maconda supports FLOTTE Beteiligungen in the acquisition of sanotact, a provider of dietary supplements and functional foods
maconda News April 2020
Dietary supplements are “in” – against this backdrop, FLOTTE Beteiligungen, the investment arm of the Piëch-Nordhoff family, has now acquired a majority stake in sanotact, the Münster-based specialist in functional foods. Prior to this, maconda’s Cologne-based consultants, who have many years of experience in the food industry, evaluated the business model and future prospects of sanotact, which operates worldwide across various product categories, in a comprehensive Commercial Due Diligence.
In Germany, sanotact sells dietary supplements primarily through drugstores and food retail – under its own brand and as a private label. In addition, sanotact develops, produces and markets functional confectionery, in particular fruity breath fresheners and dextrose products. Many German consumers know the colourful glucose rolls of the “intact” brand from pharmacies, where sanotact is the clear market leader. A significant share of revenue is generated outside Germany, including in Asia and the Middle East. A total of 190 employees work for the company, which previously belonged to Deutsches Milchkontor (DMK).
As part of a Commercial Due Diligence, maconda assessed sanotact’s business model and its future viability. The wide range of different products sold through different sales channels and in various countries around the world required an extensive analysis of multiple markets. This was achieved through detailed research, in-depth discussions with sanotact’s management, as well as numerous market interviews and “store checks” – on site at various retailers and online. The pragmatic approach of the Cologne-based consultants was particularly helpful here, especially in niche markets with a limited data basis, where it plays to its strengths.
Thus, each business segment of sanotact showed its own dynamics, different competitors, and specific characteristics regarding distribution channels: dietary supplements in German drugstores function differently from fruity breath fresheners specifically for the Asian market, and these, in turn, are very different from dextrose in German pharmacies. The analysis became even more complex as many products are sold in different geographies under their own brand as well as private label, and sanotact also successfully offers contract manufacturing. Accordingly, numerous interviews were conducted with customers and other market participants, including in China, Ireland, and Denmark.
In addition, a production expert from the maconda team with relevant experience inspected sanotact’s manufacturing facility in Münster and assessed its status as well as that of quality management. This was particularly important because sanotact manufactures the products it sells itself – unlike many other providers of dietary supplements in a market dominated by consolidating contract manufacturers.
About sanotact
sanotact was founded in 1934 under the name “Biolabor” and, most recently, became a subsidiary of Deutsches Milchkontor (DMK Group) through several steps. From the original idea of offering a milk tablet for coffee, it developed into one of the leading international specialists in functional foods and over-the-counter medicines. The product range includes dietary supplements such as effervescent tablets with vitamins and minerals and lactase products, which are distributed in Europe, Asia and Africa. The DMK Group wants to focus on its core competence of dairy products and therefore decided to sell.
maconda further expands its expertise in dietary supplements
The maconda team is intensively involved with dietary supplements, sports nutrition, organic food, vegetarian and vegan products, and food in general. This included several investment checks and Commercial Due Diligence engagements, strategy mandates, and projects to improve operational performance. All conceivable distribution channels play a role: sales via stationary retail, wholesale (still common for organic food), own online sales, and online pure players.
Intensive industry experience: Conventional and organic-certified dietary supplements | pharmacy-only and over-the-counter OTC products | phytotherapy | sports bars | protein powders | muesli | muesli and fruit bars | snacks and convenience food | dried fruits | nuts | vegetarian and vegan products | tea | natural cosmetics | food in general | brand products and private label | drugstores | pharmacies | health food stores | food retail and discount | eCommerce