The New Standard for Evidence in Product Innovation

Startup founders in food and nutrition often think they have a marketing problem. On closer inspection, they find it’s an evidence problem—one that creeps up when the founder is heads-down solving short-term issues and loses sight of the ultimate goal: building a business worth acquiring. For a serious acquirer scanning the category, clinical data is the only signal that cuts through the noise.

As a venture capital firm that manages $260 million across three dozen portfolio companies focused on improving health outcomes, we spend a lot of time evaluating companies at the intersection of science and health. And we often see the same disconnect—teams who have done genuinely interesting scientific work but haven’t linked it to the three things that determine long-term commercial value: clinical evidence that holds up under scrutiny, intellectual property (IP) rooted in biology, and a deliberately chosen regulatory route.

Acquirers are already pricing this in. Strategic buyers are paying meaningful premiums for on-trend, specialty ingredient companies. They’re also paying revenue premiums for clinically differentiated consumer nutrition products with condition-specific positioning and reimbursement access. Just take a look at recent transactions: Sanofi’s $1.4 billion acquisition of Qunol in the vitamins, minerals, and supplements space; dsm-firmenich’s purchase of Adare Biome in the microbiome ingredient category; and Danone’s acquisition of biotics company Akkermansia. Each deal signals expectations around the evidence quality, regulatory standing, and IP defensibility the acquirer is willing to pay for.

For ingredients and finished products alike, clinical trials are what unlock on-package claims, credible health-professional endorsements and sales channels, and the return-on-investment conversation with retailers and payors. A company without a clinical strategy has, in effect, no claim strategy.

And clinical strategy is linked to regulatory strategy. For example, “nutraceutical” is a term with almost no regulatory meaning. What matters is whether a product is classified as a dietary supplement, a functional food, or a medical food because that determines what claims can be made, where it can be sold, and whether an insurer, employer, or health-care system can eventually pay for it. That classification should be a strategic decision made early, not a compliance determination made late.

Two PeakBridge portfolio companies with seemingly similar businesses show how different approaches apply. One designed its regulatory pathway for the most stringent regulator, the European Food Safety Authority (EFSA), from day one, knowing that U.S. structure-function claims would automatically be covered through this process. That discipline meant holding themselves to claim standards their competitors ignored and investing in trials when capital was tight. It’s a long game that is now what’s opening business-to-business and institutional channels that competitors can’t access. The second company took a different route, engaging regulators only when it created an actual competitive moat. Years of dialogue with EFSA over a proprietary extraction technique resulted in a formal consultation that effectively closed the market to competitors using inferior processes.

The top 10 food companies spend about $22 billion annually on mergers and acquisitions. They’re buying protected, proven technology with a clear clinical narrative.

We ask, “Could a well-funded competitor replicate this in 18 months?” If yes, it’s not a moat. Real defensibility comes from proprietary compounds, validated strains, protected manufacturing processes, or unique formulations confirmed in humans—not from packaging design or a first-mover advantage in a trend cycle. Sure, in the early days, those with the strongest marketing can look like winners, but that’s a game where the deepest pockets win.

Artificial intelligence is eroding this marketing advantage from both ends: generating marketing at scale that makes brand differentiation harder, while giving consumers a tool that cuts through unfounded claims.

Food corporations spend roughly 0.4% of revenue on R&D, preferring to buy innovation instead of building it. The top 10 food companies spend about $22 billion annually on mergers and acquisitions. They’re buying protected, proven technology with a clear clinical narrative. For startups, building toward that standard from the beginning is harder and slower but eases the conversation with acquirers.

Pharma and food conglomerates are in consolidation mode, carving out what’s less strategic, and doubling down on the assets that fit. The companies they acquire are the tools for that repositioning, and hype doesn’t travel well inside an acquirer’s portfolio. Clinical evidence, regulatory clarity, and IP rooted in biology do. Founders who build to that standard are building something worth keeping.