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The Fast Company Executive Board is a private, fee-based network of influential leaders, experts, executives, and entrepreneurs who share their insights with our audience.

3 industries ripe for acquisition in 2022

While most industries took a big hit from the pandemic, these three seem to be doing better than ever because of it.

3 industries ripe for acquisition in 2022
[aanbetta/AdobeStock Tierney/AdobeStock; Olesia/AdobeStock]

When facing a global health crisis, people’s priorities inevitably shift—not only in mindset but also when it comes to where they put their money. En masse, people started paying more attention to their health and well-being while outfitting their homes for increased daily use. What happened? Toilet paper, paper towels, and toothpaste flew off the shelves. Consumer electronics and home-related industries like construction and remodeling exploded.

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While most industries took a big hit from the pandemic, these three seem to be doing better than ever because of it:

1. E-COMMERCE

While Covid-19 hit brick-and-mortar shops hard, online sales excelled. In 2020, one report found the pandemic drove nearly three out of four consumers to shop more online and nearly nine out of 10 planned to keep up the habit. While people were leaving or losing traditional jobs, over 200,000 new third-party businesses became Amazon sellers. New stores on Shopify grew by 62% in one month, and the platform was seeing “Black Friday level traffic every day.” Many brick-and-mortar companies shifted to e-commerce models to survive.

Experts predict consumers will continue to turn from physical shopping and spend more money online, making this sea of new e-commerce brands prime for acquisition. In the past, people might have opted for the biggest brand available because they trusted the name but now, it’s personal. Consumers can choose from a vast selection of brands and their range of niche products that best fit not only their needs but their personality.

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Environmentally-conscious people may look for natural and organic products; teenagers may look for something new and flashy; new moms may look for something clean and soft. When shopping online, people have more time to choose a brand with greater personal alignment—a phenomenon connecting people with brands they love and creating a new level of brand loyalty that more prominent companies are hungry to buy.

2. SUPPLEMENTS/SKINCARE

Under the shadow of Covid-19 and a subsequent onslaught of media coverage, people began taking their health more seriously. Dietary supplement sales grew by 44% in the first wave of the pandemic, and multivitamin sales peaked in March 2020, up more than 50%. With technology empowering greater consumer awareness, what started as the search for “immune-boosting” protections to potentially stave off the virus soon became a broader desire to take control over more of our health from home. Collagen, zinc, vitamin D, hair, skin, and nails supplements—the more aware they became, the more they wanted to buy.

The pandemic also had people washing and moisturizing more, which prompted growth in cleansers and moisturizers, exfoliators, scrubs, and masks. By 2020, an estimated 40% of skincare users reported using products more often than the year before and most planned to stick with their new routine. In 2021, the global skincare market reported another surge in demand, with anti-aging and anti-pollution products like face creams and serums selling like crazy. Brands in these industries took on newfound affluence, and in response, big companies are going just as crazy in acquiring them.

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3. BEAUTY/PERSONAL CARE

Not only are beauty and personal care top-performing industries, but they’re also increasingly coming together into one massive market. When beauty shops and salons closed, people had to learn how to carry out more personal care at home, which required a new stock of massage lotions, hygiene items, waxing and shaving products (not only tools and treatments but pre- and post-care), etc. When we launched a skincare brand a few years ago, we had no idea the timing was perfect for it to blow up. People went crazy over their eyes—lashes, brows, and shadows—but the cosmetic that bombed during the pandemic was lip products because, for the most part, they stayed hidden behind a mask.

A 2021 McKinsey report found that in every market, consumers reported a significant increase in their prioritization of “wellness” over the past few years, defined as better medical health and fitness, nutrition, sleep, mindfulness, and appearance, including beauty and skincare products. Personal care went from routine cleansers and hygiene to supplements, serums, scrubs, beauty and cosmetics. Even categories like feminine care and sexual health now fall under the same wellness umbrella—a $1.5 trillion market with tremendous opportunities.

In helping small supplements and personal care brands emerge every day, my company often talks to leadership about these trends unfolding before our eyes. An exploding industry of aggregating companies has its sights on buying and scaling private-label brands. With $50 million, they roll up 10 companies at $5 million a pop, and the larger base of sales boosts that total worth up to $250 million. If your brand has a solid online presence and handles any of these trending products, it may soon be worth more than you ever imagined.

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Founder & CEO of Private Label Skincare Florida, one of the largest, fastest-growing manufacturers of organic skincare products in the U.S.

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