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    Food & Agriculture Q3 2022

    Q3 2022 Food Agriculture

    Industry Trends

    U.S. Food Prices Increase 11.4% Year-Over-Year

    The consumer price index for all food categories in August rose 11.4% from the previous year, increasing 0.8% from July 2022. The food-at-home category, including grocery store food purchases, increased 13.5% in August from the year before and 0.7% from the preceding month. The food-away-from-home category, including restaurant purchases, increased 8.0% over the same period. According to USDA's economic research service, 2023 food prices are expected to grow at lower rates than in 2022 but still above historical averages.1

    Tight Global Food Supply Amid Persistent Drought in U.S. and South America

    Persistent drought in the U.S. and agricultural countries in South America have set back hopes of easing global food supply shortages and driving up food prices around the world, especially in poorer countries. The global food supply has been further constrained by Russia’s war in Ukraine, limiting the country’s ability to export. Agriculture executives state at least two years of good harvest in the U.S. and South America are needed to ease the pressure.2

    USDA to Invest $2.8 Billion in “Climate-Smart” Agricultural Projects

    Promoting the reduction of methane emissions and improving soil quality, the U.S. Department of Agriculture is investing $2.8 billion to support projects for farmers taking steps to implement environmentally friendly practices. The funding is expected to drive innovation in agriculture and build new markets for livestock ranchers. The pilot program, Partnerships for Climate-Smart Commodities, has selected 70 projects in its first round of financing, with a second round to be announced later this year.3

    Plant-Based Meat Sees Falling Retail Sales Volume

    After experiencing significant growth over the past years, retail volume sales of refrigerated plant-based meat have had a year-over-year decline of 10.5%, according to Information Resources Inc. data. The company cites increasing prices, taste, and health concerns as the primary drivers. In a survey conducted by Deloitte, respondents indicated a decline in the belief that plant-based meat is healthier than traditional meat. The company also suspects the decline is driven by a growing cultural resistance.4

    Largest Transactions Closed

    • Target
    • Buyer
    • Value($mm)
    • Sanderson Farms, Inc.
    • Cargill, Incorporated; Wayne Farms, LLC
    • $4,649.56
    • Clif Bar & Company
    • Mondelez International, Inc.
    • $2,900.00
    • PANTHERx Rare, LLC
    • Nautic Partners, LLC; General Atlantic Service Company, L.P.; The Vistria Group, LLC
    • $1,400.00
    • Helper Main Meals and Suddenly Salad Side Dishes Businesses
    • Eagle Family Foods Group LLC
    • $610.00
    • Certain Assets Associated with the Kitchen Basics Brand of Ready-to-use Stock and Broth of McCormick
    • Del Monte Foods, Inc.
    • $99.00
    • KISA Enterprises MI, LLC/KISA Holdings, LLC
    • TerrAscend Corp.
    • $28.50
    • Grover Beach Store of Natural Healing Center
    • Glass House Brands Inc.
    • $15.90
    • Hyla US Holdco Limited
    • Endexx Corporation
    • $10.00
    • Morro Bay Dispensary of Natural Healing Center
    • Glass House Brands Inc.
    • $8.13
    • Powell & Mahoney, Ltd.
    • Fevertree Drinks PLC
    • $5.90

    Other Financial Buyer Transactions Closed

    • Target
    • Buyer
    • Value($mm)
    • Sokol & Company, Inc.
    • Burlington Capital Partners  LLC
    • n/a
    • Water Lilies Food LLC
    • Blue Point Capital Partners, LLC
    • n/a
    • Parker Food Group
    • InvestIndustrial
    • n/a
    • Archer Roose LLC
    • Constellation Brands Ventures
    • n/a

    Other Strategic Buyer Transactions Closed

    • Target
    • Buyer
    • Value($mm)
    • Technical420, LLC/Certain Assets of Stonebridge Partners, LLC
    • Spotlight Media Corporation
    • $2.25
    • N.R.O. Management, LLC/ The Pottery, Inc.
    • Glass House Brands Inc.
    • $2.01
    • All of The Assets of Earth Circle Organics Chain Inc.
    • Bw Acquisition Corp
    • $0.43
    • Sweet Reason Beverage Co.
    • SOCALI Manufacturing, Inc
    • n/a
    • Trans American Aquaculture, LLC
    • Gold River Productions, Inc.
    • n/a
    • Olympic Organics, LLC
    • DTG Recycling Group
    • n/a
    • Kyani, Inc.
    • Amare Global, LP
    • n/a
    • Spice Chain Corporation
    • iSpice Foods Inc
    • n/a
    • Miracle Life Farm, LLC.
    • BlueFire Equipment Corporation
    • n/a

     

    Source S&P Capital IQ as of 10/13/2022 and PCE Proprietary Data

    PCE Transactions

    eBook- Keys to Selling Your Packaged Food & Beverage Company

    Contacts

    eBook- Keys to Selling Your Agriculture Business

     

    Michael Poole

    Michael Poole

    Orlando Office

    407-621-2112

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    David Jasmund

    David Jasmund

    Orlando Office

    407-621-2111

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    Data Assumptions

    This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

    Glossary

    EBIT - Earnings Before Interest and Taxes
    EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
    LTM - Last Twelve Months
    TEV - Total Enterprise Value

    Sources:

    1. "Food Price Outlook, 2022 and 2023." U.S. Department of Agriculture, 23 September 2022.
    2. Thomas, Patrick. "Food Supply Stays Tight as Disappointing U.S. Harvest Adds to Global Challenges." The Wall Street Journal, 20 September 2022.
    3. Carlson, Debbie. "USDA’s $2.8 billion for ‘climate-smart’ agricultural projects is a ‘huge step’ in fighting climate change." MarketWatch, 26 September 2022.
    4. Paris, Martine & Shanker, Deena. "Vegan Meat Sales Fall With High Prices Wokeness Turning Off Shoppers." Bloomberg, 26 September 2022.

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