Global Pet Expo Trade Show Review

I recently attended the Global Pet Expo trade show in Orlando and came away with the following impressions:

  • There was good attendance, good traffic and good energy. Though I fear the show is penalized on all three of those metrics given how closely this show follows the Expo West show. While there were a couple of cool new products, most change was evolutionary rather than revolutionary.
  • Treats – as has been the case the last couple of years, there were lots of treats companies in attendance, which really reinforces that while it’s easy to find a good co-man to make treats, getting scale, real scale, is difficult and those that do are in rarefied territory.
  • CBD – as was the case at the ICR, Expo West and other notable tradeshows, CBD was a hot topic of discussion. Everyone is talking about it; everyone is looking at it at varying degrees, but there’s still a fair amount of hesitancy to jump all-in.
  • Air Dry – much as dehydrated inclusions, HPP, etc., have been all the rage in the past, there was a lot of chatter about “air dry” this go-round. Air drying entails the movement of warm air over and around food/treats. Contrary to the dehydration method, the material is spread out thinly on trays and placed in a room where warm air is simply flowed over the product, allowing the product to dry. Drying time can depend on the season, which in turn determines humidity content in the air, as well as things such as fat content in the material. The advantage of air drying is the elimination of the need for the usage of binders or carbohydrates to hold everything together and, in contrast to an extrusion process that uses high heat and pressure, air drying doesn’t utilize any of this, resulting in negligible nutrient degradation.

MHT Partners, a leading consumer investment bank, looks forward to continuing to follow the up-to-the minute trends in the pet space and seeing you at SuperZoo!

High-Cost Higher Ed: College in the 21st Century

Parents and students beware: tuition has increased yet again! In what has become a rather predictable pattern since the 1980s, the sticker price for average tuition in the United States has increased faster than the rate of inflation. Weighing in at an average of $19,189 for public, four-year universities and $39,529 for private universities (including fees and board) (1), the annual cost of attending a four-year university has reached new heights – and with it, student loan debt. As a result, many students and families are having to decide between getting a degree and facing decades of debt payments after they graduate.

According to the National Center for Education Statistics, average tuition across all four-year institutions totaled $26,120 per year for the 2015-2016 academic school year, bringing total costs to a whopping $104,480 over four years. The equivalent cost of a four-year degree for the academic year ending 1996 would have totaled just $41,320. This means that the cost of college attendance more than doubled after inflation. To put those numbers into perspective, the cost of attending Harvard in 1988 totaled only $17,100 per annum. Today, Harvard students pay more than two and a half times that amount, for a total of $46,340 for the cost of tuition alone – a 171% increase over 20 years (2). If that doesn’t faze you, try tacking on another $20,000 for room and board, books, and other miscellaneous fees and expenses.

As the discrepancy between rising tuition and stagnating wages continues to broaden, it is becoming increasingly difficult for graduates to make a living and/or save for retirement and virtually impossible for students to work away their debt before graduating. Currently amounting to over $1.5 trillion, student loans represent the highest non-housing consumer debt category in the U.S. – even more than auto or credit card loans. Interestingly, the availability of student loans has created somewhat of a paradox that has fueled increases in tuition: while students otherwise unable to afford the cost of college are able to take on large amounts of debt to fund their degrees, the lack of a cap on federal aid has artificially inflated demand for higher education. Additionally, demand for higher education has also continued to increase despite decreasing government funding to support college growth. Since 2008, 44 states have decreased their funding for higher education for a total of almost $9 billion, with 18 states having reduced funding by 20% or more (3).

While attending a higher education institution is often considered the logical next step towards a long and successful career, the current price tag on a college degree has forced many students to consider alternative pathways. Additionally, students planning to attend graduate school will need to be even more thoughtful and definitive about their plans for undergraduate education. That said, there is still hope for the future for students and parents on a budget. Students seeking a more reasonably priced education may consider pursuing a degree at a public university, which charges over $20,000 less on average than a private university. Furthermore, the advancement of online courses has introduced a number of opportunities in what is otherwise a very expensive and relatively stagnant higher educational environment. Though brick and mortar institutions will likely never disappear completely, there is no question that current tuition trends are not sustainable; as the needs of students and the economy change, so too must the educational system.

1 National Center for Education Statistics: “Tuition costs of colleges and universities”
2 CNBC: “Here’s how much more expensive it is for you to go to college than it was for your parents”
3 Center of Budget and Policy Priorities: “A Lost Decade in Higher Education Funding”

Unlocking the Value of Protected Patient Data

The global healthcare dataset is massive and grows larger each day. Widespread adoption of electronic health records (“EHR”), digital medical imaging, health monitoring tools, wearable devices, and other recent technological advances are projected to drive a 36% annual growth rate in the total volume of healthcare data through 2025, according to a recent report from IDC. The potential impact of this mountain of information is staggering. Effectively organizing and analyzing this data can improve patient outcomes and provide valuable insights on overall health trends. However, there are several hurdles on the path toward realizing the full potential of this information.

Who owns all of this data? In 49 states (New Hampshire excluded) the patient is not explicitly deemed to be the owner of his or her own health information. In general, the information belongs to the party that created or authored it, meaning that medical records are the legal property of the provider. However, there are numerous state and federal restrictions guarding the acceptable use of medical records. Any protected health information (“PHI”) containing information such as patient demographics, clinical outcomes, payment history, and financial data is covered by the Health Insurance Portability and Accountability Act (“HIPAA”), which Congress passed in 1996 to protect patients’ identities and to uphold the confidentiality of health information.

Health organizations and contracted business associates can aggregate and utilize covered datasets in order to improve health care operations and, in limited circumstances, to create research databases. All PHI must be “de-identified” before being utilized for any outside purposes such as third-party data mining and analysis. The de-identification process requires the removal of key information and impacts the utility of the information. Private companies seeking to leverage covered data must deftly navigate these regulatory waters; in recent years several companies that have been overly cavalier with protected information have suffered the consequences. For example, in 2014 PaymentsMD and its CEO entered into a consent order with the FTC for failing to inform customers who enrolled in an online billing system that the Company would obtain detailed health information from health providers and insurance companies.

Valuable healthcare information is often overlooked and underutilized due to antiquated information systems. Medical records are regularly stored in unstructured formats, lacking critical information such as patient outcomes and treatment history. Moreover, vastly differing IT systems between healthcare organizations restricts the ability to aggregate large datasets between institutions. Organizing health data to make it accessible, analyzable, and conducive to sharing among organizations would allow small providers, researchers, and others who don’t own massive datasets to tap into a larger universe of health data and would unleash the full power of the world’s health information.

Several independent companies today are creatively utilizing healthcare data to provide valuable insights to providers. For example, Enlitic’s software platform uses deep learning to mine hospital data for subtle patterns that will improve diagnoses. Spurred by Vice President Joe Biden’s Cancer MoonShot initiative, companies have made great strides in the aggregation and analysis of cancer data. Syapse’s Learning Health Network is a global platform designed for sharing of precision oncology data, allowing physicians to utilize prior patient outcomes to support treatment decisions. Start-up Flatiron Health aggregates and analyzes medical records to identify useful trends and was recently acquired by Swiss multinational diagnostics and pharmaceutical company Roche.

The ideas that will drive the future of healthcare may currently be buried deep within electronic medical records, waiting to be uncovered by innovative analysts. Companies with the ability to effectively organize and analyze the world’s healthcare data will have the power to drastically improve patient outcomes and reduce the cost of care.

MHT Partners, a leading healthcare services investment bank, believes that innovative, niche solutions that decrease the cost of care while improving outcomes will shape the future state of healthcare. If you would like to learn more about MHT’s healthcare services advisory practice, please e-mail Taylor Curtis ( or Alex Sauter (

“Big Data Analytics Under HIPAA,” Arnall Golden Gregory LLP
“Big Data to See Explosive Growth, Challenging Healthcare Organizations,” Health IT Analytics
“Precision Oncology Needs Data Sharing: Integrating Genomic and Clinical Data to Advance Patient Care,” Syapse
“Tapping Into the Big Value of Health Care Big Data,” Foley & Lardner LLP
“The Fight for Patient Privacy Under Big Data Analytics,” Medical Bag
“The Role of Healthcare Data Governance in Big Data Analytics,” Health IT Analytics
“Who Really Owns Your Health Data?” Forbes

Snack Wars

In what one would deem a highly unique marketing campaign (which should perhaps be dubbed Snack Wars), Clif Bar’s co-CEOs, Gary Erickson and Clif Crawford, have recently challenged competitor Kind Snacks to start utilizing organic ingredients in the Company’s snack lineup, which includes a variety of bars made from whole nuts, fruit, and natural flavorings.   In an open letter to Kind founder Daniel Lubetzky published in The New York Times this week, the Clif team even offered to donate up to ten tons of organic ingredients to Kind to kick start the process, as well as lend expertise to Kind should they wish to reformulate their products to incorporate organic components.

Savvy marketing campaign?  Probably.  Altruistic gesture?  Seems a bit unlikely, but perhaps.  This gesture / campaign highlights the ever increasing scrutiny placed on snack food companies regarding how ingredients are grown and sourced and how “good for you” the products are.  Interestingly, the Kind team fired back and questioned Clif’s use of organic brown rice syrup as a sugar substitute in its products, while Kind focuses on the use of high-quality fruits and nuts in their simplest form, albeit not organic ones.  This leads to an interesting debate for the consumer – forcing them to think about prioritizing organic ingredients versus “whole” high-quality foods (although certainly, these do not have to be mutually exclusive, as this particular exchange might lead one to believe).

Regardless, both companies have succeeded in capitalizing on consumer desires for wholesome and healthy ingredients in a convenient ready-to-eat format – Forbes estimates Kind generates approximately $800 million in revenue, and Clif Bar generates somewhere between $500 million to $1 billion in revenue according to Inc. – and have each found their own niche in the increasingly crowded snack food aisle.  The major players in the food space have taken notice of the growing good-for-you snack bar space too – in 2017, Mars Inc. acquired an approximate 40% stake in Kind.  Clif Bar has elected to remain private, although no doubt they’ve fielded numerous overtures over the years from potential investors and acquirers eager to make inroads into the sector.

As consumer investment bankers (and hungry snack bar aficionados), we continue to follow the Snack Wars with interest, as well as monitor entrants into the increasingly popular space, including new participants exhibiting at trade shows such as Natural Products Expo West and the SF Fancy Food Show.  We have no doubt that M&A opportunities will remain plentiful for those healthy snack bar companies that can distinguish themselves in this attractive category going forward.

Workplace Wellness Programs: One Size May Not Fit All

2019 is well underway, and businesses have had the past few months to acclimate to new legislation, policy updates and operational shifts that constantly disrupt and reshape our corporate climate. Once a foreign, idealized concept, wellness programs have become a staple in the discussion surrounding company culture and workplace health over the past decade. According to a recent Welltok survey, over 60% of respondents rely on their employer for at least one aspect of their health. This responsibility has forced executives and HR professionals to stay abreast of the ever-evolving nature of workplace wellness to ensure that employees reap all of the benefits offered by participation in these programs. While the introduction of broad, firmwide initiatives has created “healthier” workplaces, many of these programs offer minimal value for employees who seek targeted, individualized care for their personal, non-holistic needs.

For decades, the focus of workplace wellness policies was centered on employee physical health and safety, but in recent years, the definition of “wellness” has expanded to include initiatives to promote employee social and emotional wellbeing. The challenge in instituting these programs is customizing the services to meet the objectives of both the organization and the employee. Just as health needs differ from person to person, so does willingness to engage, which can complicate the process of creating an effective program.

The personalization process typically begins with creating a unique medical profile for the employee. Biometric screenings (cholesterol and glucose readings, blood pressure measures, etc.) are regarded as baseline metrics needed to understand an employee’s wellbeing and fitness level. Given the confidential nature of this information, delivering feedback through personalized (and private) modes of communication (in-person meetings, video/phone calls, etc.) is a crucial step in supporting and encouraging employees to continue participation in the program. Plans to establish and maintain healthy lifestyles can be designed and administered by coaches who create and foster relationships with employees based on trust and accountability. Although contingent on employee engagement, implementation of these programs can ultimately yield higher profits, due to increased worker satisfaction and productivity and less lost time due to illness and injury.

With the termination (as of 1/1/19) of the Equal Employment Opportunity Commission’s wellness rule, participation in workplace screenings is now truly voluntary, eliminating employees’ potential financial incentives. Long associated with the generic questionnaires commonly issued at the onset of one’s employment, these traditional programs failed to produce tangible benefits as results were often collected and analyzed in a reactive response by employers who then would institute a one-time, general solution. Employees favor the rule change given the ineffectiveness of prior programs and concerns over confidentiality, pushing wellness programs into an uncharted territory. While privacy and data security are valid concerns, the value proposition of these programs hinge on employee engagement.  Best practices cannot be established without testing critical mass, burnout cannot be avoided without identifying common sources and personalization is just an idea until the employee endorses the program. The “sweet spot” is a resource that offers individualized benefits, rewards, plans, etc., for employees without jeopardizing the security and confidentiality of the collected data. Development of an encrypted and dynamic platform akin to what’s described above will require the integration of the latest advances in the engineering and technology fields which has only recently garnered the support and attention from the private capital community.

As the “one size fits all” approach to wellness is phased out in favor of personalized programs, funding has poured into the space by investors who hope to obtain early positioning in a market expected to reach $85 billion by 2025. Recognizing the opportunity to assist with the evolution of customizable, cutting-edge enterprise wellbeing solutions, many private equity groups have channeled funding into companies positioned at the forefront of this transformation, such as Aduro, Inc. (ABRY Partners), Limeade, Inc. (TVC Capital) and meQuilibrium (Chrysalis Ventures).

MHT Partners, a leading business services investment bank with extensive experience partnering with companies offering employee wellbeing solutions, believes that personalized programs lead to healthier and more productive workplaces. If you would like to learn more about MHT’s business services advisory practice, please e-mail Mike McGill ( or Kevin Jolley (

Welltok, New Research Reveals Most Employees Get Generic Wellbeing Support
Benefit Advisors Network, Legal Alert: Court Vacates EEOC’s Wellness Program Incentives Rules Effective January 1, 2019