Our focus on the middle market consumer sector is driven by four primary elements:
The market is large and attractive. The consumer segment, at over $10.5 trillion in sales, is the largest segment of the roughly $14.3 trillion U.S. Gross Domestic Product. Catterton’s targeted industry verticals account for over 70% of annual U.S. consumer spending, or approximately $5.2 trillion. The consumer segment has demonstrated highly attractive long-term, risk-adjusted revenue growth, margin strength, and attractive public and private market investment performance.
The consumer industry has significant growth potential. High growth and attractive investment opportunities in the consumer sector are being driven by numerous factors, including: (i) favorable demographic and lifestyle trends; (ii) market inefficiencies (such as fragmented sectors and multi-tiered distribution); and (iii) corporate reorganizations, resulting in the opportunity to acquire non-strategic and often underperforming brands at attractive valuations.
The consumer industry leverages our knowledge base. The senior management team of Catterton has over 300 years of strategic, operating, and financial experience in the consumer industry. This experience includes the management of companies in all stages of their development: early stage, high growth, mature/late stage, as well as turnarounds. We have nurtured proprietary relationships with leading strategic industry players and their CEOs across all of our targeted verticals, and have developed a unique consumer trend-based behavioral model in order to augment and complement our investment analysis, and provide additional value to each portfolio company. Collectively, we provide a valuable and unparalleled experience base and set of resources to companies in which we invest.
We have a proven track record of success in this arena. We have one of the strongest investment track records in the consumer industry. Since 1989, we have completed over 70 investments, across all of our targeted industry verticals, and have created many leading companies in their respective industry segments. This strong performance and our effective means of working with co-investors, financial institutions, and management teams have been instrumental in establishing our superior reputation.