Monitor: Hindsight isn't 20/20 for natural products industry investment in 2020

Quantifying natural products industry investment activity during 2020 reveals few easily deciphered story lines as connections between cause and effect are not always obvious.

Rick Polito, Editor-in-chief, Nutrition Business Journal

March 11, 2021

4 Min Read

Natural Products Industry Health Monitor, March 12, 2021

A global lockdown might make weeks feel like months and months weigh like centuries, but business allows little room for ennui. As distracting as the daily inundation of the negative can be, the time to look forward is always now. In this feature, New Hope Network provides that right-now-right-here update. Look for the Industry Health Monitor every other Friday to learn the major news that is affecting the natural products market immediately and the less obvious insights that could dictate where the market may struggle or thrive in the months to come.


Consider this: Drawing lines when the lines get blurry

Whoever came up with the adage “hindsight is 20/20” never lived through 2020. Moving into a second year of the COVID-19 pandemic, we can look back at how naïve we were and still it’s not always easy to draw clear lines between cause and effect from the tidal wave of change that washed over the natural products industry.

The picture gets even blurrier when we look at natural products industry investment activity.

Stand back far enough and the Himalayas look like speed bumps. Even if we step back just a year and two months, the impact of the pandemic on natural products industry investment is less than obvious. The Nutrition Capital Network tracks investment activity in the natural products industry, and a look at the number of mergers, acquisitions and financings doesn't look that different from December 2019 to January 2021.

Take another few steps back to take a broader view and the arc of natural products industry investment activity looks smoother still. Tracked by trend, and excluding 2019’s spiking exuberance around CBD, we see evolution and not disruption. Take away that pandemic 2020 hindsight and it looks like business as usual in the long term.

NCN data does reveal that mergers and acquisition slowed in 2020, especially in the first half of the year when the business world was adjusting to life on the Zoom continuum and devising new ways to make due diligence and deal negotiations happen. Looking back further, though, we can see that M&A activity deceleration was already underway. NCN also tells us that fewer new companies were entering it’s view, possibly meaning business plans got delayed or they simply postponed the hunt for cash.

But each deal and delay is a separate story, and there is no COVID-19 lens that lumps those stories into the same plot outline.

When NCN pulls reported health, nutrition and wellness financings out by category, comparing the first two months of the year for 2019-2021, few COVID-19 story lines emerge. CBD mania was already slacking in 2019 and it fell off the cliff in 2020, but blaming that on the pandemic is a stretch. That many millions of us spent a year stapled to the couch could explain investment interest in technology and delivery systems, but it’s not immediately obvious why precision farming technology and biotech that includes lab-grown meat would be more attractive to investors because everybody was working from home and watching Netflix. Not every story is a COVID-19 story; and you can't see the forest or the trees when COVID-19 obscures the picture so completely.

The truth has long been that complex situations should defy simple explanations and no matter how profound a big picture the pandemic provided, that big picture doesn’t layer over the small segments like tracing paper. Right now, we might have to accept that hindsight isn’t always 2020.

Even when what’s behind and in sight is 2020.

Enjoy this: Last pictures shown

Go online and you can get a time capsule glimpse of pre-pandemic life through shared camera rolls. News organizations like NBC and other sites are asking people to look for the last photo they took before the world lurched into the COVID-19 era. 

last photo taken

About the Author(s)

Rick Polito

Editor-in-chief, Nutrition Business Journal

As Nutrition Business Journal's editor-in-chief, Rick Polito writes about the trends, deals and developments in the natural nutrition industry, looking for the little companies coming up and the big money coming in. An award-winning journalist, Polito knows that facts and figures never give the complete context and that the story of this industry has always been about people.

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