OWYN could be a tasty target for strategics
Major food strategic buyers have the protein shake brand Only What You Need on their radar, OWYN CEO Mark Olivieri tells Axios.
- "Strategics also have data access and see our numbers," Olivieri says, adding, "I'm getting inbounds all the time."
Why it matters: Food and beverage conglomerates have demonstrated an appetite for protein shakes and powders, as evidenced by Nestlé's majority acquisition of Orgain earlier this year. (Orgain was reportedly valued at around $2 billion.)
State of play: OWYN ranks behind U.S. protein shake brand leaders BellRing Brands' Premier Protein, PepsiCo's Muscle Milk and Coca-Cola's Core Power (under the Fairlife brand), per Olivieri.
- PepsiCo purchased CytoSport, which includes Muscle Milk and Evolve, from Hormel in 2019 for $465 million.
By the numbers: OWYN generates north of $100 million in sales, Olivieri says. One-third is attributable to e-commerce, with the rest being retail.
- It is growing more than 50% year over year, which doesn't include the potential for new products such as meal replacement or new distribution channels.
- OWYN also has a 54% customer retention rate.
- The average valuation multiple for a business such as OWYN since 2006 has been 4.6x trailing 12-month net revenue, Olivieri says.
- A strategic acquirer would likely value OWYN at around 4.5x TTM net revenue, or 15x gross margin, according to the executive.
How it works: OWYN sells protein shakes, protein powder and pancake and waffle mixes that don't contain top allergens like dairy, gluten, soy, egg, peanuts, tree nuts, fish or shellfish.
Flashback: OWYN raised a round of an undisclosed size in July led by Purchase Capital, with Hammock Park Capital and existing investor PowerPlant Ventures also participating.
- A year ago OWYN sold a majority stake to United Nutritional Brands, an investment firm headed by Nicholas Singer and backed by Purchase Capital.
- "We operate very efficiently," Olivieri said, declining to disclose how much the company has raised.
- "In the beverage space (there are) these headlines of $50 million raises, $100 million raises. I can tell you OWYN is never going to have that headline."
What they're saying: Purchase Capital-backed OWYN could fit well into portfolios of companies like BellRing Brands, PepsiCo, Nestlé and Coca-Cola, both in terms of the startup's products and distribution channels, Olivieri says.
- "I believe there will be a long-term partner because of the interest we have and because these portfolios need to evolve," he says. "With having great economics and a path, you have optionality, whether it's a strategic or being able to control your own destiny."
- The company has not yet hired an investment bank.
What's next: The company now has a meal replacement beverage that will be available for sale in Publix Super Markets, to take on brands such as Ensure and Boost, Olivieri says.
- After selling primarily DTC, it's also expanding into the club channel, via BJ's Wholesale Club, as well as direct store delivery (DSD).