Raising Capital in the Nutrition Industry

LAS VEGASEven as the economy faces growth challenges, the nutrition industry is still posting growth rates in the high single and low double digits, depending on the specialty segment; however, what do companies need to do to make their growth opportunities resonate with the investment community? That was the question debated by a panel of experts including Steve Allen, Nestle; Joe La Placa, DSM Nutritional Products; Johann F. Tergesen, Burcon NutraScience; and Thomas Aarts, Nutrition Capital Network at SupplySide West on Nov. 12.

LaPlaca started things off with a discussion of what a nutritional ingredient supplier is looking for, noting its innovation, as well as the need for products that address consumer concerns and have scientific substantiation. Tegesen spoke next, providing examples of balance sheets to underscore his key point: There are a variety of financing options available to you, and the one you put in place must fit with the balance sheet of the company youre financing. Finally, Allen gave a review of some of the important points companies should consider when looking for financing, including uniqueness (what is the point of differentiation); insulation (is it protectable and for how long); economic potential (how much money can we make); the team (who is on board, and what successes do they bring to the table); and intangibles, or a wow factor.

Following the brief presentations, the 75 attendees participated in an active dialogue, exploring issues including the continued influx of capital to biotech, the possible opportunities ahead for cosmeceutical ingredients, and the question of what might attract foreign investors.