Consumer Sector Innovations Embrace Healthcare and Technology In Exciting New Products

As we look forward to 2023, we believe that innovation, new deal opportunities, and emerging segments will drive interest in the consumer sector. We expect both established and new participants will have ample opportunity to deploy capital in this space. The world of plant-based foods continues to proliferate, as new crops, formulations, and ingredients make their way into packaged consumer goods. These revolutionary products continue to evolve and will drive growth as shoppers experiment and purchase the next new food or beverage offering.

The economy has impacted producers and consumers alike, albeit in different ways. Costs have meaningfully increased but are expected to abate. Profit margins have been impacted, however consumer spending is expected to remain healthy without much price elasticity. The consumer focus on healthy living via new foods, beverages, personal care, and beauty products is expected to remain robust. However, it is worth noting that economic downturns have historically correlated with consumer preferences for products such as alcoholic beverages and indulgent snacks. Consequently, the tension between healthy versus indulgent preferences should create much innovation.

The next new revolution we may witness is “food as medicine.” Sharply higher health care costs may shift focus to better outcomes with nutrition and food. New technologies across a variety of segments—from the soil to the fork—and from the lab to the table—will surely continue the momentum.

The consumer will be the ultimate judge in these processes. We believe that in 2023 healthcare and technology will converge with consumer preferences in ever more novel and innovative ways. At Oppenheimer, given our focus on the middle market and emerging growth segments, we expect to see much opportunity as we bring our capabilities to consumer sector clients.