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Nutritional supplements might be an M&A bright spot.

The space, which has seen a variety of different deals over the years, including Unilever’s recent acquisition of a majority stake in Equilibra, which makes personal care and nutritional supplements, is likely to host more deals going forward, experts said.

“As a space, supplements [and] wellness are very fragmented,” said Coye Nokes, partner at OC&C Strategy Consultants. That, combined with growing interest in the products from consumers, is likely to lead to more deals, she said.

“A lot of it does come from this focus on lifestyle and nutrition we’re seeing with consumers across the board really understanding that what you eat and if you get exercise and a good night’s sleep…that has a major impact on how you look on the outside, and it’s not just about what cream or serum or sheet mask you use,” said Sarah Jindal, senior global analyst, innovation and insights, beauty and personal care, at Mintel. “From a consumer stance, there’s a lot more understanding and comfort with these beauty supplements.”

“Supplements are a natural extension for strategics focused on developing their beauty and wellness portfolios, just as natural beauty and personal care is,” said Susan Roddy, director at Houlihan Lokey. “It all speaks to the same highly attractive consumer looking for healthier and more holistic ways to approach care of themselves and their body.”

There have been a handful of other transactions in the space recently. Hum Nutrition, which makes beauty and other nutritional supplements, raised $5 million in late 2017 from investors that included CircleUp Growth Partners, Natalie Massenet and Nick Brown’s Imaginary Ventures, and Strand Equity Partners. Care Of, which takes customers through an online quiz before sending out personalized vitamin packs, raised a $12 million Series A in 2017. Rituals, another vitamin start-up, raised a $10.5 million Series A from Founders Fund, also in 2017.

Those start-ups, plus brands like Olly, which has a strong voice, or Goop, which makes vitamin packs aimed at specific needs, will continue to drive investor interest, according to Nokes. She noted that the supplement space historically has lacked strong brand identities and voices, but with some of the new brands, that is starting to shift.

“You see a lot of the beauty brands have supplements now, too,” she noted. “The line is blurring. That’s part of what is generating the interest.”

“Beauty from within” has had a few false starts over the years, but timing is ripe for consumers to grow this into a real category with staying power,” Roddy said. “We’re already seeing retailers respond, with stores like Sephora offering over 65 types of beauty supplements online and Anthropologie curating a separate wellness section on their web site.”

For Unilever, the investment in Equilibra gives the company a “leading player” in the Italian nutritional supplement space, but it also underscores CPG interest in supplements and wellness broadly. And while Unilever, a CPG giant with a big beauty and personal-care focus, is taking in a supplements operation, for other players, acquisitions in the space likely depend on synergies — like distribution, Nokes said.

“One of the things Unilever has been doing, and a lot of people have been doing, is moving into more of a natural space,” Nokes said, noting the company’s acquisition of better-for-you home supply brand Seventh Generation. “Bringing together this health and wellness view on the more natural side…if you think about who is likely to be your consumer, you’re likely to have a lot of overlap when you think about who is interested in these things, and that’s the way a lot of these consumer companies are thinking.”

“Traditional beauty [brands] are all expressing some interest in the area, and it doesn’t surprise me — you’re talking about companies that don’t have expertise in [vitamins and supplements],” Jindal said. “They’re just trying [right now] to figure out if it makes sense for them as a brand [to invest or acquire].

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