Building a Health and Nutrition Business Empire with Grant Ferrier of NCN

Episode Overview

Episode Topic: In this episode of NutraPreneur, we engage Grant Ferrier, the founder and CEO of Nutrition Capital Network (NCN), to discuss the transformative world of Early-Stage Investment within the health and nutrition industry. We explore how he has created a pivotal platform for connecting investors with burgeoning companies. This episode illuminates the critical role of early-stage investments in fostering innovation and growth in the rapidly evolving sector of health and nutrition, showcasing NCN’s unique approach to facilitating these essential connections.

Lessons You’ll Learn: Throughout the episode, there will be invaluable insights into the importance of Early-Stage Investment for the health and nutrition sector’s growth and innovation. Through Grant Ferrier’s journey with NCN, we learn about the challenges and triumphs of establishing a network that bridges the gap between investors and startups. The discussion will highlight strategies for inclusivity and support for underrepresented entrepreneurs, demonstrating how early-stage investments can be a catalyst for diverse founder representation and success in the nutraceutical industry.

About Our Guest:

Grant Ferrier, the emeritus chairman and founder of Nutrition Capital Network, is a luminary in the world of Early-Stage Investment in health and nutrition. His journey from an environmental enthusiast to leading NCN showcases a passion for leveraging early-stage investments to drive meaningful change in the health and nutrition sector. Grant’s unique perspective on the intersection of investment, innovation, and industry growth makes him an invaluable voice in discussions about the future of nutraceuticals and health-oriented startups.

Topics Covered:

This episode covers a wide array of topics related to Early-Stage Investment in the health and nutrition industry. From the genesis and mission of NCN to building a robust community for growth and innovation, listeners will discover the multifaceted role of early-stage investments. Grant Ferrier shares success stories, insights, and advice for both aspiring entrepreneurs and investors, highlighting trends and opportunities in the sector. This comprehensive discussion not only sheds light on NCN’s evolving role but also offers practical guidance for navigating the dynamic landscape of health, wellness, and nutrition industries through strategic investments.

 

Our Guest: Grant Ferrier- The Nutra Vision That Beyond Green

Episode Transcript:

Grant Ferrier: When I talked to the founders and I said, well, maybe I’ll invest, maybe I’ll help you guys since it’s been hard to get enough money again as an early-stage company. It’s, you know, most of the bigger investment funds don’t want to write checks for half a million. They want to write a check for 5 million. So anyway, I helped the company and we partnered on supporting another 2 or 3 investments. Eventually, the company sold to Kings Hawaiian. So again, an example of an entrepreneur who came to Vienna at less than 100,000, in sales and exited with more than eight figures, more than 10 million. I can’t say what the eventual price was, but again, it was a very successful brand.

Bethany Jolley: Welcome to NutraPreneur, the Neutral Industry podcast. I’m your host, food scientist, and nutraceuticals consultant, Bethany Jolley. Each episode, we’ll be exploring what it takes to thrive in the nutraceutical industry. From conversations with successful nutraceutical entrepreneurs to venture capitalists to tech executives whose innovations are reshaping the nutraceutical industry. We explore the innovations and trends that are shaping the next generation of nutraceutical businesses. Welcome to another episode of NutraPreneur, the premier platform for exploring cutting-edge developments in the health and nutrition industry. I’m Bethany, your guide through this world of innovation. Today, we’re excited to welcome Grant Ferrier, the visionary founder and CEO of Nutrition Capital Network, also known as NCN. NCN plays a pivotal role in connecting investors with burgeoning companies and health and nutrition, offering unique networking opportunities and valuable industry insights. Welcome, Grant, it’s so great to have you today.

Grant Ferrier: Thank you, Bethany. Glad to be here. The only immediate correction is I was the founder of Nutrition Capital Network, and now I’m kind of the emeritus chairman of the advisory board and selection committee, and two of my worthy partners are still running and managing the business. But I still remain connected and obviously passionately connected to the industry as we will discuss.

Bethany Jolley: Yes, absolutely. So I think it’d be great for you to kind of talk to us about the inception of NCN and your personal journey that led up to its foundation.

Grant Ferrier: Well, my original personal motivation for my intellect, my energy, and whatever I was blessed to be born with was solving environmental problems. So I was an undergraduate environmental studies and environmental economics student at UC Berkeley. When I finished that seven-year program just with a bachelor’s degree. So I took the long course through the lifestyle issues of living in Berkeley in the 80s and started a business which became Environmental Business Journal. And I still run that business 37 years later with about half my time and about a decade into Environmental Business Journal. we founded Nutrition Business Journal, which was a strategic market intelligence journal and data collection, data analysis strategic planning, corporate development information suite of of information services and, and products really to help support business planning in the nutrition industry. And that was 1996. So NBJ still runs and operates as part of the new Hope natural network. Informa Exhibitions, the same company that runs the Expo and supply side West, big shows.

Grant Ferrier: And then after selling that business to them, we started Nutrition Capital Network. The basic idea was we had this whole big database of natural organic food companies, nutritional supplement companies proprietary ingredients, and scientific development. And we solicited them. We said, hey if you’re looking to raise money we’re going to have an event. And this was 2007, and we got over 100 applications, and we picked the best 20, and we sold some tickets. And a lot of the investors were like I’ve got a stack of business plans this high why do I need to come to your event? And I said, well, I can give you 20, right? And then you can read about them in four pages each. So, that service connected with the investors, and we built out the company. We eventually had over 70, what we call cornerstone investors, many of which are still there. whatever. How many I should count? I can’t count them. 15 years later, I guess it is, and through that platform, we’ve evaluated almost 5000 companies now and presented almost 1000 at these meetings from again now five meetings a year, sometimes six, depending on the international schedule. And that’s been the platform company. So it’s been a great journey. I’ve met lots of people on both sides. Investors, strategic partners, private equity ventures as well as corporate venture capital and all those interested in this thing called the natural products or nutrition industry. So it’s been a great journey. And, of course, thousands of Nutra entrepreneurs tied back to your theme. So it has been quite a journey.

Bethany Jolley: Yes. That’s amazing. As you kind of already mentioned, NCN is renowned for its unique database and event hosting to facilitate these investor-company connections. So how do these initiatives support the health and nutrition sector?

Grant Ferrier: Well, the issue is and there’s one of my cats visiting here. So it’s my home staff members who keep me company. So somebody to talk to if I don’t have you here today anyway. I think our mission really was and still is at NCN, there’s a disconnect between the money. So there’s lots of money. You hear all this dry powder and overhanging capital that’s sitting in the system. And then you’ve got thousands and thousands of small early-stage companies and the big money doesn’t have time, or doesn’t want to do a deal with a small company. So convincing those big companies that they should either carve off some of that block of capital and have a couple of people manage it and place investments of half a million to 1, 2, 3, 4, $5 million into early-stage companies have a venture group, have an incubator or some effort to really support the entrepreneurial community that really makes up the power of innovation in our industry.

Grant Ferrier: And then the other side, of course, was all these small companies and all these entrepreneurs have these great ideas, great passion. Again, there may be like 20, or 25 qualities of a successful entrepreneur. And nobody has all those qualities. But every entrepreneur thinks they have all of them or have to have all of them to get started. So learning the business, finding those connections, and then building out the network. So the network effect of many of the most successful early-stage companies may be a husband and wife founder, a family founder, or 2 or 3 partners that met somewhere or met another company. The more they can connect with their supplier, their manufacturer, a branding company, and those become partners rather than vendors, the more they can grow the company faster, they can get more capital, the entrepreneur has a team around them, and it is not necessarily a team of employees, which they need, of course, but they need a team of motivated and aligned partners whose interests are the business itself, not sending them an invoice every month or two months. So that whole kind of network effect partnership model is something we’d advocated. And I think we brought that culture to not only the entrepreneurs but many of the investors, too.

Bethany Jolley: Yeah, absolutely. I think networking is so important. And finding the right connections is key in this industry.

Grant Ferrier: Yeah. And I think one thing we did to another element of our platform NCN is the selection committee. So that grew from originally just two of us to now over 30 and maybe possibly even 40 now depending on how Mike has recruited and managed that group. But basically, they helped review these incoming hundred applications, let’s say, and then have ratings independently and then gather to discuss which of these should we select for the next meeting, whether New York or San Francisco have been the traditional sites for the fall and spring meetings, but then those individuals also often act as advisors. And again, what we’ve tried to encourage them to do is to be a venture consultant. I would call it. So don’t see them. And many of them are consultants and they’re high-paid consultants, and they work for some of the bigger investors or corporate players in our industry. But for the early-stage companies, again, don’t hunt for a check hunt for equity, hunt for partnership. Be aligned, and help these young companies offer your services. And if you know, you would build $50,000 for your advisory services for a year and a half, say, well, if your company is worth 5 million, then I’ll have a 10% stake in the company if I stick around for three years, I mean, those kinds of venture consulting, I think aspects help this kind of partnership and network model.

Bethany Jolley: Yeah. And in terms of fostering diverse founder representation. What strategies has NCN implemented to ensure inclusivity and support for those underrepresented entrepreneurs?

Grant Ferrier: Well, I mean, the first observation is we really didn’t have to have a lot of really specified objectives because our industry is highly characterized. I mean, female founders probably outnumber male founders. And then again, husband and wife teams, family investments racial diversity age diversity, I suppose I wouldn’t say we discriminate against entrepreneurs over 50, but of course, the vast majority of early-stage innovative entrepreneurs across our industry are in their 20s or 30s somethings who have been in a business or worked for somebody else and said, hey, I want to do this myself. So again, I think, the sort of female representation of our industry is very strong. I mean, separately, we have had a couple of events where we’ve collaborated with there’s Women in Nutrition and there’s a New Hope usually had an event at the Expo for female founders.

Grant Ferrier: I myself invested in probably five, either female founders or husband and wife companies that were led by women. So again, I’ve had lots of experience with that as well as just the general nature of our industry. I mean, food, I shouldn’t say food is more interesting to women than it is to men. Men eat it and women make it. That’s probably a very 60s of me. But yeah, I think that that’s what’s great about our industry. It’s not like tech or others that have the kind of bro mentality. And our industry doesn’t have the sis mentality, but it has a very equitable platform. And we support certainly more investment dollars going in. There’s certainly lots of data about female founders getting less venture money across all industries. we don’t really have a specific data piece that would say our industry is better than that, which I think we know anecdotally. But again, I think we haven’t had any real need to have that program because over half of our applicants tend to be female-founded or minority-founded businesses.

Bethany Jolley: Yeah, I’ve noticed that as well. And just hosting this podcast, a lot of the entrepreneurs and nutrition businesses are female-owned, which is neat to see.

Grant Ferrier: Yeah. Lots of the experts and consultants and advisors and our selection committee and others are all again, it’s a diversity. I mean, I can’t say it’s not a problem across society, but I would have to say it’s really not a problem in our industry. It’s not something that we’ve had to sort of worry about and be concerned about. And I remember once we brought it up like, well, let’s make sure we have enough businesses that have female ownership involved. And we counted the 22 companies presenting and it was 14 of the 22. So we were like, okay, well, we’re overrepresented. Maybe we have to watch out. We don’t want the old white guys complaining. What about us? So anyways, no, I think we’re in a good space with that.

Bethany Jolley: This episode is brought to you by nutrapayments.com. If your business needs credit card processing that fully integrates with most major neutral software platforms, offers the lowest industry prices, and has built-in features like recurring billing, zero-dollar trials, and chargeback prevention, then visit us at nutrapayments.com for a free online quote. NCN hosts annual investor meetings as well and provides a year-round virtual platform for networking. So how do these platforms benefit both entrepreneurs and investors?

Grant Ferrier: Well, again, for investors beyond the say, 20 companies, 22 companies that present in San Francisco and New York, probably 15 or 16 in Las Vegas, which tend to be nutrition science supply companies around the supply sideshow. and then Europe they get that, but they also get the aggregation of the application pool. So as I mentioned, each year there are probably another 400 or 500 applicants, of which we choose, maybe 70 or 80 to present at these companies and some of the virtual events we do and sort of follow up events with our sort of all-star presenters may be some who have only partially closed their investment round anyway. So the investors get not only that sort of curated and coached presentation material in person and online. They also get the kind of database of applicants. And then we sometimes tie that back to data on those segments. You know, Spins has been a partner. They provide data and my original business provides analysis and market numbers that can support the business planning and investment validation exercise. So the investors get both deal flow aggregated analysis of the deal flow to help them make strategic decisions as well as data that supports that. Then the presenter community obviously gets access to investors.

Grant Ferrier: So not only those who show up and watch their thing and click the button to say, I want to meet you or sign up on what you used to have a dance card. You know, a big poster on the wall with all the 22 companies and eight slots. So we had a big, I mean, that was the dance card. In our first decade, we used that, and we still use that at the in-person meetings where they would meet face to face, but then follow-up meetings and then a list of investors. And again, we don’t just pass that out willy nilly, but obviously, if we have a presenting company who applies and accepts and pays the, rather nominal fee, it’s it varies on the meeting, but it’s anywhere from 1000 to 1500, depending on the presenter fee once you’re accepted. But you also get coaching for that anyway. But you get follow-up contacts and more information. And the presenter does get lots of perspective too. They also get a mentor. So one of our selection committee members, as I mentioned is then assigned as their mentor. Sometimes there are multiple mentors. As you know, most entrepreneurs, they might not listen to every piece of advice they get, but they certainly hear it. And it goes in. And you never know where that perspective builds from what people tell you. So again, it’s a kind of a whole mutually supportive atmosphere that everybody gets something out of being part of it. So that’s why it’s been such a good foundation.

Grant Ferrier: And I think, one more interesting thing from kind of the business new Hope standpoint was obviously the majority of the platform of that business has been Expo, right, where 100,000 people traipse through over the 4 or 5 days in Anaheim every March. but during COVID, of course, that was canceled one year. And then the next couple of years somewhat compromised in terms of the number of people who would get a booth or two attempts, So having these virtual platforms where quality connections can be made was kind of more amenable up to that era. So again, I think it was personal events, but I think I wouldn’t say it sailed through, it was a lot less affected than other parts of the business.

Bethany Jolley: And it sounds like you’ve you’ve had a lot of success with this. So I think it’d be great if you could share with us a success story that exemplifies the impact of NCN’s community and resources on a company’s growth and investment journey.

Grant Ferrier: So we used to have this slide, we call it the 100 Million club, but it was essentially companies that came to NCN and were less than 5 million in sales and then became $100 million brands. And I can’t call that up now, but Zico, coconut water was one Mark Rampolla who’s now part of Power Plant Ventures. I mean, he sold that business through to Coca-Cola. He first met them at an NCN meeting in New York in 2009. I think it was. Coca-Cola made a strategic investment and then acquired the business. And ironically, Mark and his group acquired it back. Some of you 20 or 30 were early-stage companies. Again, in that sort of 5 million and under range, that became $100 million brands. my own personal introduction, and then I made a personal investment in a company called Shaka Tea, which bottles Hawaiian Mamaki. And I met the husband and wife at the 2016, NCN in San Francisco. it was a very early stage 100,000 or so in sales. And I tried to help them in meeting investors at that meeting and afterward.

Grant Ferrier: But then when I talked to the founders and I said, well, maybe I’ll invest, maybe I’ll help you guys since it’s been hard to get enough money again as an early-stage company, it’s most of the bigger investment funds don’t want to write checks for half a million. They want to write a check for 5 million. So anyway, I helped the company and we partnered to support another 2 or 3 investments. Eventually, the company sold to Kings Hawaiian. So, again, an example of an entrepreneur who came to Vienna at less than 100,000 in sales and exited with an exit of in excess of, I was going to say nine, eight, figure eight figures. So more than eight figures, more than 10 million. I can’t say what the eventual price was, but again, it was a very successful brand. And then through that myself, I also bought a farm in Hawaii where we grow this Molokai plant. So again, that’s my personal story. But again there are probably hundreds of investments that have come out of the companies that have partnered through it. And again, we were just one part of the equation on many of them. But again, an important piece for many of those.

Bethany Jolley: Yeah, absolutely. It’s always great to hear those success stories. And I would say you’re an expert in the field. And how do you see NCN’s role evolving in the rapidly changing landscape of the health, wellness, and nutrition industries?

Grant Ferrier: Well, I sort of my multiple hats nutrition business journal provided a kind of strategic market intelligence and perspective on the industry. And through that research that we did that then sort of fed into the platform that again supported and became NCN because of the database, but also the market intelligence and perspective. You know, when I started analyzing this industry really seriously in about 1995, and we launched NBJ at the end of 1996, realized that most of our products, whether they are natural organic foods, they’re essentially replacing a more damaging alternative and whether it’s damaging to animals or the planet or humans themselves, based on preservatives and chemicals, these were the essentially natural organic products or healthier products or what we call lesser evil products less fat, less sugar, less calories. We’re replacing the market standard products. When we first did this analysis market standard products were over 80% of food sales, as an example, or maybe even over 90% was preliminary analysis at that point. But now natural foods, organic foods healthy foods, functional foods, and again lesser evil foods that have less preservatives or toxins or again, sugar or things that are damaging.

Grant Ferrier: They’re probably over 30% of the market now. So that continuum, I think continues and I think tracking that, following that, supporting that is an important mission that sort of guided all the businesses I’ve been involved with. For the future, I think what’s good about that if it’s gone from 10% of the market to 30% of the market during this sort of 20-year cycle that I’ve been involved intimately and passionately with the industry that 30% is going to go to 50% in the next 20 years. So that means thousands more opportunities, thousands more companies more of more of those big blocks of unallocated capital that’s sitting in the pockets of the big wigs in New York and Shanghai and Tokyo and London and Cape Town and all the continents of the world and these financial communities that engine of capital needs to refocus on healthy products and healthy Planet. I mean, a lot of the climate change aspirations weren’t part of our industry a decade ago. Now, you walk around the expo this March, you go to Anaheim, you’ll see, I wouldn’t say every other booth will have some kind of climate message, but that’s part of what’s resonating with our generation, your generation all the way from kids to people in their 80s are concerned and they want to participate with companies and products in a community that supports all of their own personal passions. So I think that’s really the future and it’s going that way. And it’s step by step by step and it keeps evolving and keeps getting bigger. So the momentum is in the right place.

Bethany Jolley: Yeah, I’ve noticed that trend as well. I’m seeing more and more businesses that are focusing on sustainability and worrying more about how they’re impacting the environment, which I think is really important, and I’m glad to be seeing that.

Grant Ferrier: I think the opportunities around the environment and that industry are quite different from nutrition because nutrition is essentially a consumer products business, whereas the environment’s a lot more about technology, whether it’s electric cars, or carbon capture, or hydrogen, or even small-scale nuclear. All these things are scientists, engineers, and part of the industrial economy, not the consumer economy. So again, the overlap of those two industries is pretty tiny. But again, it’s something I’m interested in both obviously, that’s how I’ve kind of built my life and my career around those two industries. And I never kind of expected them to overlap in some kind of Venn diagram. But again, more of the nutrition-oriented companies are embracing climate issues and many of the environmental technology companies are doing sustainable food production, sustainable agriculture, or sustainable manufacturing and packaging and production and transportation, which all tie into this damaging consumer economy that that our race or our humankind has subjected the planet to. So we have to reverse all that in our lifetimes.

Bethany Jolley: And with all of your experiences, what key advice would you offer to new entrepreneurs who are seeking investments or partnerships in this space?

Grant Ferrier: It’s funny because I was going to say you have to be passionate, you have to be all in. But a lot of the more successful companies that I’ve been with at the early stage aren’t as dependent on making a living out of it. So raising money, you really have to have a business model that is focused, sustainable, and has a growth path. So I think the idea is to really prove your concept with your own money, your own time, your own family. I mean, that’s the kind of the traditional path, right? Family and friends. And using your own personal network and your own personal passion and time to build that out. And there’s no problem in trying to peel off 5000 a month for you to subsist while you’re growing the business. But there’s nothing wrong with having a job and then starting a business on the side and then proving it out, and then going into that and having that be your bailout or not your bailout, but your transition into running that full time.

Grant Ferrier: I think, try stuff and commit but don’t put everything in on one thing because you never know what’s going to what’s what’s going to click. And then again, the next stage is to find partners, and have aligned interests. So don’t just think, I have to tell a story and raise money or don’t make raising money the be-all and end-all because some entrepreneurs get kind of hooked on it. They get very good at raising money and telling the story, but kind of lose sight of the operations and building the team around them to pull off the operations. So again, it’s a mix between the story and managing the capital structure and all the deals and transactions you might make to grow the business and retain the team and the operations. So I know that was kind of a convoluted answer to “What do you tell entrepreneur?” But again, I think there are many pathways to success. And you just have to keep open-minded about how you’re going to get there. There’s no playbook that I think you have to stick with.

Bethany Jolley: Yeah, absolutely. I think everyone’s situation differs a little bit. On the other side of things, for investors that are new to the health and nutrition sector, what should they be looking for and potential investment opportunities, and how can NCN aid in that process?

Grant Ferrier: Well, I think for investors, I think you want to make an impact. My own personal innovation as an individual early-stage investor and with a couple of partnerships with others. I mean, I’m motivated by changing people’s lives, not only the consumers of the products we may produce but the people who I’ve started and built this company and then really kind of diagnosing with those early-stage entrepreneurs. Yes, they have to fulfill all the duties of the whole company. But you know what? Can you take off them? What can you support? So again, I think the answer is to find a company where your own personal strength and your own interests in what you want to do can help them. I mean, if you’re just I mean, if you just have lots of money and you want to write $10 million cheques, then you’re kind of in a different league. And then you also have partners and other people to answer to.

Grant Ferrier: So that tends to be a more conservative type of platform. But again, our industry needs entities and partnerships that will invest half a million, 1 million, 2 million, 4 million, 5 million. As opposed to the big hedge fund type money. So at that stage, it’s about the money, it’s about committing that money, but it’s also committing the time and support and your own network and your own ability to identify with the entrepreneur. What can be most helpful is to build out the team and increase the odds of all of you being successful not only from a financial standpoint but also having an exit with a nice return. But also impacts more people and larger companies who may acquire that brand or license that technology or use that ingredient across their platforms for the good of people and planet, and animals and everything.

Bethany Jolley: Yes. Well, Grant, thank you once again for joining us today. And that brings us to the end of an enlightening conversation. Grant, he is the driving force behind Nutrition Capital Network. And we’ve been able to delve deep into the synergies between investors and the dynamic world of health and nutrition. To discover more about NCN and how they’re shaping the future of this industry, head over to our website for links and resources. Don’t forget to subscribe, share your thoughts, and join our social media discussions. Until next time, stay engaged and informed with the latest trends and health and nutrition. Thanks for tuning in to this episode of NutraPreneur. If you enjoy the show, please subscribe and better yet, leave us a review as it really helps us grow the show.