Food manufacturing is composed of industries that transform livestock and agricultural products into products for immediate or final consumption. Primary activities include processing of raw materials into food products, packaging and distribution through various distribution channels which can be both online and offline to both individual customers and commercial establishments.
The food and beverage industry is an essential part of the US economy; it employs more than 1.5 million people. The consumers are generally concerned about sustainability, and are willing to pay more price for eco-friendly and organic foods. This industry is lately grown over by the increased availability of products across E-commerce platforms and the shifting of food preference among the millennial and generation Z.
The M&A deals in food and beverage industry is driven by strategic buyers who contributes around 89% of the transactions happened in the recent years. Some of the trends driving the merger and acquisition activities are:
- Strengthening the foods portfolios and launch a new product line which will increase the market presence. Saputo Inc. acquired Shepherd Gourmet Dairy Inc. to diverse its product category into specialty cheese and yogurt
- To increase the production capacity of SMEs due to high demand market. M&A deals are likely to occur more in the future
- For the development of the new innovative product, to meet the supply of niche market. M&A take place among small companies, which like to share the R&D facility and to merge the distribution channels into one
- There is shift in the strategies among the business owners in expanding the business which leads to more acquisition opportunities to the well-capitalized companies
Keystone Business Advisors are Los Angeles based M&A advisory and Business brokerage firm offering sell-side advisory services to privately held business having up to $50 million in annual revenue. Our track record of success allows us to locate and negotiate with active and leading buyers on behalf of our clients. Our business brokers are well versed in the latest industry insights and trends and provide opinion of value and assessment of things you can do to better prepare your business for sale in advance at no cost.