Consolidation expected to continue in the fragmented European botanical extracts market, largely driven by mid-tier ingredients players , according to a new study by Oghma Partners.
There are also the larger global ingredients players who are actively seeking out botanical extract companies to help diversify their offering beyond their core capabilities .
Furthermore, several private equity firms have a well-defined strategy to invest in botanical extracts producers that benefit from the favourable growth trends in nutraceuticals and the increasing preference for healthier food options among consumers.
Although approximately 60.0% of the deals were cross-border, Europe-based buyers drove the activity, accounting for around 80.0% of the total deal volume.
Botanical extract companies generally receive valuations at the higher end of the overall food ingredients market
Companies that produce botanical extracts for the nutraceutical and pharmaceutical industries usually command higher valuations than those that serve the food industry.
Oliver North, Associate Director at Oghma Partners, said: “Estimates for the size of the global botanical extracts market vary depending on definition. According to Precedence Research the global plant extracts market size in 2021 amounted to $10.2bn and is expected to reach $22.5bn by 2030. The botanical extracts market is being driven by factors such as changing lifestyles, consumer awareness, increased use of natural ingredient-based products and biotechnological breakthroughs.
“Botanical extracts are becoming increasingly popular in a number of industries, including food & beverage, cosmetics, perfumes, medicines, and nutraceuticals . On application basis, the food & beverage category held the largest market share with more than 45.0%.”