As we recently documented in our roundup of the biggest wellness investments of 2019, the wellness industry continues to draw interest from venture capitalists, private equity firms and angel investors, all of which are injecting cash into the $4.5 trillion mega-industry.
And, despite the economic roadmap looking uncertain for the next 12 months, with Brexit looming, the mounting consequences of climate change, and a rise in social unrest, the first week of 2020 has already spawned some significant wellness investments, highlighting the ongoing opportunities to be found within this high-growth market.
From the $70 billion sleep sector to the rapidly growing alcohol-free spirits category, these wellness trends are already proving lucrative in 2020……..
Sleep: Cartesian Capital invested $24 million in Simba
Online mattress retailer Simba announced the raise of $24 million in the form of debt and equity from global private equity firm Cartesian Capital, just a couple of days into the year.
The three-year-old sleep tech startup revealed it would be using the fresh capital to fund growth in key markets, accelerate business in Canada and fuel expansion in China.
Despite the brand slashing its valuation from £200 million to £20 million to secure the new funding, Steve Reid, CEO at Simba argued that 2019 had been a transformative year for the business.
“We focused on disciplined growth, both in the UK and globally, which has paid off,” he revealed.
Adding: “This year Simba achieved UK profitability whilst delivering significant global EBITDA improvements, and we are now in a position where we are primed for profitable growth on a global scale.”
Having unveiled a new sleep performance app and notching up sales of 750,000 sleep tech products worldwide, the brand has also been able to expand beyond the realm of online mattresses, mirroring a similar move made by competitor Casper.
By positioning itself as a lifestyle brand centred around sleep, the hope is that is can capitalise on rising demand from health-conscious consumers who are increasing their spend on sleep-related products.
The sleep industry is currently on track to hit $101.9 billion by 2023, so we predict this will be the first of many investments in the sector this year.
Plant-based: Beverage maker OWYN raised $7.5 million
Plant-based beverage maker OWYN demonstrated the continued onslaught of activity within the plant-based F&B category by securing $7.5 million in a financing round led by Powerplant Ventures.
According to the two-year-old company, the investment will not only provide it with additional capital to continue accelerating its growth within retail propositions but also bolster hiring across its sales, e-commerce and managerial teams.
“We are really proud of what OWYN has accomplished to date. Bringing on PowerPlant Ventures, with its deep experience in plant-centric food and beverage, complements our existing group of high-profile investors and partners and is an exciting endorsement of our brand, products, and growth trajectory,” said Mark Olivieri, President of OWYN.
“Collectively, we remain committed to providing consumers with great-tasting protein drinks that provide the nutrition and sustainability benefits of being 100% plant-based. This investment comes at the right time as we further expand our go-to-market resources to capitalise on our rapid growth trajectory,” he added.
Powerplant co-founder and partner Mark Rampolla, who will join the brand’s board of directors told BevNET that the brand checked a number of “really important boxes,” including strong velocities, great retail presence and having a product that was free of most major allergens that was presented in a “cool, approachable, mainstream way.”
“Ultimately we’re buying into a strategy that is pretty clear,” he explained. “They’ve got a balanced, rational strategy around building out select DSD markets. That’s a strategy I love and want to support.”
Having generated approximately $50 million in retail sales in 2019, up from around $20 million in 2018, the brand projects 2020 retail revenue of $90-$100 million, as demand for plant-based products continues to boom.
A recent report by BIS research predicted that the plant-based market will reach $480.43 billion by 2024, with additional research by Mintel touting concern for the environment, health and wellness, ethics and diversity in protein sourcing as the key factors continuing to drive the growth of plant-based eating over the coming months.
Alcohol Alternatives: Diageo invested in alcohol-free spirits brand Ritual Zero Proof
Ritual Zero Proof, a spirit alternative that echoes the taste and smell of spirits, also announced investment, as sales of alcohol alternatives continue to rise across the globe.
The undisclosed investment from global beverage giant Diageo has been earmarked to drive Ritual’s growth in the US, investment in its direct-to-consumer business and to support its entry into retail.
Alongside the cash investment, Ritual founders will also have access to support from Diageo’s Distill Ventures, a platform which helps startups and entrepreneurs to create the global drinks brands of the future.
The startup, which claims to meet growing consumer demand for a complex, flavourful and interesting alternative for people who are choosing not to drink, joins British brand Seedlip under the Diageo umbrella. Last year, Diageo acquired a majority share in the trendsetting non-alcoholic spirits brand, which is stocked in over 7,500 of the world’s best bars, restaurants, hotels and retailers.
According to a 2019 Distill Ventures data study, 58% of consumers are drinking more no-and low-abv drinks than last year, and 55% of the most influential bartenders in New York, Los Angeles and London believe the no-and low-alcohol trend will continue to grow within the next 12 months.
“This is a movement,” argues Marcus Sakey, founding partner and chief brand officer of Ritual Zero Proof.
“Just like almond milk and veggie burgers, spirit alternatives are changing the landscape. In 18 months, we predict non-alcoholic options will be on every menu and the shelves of every grocery store. Americans want more choice, and Ritual Zero Proof is all about more – more flavour, more moments, more life.”
Launched last September, Ritual sold out of its projected six-month supply of product in just five weeks. And with recent research by Nielson revealing that over a quarter of shoppers say that they are looking to cut down their alcohol consumption, in 2020 the category is predicted to gain appeal across various channels.