowl” for the natural consumer products industry.
The Intrepid Food, Beverage & Agriculture investment banking team based in Los Angeles, CA went down to Anaheim to participate in the show and meet with members of the food, beverage, and agriculture ecosystem and business community. After four full days of meetings, exploration of the expo halls, and great conversations with exhibitors, it was clear that sustainability was the show’s overarching theme across product categories. While personal health and better-for-you themes have always been core to the show, we saw wide ranging sustainability initiatives that focused on not only bringing forth environmental solutions to the marketplace, but also addressing social issues.
For the first time in Expo West history, there were 29 exhibitor booths for regenerative products. Regenerative Organic Certified is a revolutionary new certification for food, fiber, and personal care products that assures shoppers that their purchases make a positive impact at every level: environmentally, ethically, and socially. We stopped by a few of those booths and had some tasty samples of regenerative bison hot dogs at Force of Nature Meats and regenerative peanut butter fudge honeycomb ice cream at Alec’s Ice Cream. In addition to regenerative products, we noticed companies that designed and marketed food products as people-first. Companies such as Amazi Foods and Seattle Chocolate Company aim to ameliorate social issues such as combating poverty in rural communities by building sustainable and equitable supply chains.
Certain companies played on multiple trends surrounding sustainability and better-for-you themes. A prime example of this is RIND Snacks. RIND’s dried fruit snacks are made from whole fruits – peels and all, play on sustainability by decreasing food waste from overripe fruits and peels, plant-based snacking, clean ingredients, and mission-driven values by combating childhood hunger through donating their nutritious snacks to children in underserved communities.
As it relates to emerging product categories, we would be remiss not to mention the abundance and variety of ready-to-drink, non-alcoholic products present at the show. Post-pandemic, many consumers are actively looking to reduce their alcohol consumption after over imbibing while shut in their houses. In addition to more diverse non-alcoholic beer options such as Partake and alcohol-free liquor alternatives such as Ritual Zero Proof Spirits, ready-to-drink tonics and seltzers were in attendance. Products packed with bold flavors and aimed at the consumer that is looking for a fun non-alcoholic drink to have with dinner, sip at a party, or enjoy at a casual event were all around the show. We stopped by hiyo’s booth and had a refreshing taste of their watermelon lime sparkling social tonic, and at The Spare Food Co.’s booth for a sip of their probiotic, passion fruit and yuzu tonic.
Lastly, vegan and plant-based products continued to take a lot of the expo halls’ real estate with a total of 1,118 booths. However, it seems that we have now entered a 2.0 plant-based phase, in which products need to be tasty, innovative, sustainable, and mission-driven. Plant-based companies need to have a special edge or customer appeal to thrive in the face of heightened competition. We tried some interesting and innovative seafood alternative products such Jinka’s plant-based calamari and Konscious Foods’ frozen, plant-based California rolls.
In conclusion, below are the key takeaways from the Intrepid Investment Bankers Food, Beverage, and Agriculture team:
- Emerging and innovative food companies continue to be a vibrant part of the ecosystem, despite the challenges of the pandemic, supply chain disruptions, and inflation as evidenced by continued strong exhibitor demand and attendance at this year’s Expo West
- Sustainability, mission-driven, and bold flavors are growing trends that tap into Millennial’s and GenZ’s more discerning consumer preferences prioritizing the planet, its inhabitants, and personal health without compromising on taste
- Both private equity investors and CPG strategic acquirers are hungry for M&A but taking a disciplined approach
- The market will continue to look to emerging companies such as those exhibiting at Expo West for innovation, but the bar will be higher and more focused, with greater emphasis on margins and path to profitability