Belgium-based Verlinvest is the investment company of the family behind brewing giant Anheuser-Busch InBev. Produced over 25 years ago, now Verlinvest has 28 brands in its portfolio and contains in excess of $4bn in capital under management.
Its most famous — or more correctly, infamous — brand is Oatly (currently worth more than $14bn since listing on the US Nasdaq stock exchange a month), in which it owned a 55.9% bet inside a joint venture before the IPO.
Verlinvest’s head of European food and beverage, Ben Black, told FoodNavigator that the group is considering long-term expansion opportunities offered by those tendencies supplying’more ethical, sustainable and healthy alternatives’.
“We believe those three consumer shifts will be pervasive,” he told us, adding that the investment vehicle’s focus is on manufacturers trying to drive mainstream intake towards more ethical alternatives that serve the needs of a new generation.
“We are very focussed on what the consumer wants, and those three trends and long-term consumer shifts are important for us because we’re in an incredibly interesting period of time where the large majority of brands that exist today have been built in the 20th century for the 20th century consumer, and that consumer has different needs. What we’re looking for is brands for the 21st century that serve the 21st century consumer. That consumer is younger and has a very different expectation of what they want from brands within food and beverage.”
He believes more people wish to buy green and ethical goods and are ready to pay more for these, and he is bullish on the prospects for socially-minded brands and entrepreneurs successfully capitalising on and forcing these trends.
“I’m hugely confident because that’s where I see the growth coming from. Brands that have those aspects are growing faster than the ones that haven’t,” he told us. “What you’re seeing is the larger FMCG strategics beginning to reorient themselves around those trends as well.” A very clear example is Unilever’s commitment to purpose-led brands. The FMCG giant is “an oil tanker of an organisation within food, but they are shifting the whole business towards this. I’m not looking for the oil tanker, but the speed boat that’s built around these values.”
Trend 1: Personalised nutrition
The primary area where nimble start-ups are active making waves concerns personalised nutrition. “We’re very interested in looking at options which help people understand their uniqueness and their own nutritional needs,” noted Black. “We’ve not yet seen personalised nutrition be adopted by the mass market so we’re very excited by brands that can help people understand their own specificities and be guided about what kinds of foods they should be eating to lead a healthier lifestyle.”
Personalised services generally command a higher price tag for shoppers. But customers are ready to pay premium in the place where they feel additional value, according to Black. “If they’re getting genuine benefit from personalised nutrition, I would feel confident that they would pay a premium to non-personalised nutrition.”
Trend 2: Plastic-free hydration
According to Verlinvest, the hydration trend promises to resolve two prescient issues: the issue of this dramatic rise in the creation of throwaway plastics that are neglecting to be contained, controlled, reused and recycled, and people’s desire to stay healthy. “We’ve been a very long-term backer of hydration trends and now we’re seeing a new generation of brands coming through who remove plastic. Plastic-free hydration takes away the need to shift water around the world that takes away the need for single use plastics,” explained Black.
Whilst not at the Verlinvest portfolio, one such brand which falls into this trend is German startup Air Up, which tastes water using scented atmosphere to fool your mind into perceiving a flavor, thus supplying a sweet taste without the sugar. The system entails a reusable water bottle — full of tap water to which you attach a scent pod which releases flavour in your mouth as you drink. Air Up has raised an $18m Series A funding round from investors such as PepsiCo and French foodtech investor Five Seasons Ventures.
Another German start-up that is expecting to interrupt the flavoured beverage sector is Water Drop. This alternative offers consumers flavoured capsules which they can add their water bottle. “This is a really exciting trend because it helps from a sustainability perspective but also helps from a health perspective as well. It allows for more consumption of water,” Black observed.
Trend 3: A return to supply chain integrity and provenance
Received wisdom states COVID has made people more aware of where their food comes from and what they are putting into their bodies. “This has led from our perspective to a return to interest of people buying local and fresh and becoming very interested in exactly where their food comes from,” Black informed us.
That means exciting times for heritage brands. Take tomato specialist, and Italy’s largest brand, Mutti. “We’ve seen a big boom throughout Covid in this business,” Black revealed. “It’s a multi-generational 100-year brand that has very specific sourcing criteria to improve the quality of their tomatoes. We see huge tick up in interest in this space as people look to really understand that they’re getting a quality and ethically produced product that also has good taste. That renewed consumer awareness of and very clear focus on supply chain ethics, provenance and localisation is something that we’re very excited about.”
He added: “We’re seeing an attraction to those brands that deliver indulgence with a degree of trust. We’re seeing particularly in southern Europe a lot of attention on family-backed brands that have been doing the same thing for many years.” Spanish tinned sardine producer Ortiz is therefore another fantastic example of a category-defining brandnew. “They are able to prove a level of trust and expertise that give people license to indulge.”