By: Jeffrey Klineman
With a specialty in handling the kinds of emerging brands that are typically found sampling out of their booths at Natural Products Expo West, the more than 100 different fundraising rounds handled by food-and-beverage specialty law firm the Giannuzzi Group alone should serve as a fine indicator of the investment buzz that surrounded the event.
But there was more than just that firm trying to win the notice of brands during Expo West, which concluded Sunday, March 8 in Anaheim, Calif. Investment banks Silverwood Partners, Houlihan Lokey, Piper Jaffray, crowdfunder CircleUp, and many more firms on the transaction end of the business courted potential clients through a series of parties and sponsorships, while consumer product-focused private equity funds like ACG and VMG also put their dollars into attracting potential brand investments by entertaining convention-goers.
The hyper-charged environment for investment lent a crowded, almost frenzied feel to the event and the boozy nights that followed, particularly during Expo’s Friday opening, when many potential investors rushed across the floor to attempt to unearth potentially winning brands in need of growth capital. As one longtime investor explained, for an event that may have been spawned by the counter-culture, he no longer felt out of place in a sport coat.
Despite that environment — discussed by BevNET correspondents Jeffrey Klineman and Ray Latif in the video below — the weekend passed without a major beverage transaction in the days immediately preceding or during Expo West. Juice maker Suja did convert a round of $23 million in private equity toward the end of 2014, but the most significant market-making event leading up to Expo West had come on the food side, with Hershey’s purchasing meat snack maker Krave Jerky for a reported $200 million.
Meanwhile, downplaying whispers that his appearance at Coke’s recent Venturing and Emerging Brands (VEB) conclave as a keynote speaker might mean that Suja was on the block, CEO Jeff Church told BevNET that the company was not for sale.
Despite the lack of a signature beverage transaction to fuel speculation and envy, the weeks leading up to Expo West saw several small transactions, as discussed above, as well as a mini-merger between organic juiceries Project Juice and Ritual Wellness.
Still, the apparent ready availability of funding from the investor population certainly didn’t result in cash raining on the brands in attendance — with so many companies having entered the natural food and beverage space in recent years, there were plenty of horses to bet on. With brands often underestimating their working capital needs, no matter the excitement, there was, for the money players, lots of due diligence left to be done.