Aqua Capital has acquired a majority stake in Brazilian food and supplement provider Puravida.
Aqua’s founder and managing partner Sebastian Popik said the acquisition makes the São Paulo-headquartered firm well-positioned to benefit from the increasing focus on health and personalization in the food market.
“One of the things we are very cognizant of is that there is an evolution in some business models, going more directly from farm to mouth,” he told Agri Investor. “This company, by going directly to the consumers – 70 percent of its sales are online – they are talking to their customers on a daily basis and serving those needs.
“We will evolve by better tapping people’s nutritional needs so they can have customized product offerings in the future. This is just part of the evolution of health and food in general, so we want to be there.”
Puravida was founded in 2015 and brands itself as a provider of healthy, minimally processed, sustainable and functional food and snack products. Its offerings include organic chocolate, coffee, coconut-derived snacks, supplements such as grass-fed and plant-based whey, and superfoods.
Though Puravida also offers healthcare products like toothpaste and dermatological creams, Popik said the investment was not a change in strategy for agribusiness-focused Aqua. Instead, he said, the investment reflects the University of Texas Investment Management Company-backed firm’s longstanding focus on middle-class consumers across Latin America, where Puravida’s easily understood name can travel easily across languages.
Puravida’s focus will remain on improving the business model within Brazil through at least 2021, said Popik, adding that international expansion is likely to eventually be a focus for the company.
“The megacities of Latin America, like Bogotá, Mexico City, Lima, São Paulo or Santiago, are very attuned to this [health and wellness] and open to this value proposition,” he said. “We are going to be looking at other markets as well. We do not know what will come first at this point.”
Popik said Aqua’s investment was the result of a competitive process that started late last year. He added that although it was Puravida’s strong growth margins that had attracted Aqua, the company’s competitive search for new investors was launched after Aqua had already identified health and wellness as a focus.
Puravida experienced a boost in sales during the weeks immediately following the initial spread of covid-19, according to Popik. He added that recent focus groups had also provided evidence of a strengthened focus on health among consumers. Key to Aqua’s investment into Puravida, he said, is a judgement as to how durable that post-covid focus on health and wellness is likely to be.
“This was a very nice intellectual challenge for our team, and we will see over the long term whether we got it right or not. It seems like there is this underlying trend that is very strong, so we invested on that.”
According to Popik, Aqua plans to focus on expanding Puravida’s customer base, including through the introduction of new products. He said it was likely to begin with pet foods, vitamins and non-refrigerated functional beverages.
The Puravida investment, he said, was likely to be the last new platform company to which Aqua would commit capital from its second fund, which closed on $370 million in 2017. The fund targets annual returns of more than 20 percent, with a primary focus on Brazil and a secondary focus on investments in Argentina, Peru, Chile and Colombia.
Aqua has not yet started to raise a new fund, said Popik. He added that the firm does have capital available for add-ons to support existing investments. The latter have included biological inputs provider Total Biotechnologia, animal health distributor VetBR and cheese company Lac Lelo.