Canaccord Genuity on Consumer & Retail -- Health, Wellness and Lifestyle: M&A and Growth Shines at Expo

April 4, 2012 12:44 PM EDT Send to a Friend
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Canaccord Genuity on Consumer & Retail -- Health, Wellness and Lifestyle: M&A and Growth Shines at Natural Products Expo West Trade Show

Analyst, Scott Van Winkle, found three themes at the Natural Product Expo trade including: 1) rising consumer demand; 2) innovation to support continued growth; and 3) capital inflows that will facilitate future growth.

Van Winkle said, "We believe that the industry will sustain a growth rate in the 8-10% range and we expect the valuations upon exit for investors will remain robust."

On M&A, "It appears that a new cycle may be underway in both food and supplements with big acquirers such as General Mills (NYSE: GIS), Pfizer (NYSE: PFE) and Procter & Gamble (NYSE: PG) highlighting recent deals. There is cheap capital for the multinationals, there is no growth in the traditional food industry yet considerable growth in natural/organic, and the private equity investment over the last five years has created a slew of good-size assets with investors seeking an exit."

Van Winkle also notes that the supplement sector is growing and total valuations in the natural/organic sector are at all time highs.

Canaccord maintains a 'Buy' on Whole Foods Market (Nasdaq: WFM), United Natural Foods (Nasdaq: UNFI), Hain Celestial (Nasdaq: HAIN), SunOpta (Nasdaq: STKL) and Inventure Foods (Nasdaq: SNAK)


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