2024 M&A Activity Could Propel the Next Generation of CPG Brands
As forecasters predict an uptick in M&A activity, catalyzed by the post-pandemic recovery, it is an opportune time for investors to position themselves in the hunt for the next big player in the CPG domain.
The signs are clear: brands whose offerings align with the growing consciousness around health, sustainability, and convenience are increasingly becoming attractive acquisition targets.
2024 appears to be the tipping point where several household names will have completed their metamorphosis from promising start-ups to iconic brands, giving way for new entrants to capture the essence of evolving consumer preferences.
The question is, who is the next unicorn brand emerging in the space, and how do you spot the potential early?
Size the Market Opportunity and Growth Potential
Understanding the magnitude of the ocean you’re swimming in is vital. The market opportunity for any prospective investment in CPG should be assessed with diligence. NielsenIQ data can provide insights on sector growth and market dynamics, helping to contextualize the potential future unicorn’s place within it.
Market opportunity is not static; it’s dynamic, shaped by numerous factors such as changing consumer behaviors, technological advancements, and global economic shifts. Therefore, consistent monitoring and trend analysis are required to ensure that you’re not just evaluating current opportunities but sizing up the long-term growth potential.
It’s helpful to invest in data that can also answer questions such as:
- How many new categories has the wellness attribute expanded to where it’s gaining new exposure and mainstream visibility?
- How many brands sell a product in a particular wellness space where competition may already be stiff if there isn’t a clear point of differentiation?
- How many households buy products with a particular wellness claim, and do they repeat their purchases or exit the market after trial?
Uncover Opportunities Earlier
The early bird may catch the worm, but in the venture capital world, the early investor reaps the benefits. So how does one uncover these budding opportunities before they’re splashed across mainstream media?
Engaging with industry experts, establishing a strong network, and becoming an active participant in industry conferences and events can provide a great foundation, but for those want a strategic edge, leveraging data analytics to spot patterns and anomalies in sales and consumer preferences can be a source of predictive insight.
Health and wellness consumer needs often extend beyond traditional marketing claims. The next evolution of identifying health and wellness trends requires ingredient data to uncover the full picture.
For example, revisions to the nutrition facts panel provide discerning shoppers more information about added sugars. Halo Top built a brand new segment within the ice cream by replacing traditional sugar with erythritol to appeal to shoppers seeking lower sugar indulgences. Similarly, companies spanning beverages to meal replacement bars are exploring alternative sweeteners like stevia and monk fruit to stay relevant with sugar-reduced options.
Understanding emerging ingredient trends and a brand’s label transparency can help identify opportunities earlier before they’ve reached mainstream appeal.
Efficiently Narrow the Search
Companies that operate a single brand are often attractive acquisition targets. Yet with hundreds of thousands of CPG brands and new ones launching every day, keeping tabs on all of the independent brands through traditional reporting can be cumbersome.
NielsenIQ developed a unique report solely for the purpose of monitoring independent challenger brands so businesses looking for attractive investments or acquisitions can spot those growing fastest, gaining share and distribution, and poised to break out.
With the ability to customize the report by attribute such as vegan chocolate brands or plant-based meats, it’s a cheat sheet for keeping an eye on the fastest emerging brands.
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Health and Wellness Expected to Continue Driving Investments in 2024 and Beyond
As we enter a new endemic-minded phase, it’s important to understand that consumer growth is now polarized. For companies looking for ways besides price to attract customers, health and wellness affiliated items are quickly filling that need as businesses reinvent their portfolios and forge new strategies to navigate the new needs, priorities, and preferences of this new consumer landscape.
NielsenIQ, the industry leader in measuring health and wellness products from CPG companies, leverages ingredient data and package claims to track comprehensive data so companies can spot emerging trends early and the brands driving the growth.
That’s why we recommend checking out Byzzer. With Byzzer, empowers investors to measure a brand or category’s sales and growth by product attribute, optimize your assortment to meet preferences, capitalize on new opportunities, provide the best packaging details, make the correct attribute claims, and excel as a CPG brand as wellness becomes mainstream.
