All Access

Retail Deals

Standard

Retail Deals Alerts

Alert

Retail Deals Thought Bubble

Thought Bubble

mustard

BFD Expert Voices - Retail Deals

BFD Expert Voices

topics

politics-policy

epstein-files

donald-trump

2026-midterm-elections

immigration

behind-the-curtain

race-and-equity

technology

privacy-tech-regulation

automation-and-ai

tiktok-news

big-tech

social-media

cybersecurity

economy

social-security

inflation

tariffs

federal-reserve

jobs

transportation

business

stock-market-news

retail-news

crypto

media

elon-musk

dealmaking

health

rfk-jr

drug-prices

axios-explains-abortion

public-health

world

israel

axios-explains-ukraine

iran

russia

china

energy-climate

nuclear-energy

climate-energy-policy

climate-change

extreme-weather

alternative-energy

electric-vehicles

science

emerging-tech

biomedicine

newsletters

pittsburgh

atlanta

san-diego

charlotte

boulder

washington-dc

kansas-city

dallas

denver

detroit

des-moines

austin

boston

chicago

cleveland

columbus

houston

indianapolis

miami

nashville

new-orleans

nw-arkansas

philadelphia

phoenix

portland

richmond

salt-lake-city

san-antonio

san-francisco

seattle

tampa-bay

twin-cities

raleigh

huntsville

axios-local

axios-pro

axios-live

the-axios-show

The rise of drugs used for weight loss like Ozempic will drive investment and dealmaking in vitamins and supplements, per an XRC Ventures report.

Why it matters: Leading strategic buyers are likely to turn their attention to non-prescription weight loss alternatives next.

The big picture: Increased demand for GLP-1s, which are both costly and in short supply, has prompted an emergence of alternatives that suppress appetite or provide additional nutrients that one might've missed from eating less.

These are particularly attractive M&A targets for companies like Nestlé and Unilever, says XRC Ventures general partner Diana Melencio.

State of play: The two have become the biggest acquirers in the vitamin, minerals and supplements space.

Unilever acquired Italy's Equilibra in 2018 and OLLY in 2019; in 2020, it scooped up Liquid IV and SmartyPants.

In 2022, Unilever acquired a majority stake in hair wellness product provider Nutrafol.

Nestlé acquired Garden of Life parent Atrium Innovations in 2017 followed by Bountiful Company, The Better Health Company, hydration startup Nuun, and Vital Proteins.

Between the lines: M&A activity in the space slowed last year, due in part to a pullback from these two strategics as they worked on integrating these transactions.

However, strategic incumbent acquirers like Church & Dwight will make up the gap in Unilever and Nestlé's M&A slowdown, Melencio says.

Large beauty conglomerates are also showing interest, especially in ingestibles as a way to improve skin and health, she adds.

What they're saying: "If founders manage to find the right balance of IP and growth, particularly at retail, the appetite from strategics for these companies remains strong," the XRC report finds, citing conversations from industry leaders.

As consumers become more savvy and do their research, "they're coming to the marketplace far more informed than they were before," Melencio says.

Efficacy and brand resonance are what Melencio looks for as an investor.

Zoom out: About 82% of U.S. consumers say wellness is a top priority in their everyday lives. The Gen Z and millennial cohort are spending more on wellness products and services than older generations, per the XRC report.

Yes, but: It's not all rosy for the sector. Vitamin and mineral supplement subscription provider Care/of said it was shutting down last month.

"Branding and design and company ethos, all of which are important, I think are not enough," Melencio says.

It's also a struggle for new brands compared with makeup, for instance, because you typically can't see immediate results; it takes time.

What we're watching: XRC is spending time looking at different form factors for the absorption of vitamins, supplements and nutrients, too.

"We've looked at everything from chocolate to the technology that does like the Listerine strips, to gums, to mints, to patches," Melencio says.

Vitamins, minerals and supplements set to drive next wave of investment

Strategics are paying more attention to the sector.

Illustration of a prescription bottle holding a glowing sun

Retail deals

The rise of drugs used for weight loss like Ozempic will drive investment and dealmaking in <a class="gtmContentClick" data-vars-link-text="vitamins" data-vars-click-url="https://www.axios.com/pro/retail-deals/2024/06/12/rootless-raising-over-1m-seed-crowdfunding" data-vars-content-id="a80bf5f8-63c0-49df-8b3d-97ba4453c748" data-vars-headline="Vitamins, minerals and supplements set to drive next wave of investment" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/retail-deals/2024/06/12/rootless-raising-over-1m-seed-crowdfunding" target="_self">vitamins</a> and supplements, per an <a class="gtmContentClick" data-vars-link-text="XRC Ventures report" data-vars-click-url="https://xrcventures.com/consumer-vc-benchmarks-2q24" data-vars-content-id="a80bf5f8-63c0-49df-8b3d-97ba4453c748" data-vars-headline="Vitamins, minerals and supplements set to drive next wave of investment" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://xrcventures.com/consumer-vc-benchmarks-2q24" target="_blank">XRC Ventures report</a>.Why it matters: Leading strategic buyers are likely to turn their attention to non-prescription weight loss alternatives next.

Vitamins, minerals and supplements set to drive next wave of investment

What to read next