Bloated expectations and hype surrounding functional ingredients and foods is pushing up valuations of some companies in these sectors to "unrealistic" levels, according to Glanbia Nutritionals chief executive Hugh McGuire.
The firm, which has an euros80M war chest to spend on acquisitions, said teams on both sides of the Atlantic were evaluating investment opportunities. However, competition was fierce, said McGuire: "There is a lot of interest from private equity in nutritionals and that is pushing up valuations to unrealistic levels. I call it the hockey stick curve, where you see graphs [of predicted growth] going through the roof at the end. That very rarely happens.
"Having said that, I think a more realistic attitude will prevail as people realise how long it takes to commercialise a product, especially when you are working with large manufacturers."