(BFM Bourse) – More natural, less synthetic chemistry in what we eat or what we put on our skin… Consumers are more and more attentive to the quality of food or cosmetic products . Small players such as Groupe Berkem or Vinpai want to establish themselves in this buoyant segment of natural ingredients, a niche left vacant on the stock market since the delisting of Naturex in 2018.
Pastries, biscuits, imitation cheeses, and even fries made from powders derived from natural products, in particular algae-based… This is not an excerpt from a science fiction scenario, but it is the promise of Vinpai. For more than ten years, this company based in Saint-Dolay in Morbihan has been manufacturing powder from algae or vegetable and mineral ingredients which will then be used as a basic ingredient for industrial food or of the cosmetics sector. The goal for them is to put ingredients of natural origin in place of traditional chemical additives.
Vinpai – for Verbeïa ingredients Intermediate food product – already markets its ingredients in more than 30 countries. The company hopes to accelerate its growth internationally and by also relying on the “buoyant” cosmetics and skincare market. Vinpai’s revenue growth is impressive. On average, over the past five years, its annual growth exceeds 40%. Admittedly, these are still low volumes since the turnover was 5 million euros in 2021. But the company estimates that demand is very strong and it is targeting 16 million euros in turnover from 2025.
Vinpai is not the only company to specialize in this niche. If its IPO project is successful, the company may join Groupe Berkem, a benchmark player in plant chemistry that went public in December 2021.
Groupe Berkem, the little plant chemist
Founded in 1993, Groupe Berkem knows how to extract natural antioxidants from grape seeds or pine bark. These ingredients are then used in food supplements, cosmetics and the food industry. But the company also develops a large part of its activity in the formulation of chemical active ingredients to improve the performance of construction wood or the synthesis of certain resins and paints.
Berkem develops from these two major areas of activity what it calls “plant superactivators”, plant extracts that are able to promote the effectiveness of certain synthetic products while reducing the risks for humans. and the environment. Thanks to these bio-sourced ingredients, manufacturers have a need to integrate fewer synthetic chemicals (often derived from petroleum) into their products to achieve the same effectiveness. Berkem already has more than 40 million euros in turnover, with growth of nearly 12% per year since 2013. The company is targeting 65 million euros in revenue in 2024.
Since its IPO, the share has fallen by just over 5%, which shows good resistance given the evolution of the markets over the past 6 months. By way of comparison, the CAC 40 is down over the same period by 13.27%, and the CAC Mid & Small, which concerns small caps and midcaps, is close to -7%.
A marked interest from L’Oréal for bio-sourced ingredients
Small businesses are not the only ones evolving in this niche. L’Oréal is also very interested in bio-sourced ingredients… The cosmetics giant has bet on Global Bioenergies, a company that has also been listed on the stock market for more than 10 years. L’Oréal has even become the reference shareholder of the company, with nearly 13% of the round.
This week, the cosmetics giant has just placed an order with the French company Global Bioenergies. The company specializes in the production of a crucial ingredient for the cosmetics industry: isododecane. Today, it is a derivative from petroleum. Global Bioenergies knows how to make an equivalent from vegetable raw materials.
We find this ingredient everywhere: in make-up, hair care or even body hygiene products. And for L’Oréal, it is at the heart of its strategy. The group has committed to having 95% bio-sourced ingredients in the formulas of its products by 2030. And this is just one example. But with the ecological transition and the increasingly strong demand for this from consumers, we understand that the market for ingredients of natural origin for manufacturers is a market that will become very important in the years to come.
Naturex, listed from 1996 to 2018, has long delighted its shareholders. Driven by the boom in the market for natural extracts for the cosmetics and food industries, this Avignon-based company experienced regular appreciation on the stock market until its takeover by Givaudan for 1.29 billion euros. Out in style, the world leader in flavors and fragrances did not hesitate to offer a premium of 35% compared to the highest listed price of Naturex to afford the tricolor firm.
It is difficult to say whether Berkem, Global Bioenergies or even Vinpai will experience the same success on the stock market in the years to come. But what is certain is that this market deserves investors’ attention. And that it already houses several tricolor nuggets.
Jean-Louis Dell’Oro – ©2022 BFM Bourse
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