Appetite for Change
Health and Sustainability in the Consumer Sector
The outlook for the UK’s food and beverage sector in 2025 is bright: the healthy snacking market for example is forecast to reach £3 billion in 2025, a CAGR of 7% since 2020.1 This growth reflects a convergence of macro trends seen across all verticals: increased health literacy, tighter regulatory scrutiny on sugar and processed ingredients and a generational shift in consumer values towards health and wellness.
Today’s consumers - particularly the younger generations - are actively seeking products that align with both personal wellness goals and broader societal concerns, with a preference for low-sugar, high-protein and naturally functional foods. In parallel, ‘free-from’ categories (gluten-free, dairy-free, soy-free, as well as vegetarian and vegan) continue to scale, not only among those with intolerances but also lifestyle-driven consumers who associate these attributes with better health outcomes. Plant-based alternatives are no longer niche; with formats such as chickpea crisps, mushroom jerky and protein bars made from upcycled ingredients gaining traction on supermarket shelves.
However, this momentum is not without headwinds. A growing wave of consumer scrutiny has emerged around ultra-processed foods (UPFs), with plant-based alternatives being caught in the crossfire and questioned for their long ingredient lists and high levels of processing. A British Medical Journal study linked high UPF intake to a c.50% higher risk of cardiovascular death and a 12% greater risk of type 2 diabetes.2 With over 90% of UK plant-based meat products classed as ultra-processed3, media coverage has sparked a shift in perception. Brands are now under pressure to reformulate and simplify ingredient decks, with future success driven by clean-label credibility and whole-food innovation rather than novelty.
Crucially, environmental impact is now a key purchase driver, particularly among urban and higher-income demographics. Product traceability, ethical sourcing and carbon-conscious manufacturing processes are increasingly scrutinised, with consumers willing to pay a premium for verified sustainability claims such as B Corp certification. For instance, UK drinks company DASH Water was praised for reducing food waste by using ‘wonky’ fruit in its seltzers and raised £8.7m in its Series A funding round.
The GLP-1 phenomenon will also certainly impact the food industry. These drugs, which suppress appetite and reduce calorie intake, are leading to decreased consumption of high-sugar/ high-fat foods and reduced snacking.4 This shift is prompting food manufacturers to adapt, with companies like Danone and Nestlé launching products specifically tailored to GLP-1 users, adapting to increased demand for nutrient-dense, portion-controlled products and a decline in traditional snack food consumption.
This evolving consumer landscape is fuelling renewed M&A activity, with both strategics and private equity firms seeking to future-proof portfolios through health-focused, mission-led brands. The functional beverage space is a key hotspot: 2025 has already seen Heineken back Tenzing, PepsiCo acquire Poppi for nearly $2bn and Temasek invest in Waterdrop, respectively, as players pivot toward gut-friendly, better-for-you drinks.
Beauty and Personal Care: Resilient Demand and Renewed Strategic Interest
The beauty and personal care sector has proven remarkably resilient to economic downturns, with spending in the UK forecast to grow at a CAGR of 8.4% through 2028. 5 The £12.5 billion segment still benefits from the ‘lipstick effect’, where consumers gravitate toward small, feel-good purchases during periods of economic uncertainty. The M&A deal pipeline has also benefitted, with over 60 deals closed in 2024 globally versus 43 the year prior.6 Our observations point to a rising interest in scalable beauty brands that sit at the intersection of efficacy, transparency and sustainability.
Indeed, consumer preferences have shifted toward natural and organic formulations, particularly in the UK which accounts for 21% of global clean beauty launches in recent years.
Sustainability remains a defining priority in the beauty industry, moving beyond marketing into core brand strategy and product development as consumers scrutinise packaging, sourcing practices and ingredient transparency, pushing brands to adopt more circular, low-impact business models. It is fast becoming a baseline expectation, particularly among younger, digitally native consumers who are holding brands accountable for their environmental and social impact.
The recent acquisition of Wild by Unilever for £230 million illustrates the strength of this trend. Founded in 2019, Wild has rapidly gained traction through its refillable, plastic-free deodorant format, appealing to eco-conscious consumers and aligning with the broader push towards ‘natural’ products.
However, natural credentials alone are no longer enough; there is a growing demand for clinically backed, dermatologically tested products that deliver measurable results. In 2024, LVMH-backed L Catterton led a US$40 million funding round in brand incubator Squared Circles to help develop science-backed beauty brands, reflecting a growing preference for transparency, efficacy and education over luxury positioning.
We see strong convergence between wellness, nutrition and beauty. Supplements for skin, hair, nails and overall vitality, particularly collagen powders and marine-based peptides, are seeing robust demand; Piper Private Equity invested in the collagen brand Ancient & Brave in 2023 and have since seen growth of over 700%.
Conclusion: A Consumer-Driven Investment Thesis
Across both food & beverage and beauty, the pattern is clear: consumer expectations are evolving rapidly and brands that respond authentically to demands for health, sustainability and transparency are outperforming. For investors, 2025 represents a strategic window to capitalise on these shifts whether through acquisition, partnership, or brand incubation.
In both sectors, the strongest growth opportunities lie at the intersection of personal wellbeing and planetary responsibility. This is not just a trend - it is a structural redefinition of value in the consumer goods landscape.
1 Oboolo: Healthy snacking in the UK - market analysis : actors, size of market, trends and opportunities
2 Lane M M, Gamage E, Du S, Ashtree D N, McGuinness A J, Gauci S et al. Ultra-processed food exposure and adverse health outcomes: umbrella review of epidemiological meta-analyses BMJ 2024
3 According to the NOVA classification system
4 EY: Do GLP-1 drugs mean flat growth for snacks?
5 Mintel: UK Beauty and Personal Care Retailing Market Report
6 Capstone Partners: Beauty M&A Update – November 2024