Blog Author

Michael Poole

E: mpoole@pcecompanies.com

Follow me: LinkedIn

Industry Trends

Surge in Acquisitions Signals Food Industry's Hunger for Change

Despite rising borrowing costs, U.S. packaged food companies are actively pursuing M&A deals to infuse fresh concepts into their product lines. Notably, the food and beverage industry is prominent in the M&A landscape this year, boasting a 17.5% surge in deal volumes, underlining its significance. Major food corporations are strategically leveraging g M&A opportunities to align with shifting consumer preferences and sustain their market relevance.1

Campbell Soup's Acquires Sovos Brands

Campbell Soup Company's recently announced its intention to acquire Sovos Brands for $2.7 billion, a move that will add premium brands like Rao's to its portfolio at a 14.6x adjusted EBITDA multiple. This acquisition not only strengthens its presence in the premium food market but also has the potential to reshape the competitive landscape and drive earnings growth in adjacent sectors. The move underscores the importance of strategic acquisitions for companies seeking sustainable profitability and market expansion.2

USDA's Investment Sparks Agricultural Innovation

The USDA is offering up to $10 million in competitive grants through the 2023 Specialty Crop Multi-State Program (SCMP) to enhance the competitiveness of the specialty crop industry. SCMP funding supports collaborative, multi-state projects that address issues like food safety, disease prevention, research, and marketing for specialty crops like fruits, vegetables, and nuts. This initiative is significant for the agriculture industry, promoting innovation and sustainability in the specialty crop sector, ultimately benefiting growers and consumers alike.3

How 'Extreme Value' Stores Are Changing the Shopping Game

"Extreme value" retailers are currently experiencing a surge in sales, with Ollie's Bargain Outlet showcasing a 13.7% increase, largely due to the 10% increase of higher-income shoppers seeking cost-effective options in 2023. Traditional grocers can learn from this by prioritizing affordability, expanding their product offerings, and making the most of their strengths, such as offering fresh meat and produce, to stay competitive in today's changing retail environment.4

Cultivated Meat's Regulatory Journey

Cultivated meat has entered the U.S. market under the regulatory oversight of both the USDA and FDA, while the industry grapples with challenges like cost and consumer acceptance. New directives from the USDA and FSIS offer regulatory clarity. However, only two of the 150 companies have secured approval to market their products. This ongoing struggle highlights the obstacles the cultivated meat sector faces in its quest for broad acceptance.5

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Franchise Group, Inc.
  • Undisclosed Buyer
  • $3,461.63
  • Substantially all of the assets of Vital Pharmaceuticals, Inc.
  • Blast Asset Acquisition LLC
  • $362.00
  • Certain Assets Relating to the Snack Bars Business Unit of Treehouse Foods, Inc.
  • John B. Sanfilippo & Son, Inc.
  • $63.00
  • Assets of ACJ International, LLC
  • The Andersons, Inc.
  • $41.40
  • Sunnyside Medical Cannabis Dispensary
  • Undisclosed Buyer
  • $4.52
  • Cook San Francisco, LLC
  • DDC Enterprise Limited
  • $3.30
  • Medical cannabis retail operation in Monaca, Pennsylvania of Ascend Wellness Holdings, Inc.
  • Evelyn Capital, LLC; Big Plan Holdings
  • $3.25
  • The Urgent Company, Inc.
  • Superlatus, Inc
  • $1.25
  • Assets of Argo Tea, Inc.
  • The Planting Hope Company Inc.
  • $0.27
  • Cold Stone Creamery, Inc.
  • Spirit Halloween Superstores LLC
  • n/a

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • MacroCap Labs Inc
  • Peninsula Capital Partners, L.L.C.; A111 Capital
  • n/a
  • NS Brands Ltd.
  • Blue Road Management, L.P.
  • n/a
  • Anheuser-Busch InBev SA/NV
  • Bill & Melinda Gates Foundation Trust
  • n/a
  • City Line Distributors, Inc.
  • Frontenac Company LLC
  • n/a
  • INTERNATIONAL FRUIT GENETICS, LLC
  • Paine Schwartz Partners, LLC; EQT AB (publ) (OM:EQT); AM FRESH Group
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Sea Fresh U.S.A., Inc.
  • Oceano Seafood SA
  • n/a
  • Business of O'Neill Coffee in West Middlesex
  • George J. Howe Company
  • n/a
  • Ballreich Snack Food Company, LLC
  • Grippo Potato Chip Company, Inc.
  • n/a
  • TSS Brands Limited Liability Company
  • Avalon Spirits Corporation
  • n/a
  • NS Brands Ltd.
  • Blue Road Management, L.P.
  • n/a
  • Flour Manufacturing and Warehouse Facility in Oskaloosa, Iowa
  • Grain Processing Corporation
  • n/a
  • Coffee Brewing at Neutral Groundz
  • Beans Coffee Company, LLC
  • n/a
  • Lamm Food Service, LLC
  • GS Foods Group, Inc.
  • n/a
  • HesterEats LLC
  • Undisclosed Buyer
  • n/a
  • Sagamore Whisky, LLC
  • Disaronno International LLC
  • n/a
  • Mendez International Tropical Foods, Inc.
  • GrubMarket, Inc.
  • n/a
  • JFS Altius Farms
  • Jewish Family Service Of Colorado, Inc.
  • n/a
  • Farmer Peet of Peet Packing Peet Packing Company
  • Dearborn Sausage Company, Inc.
  • n/a
  • Ginger Juice
  • Undisclosed Buyer
  • n/a
  • Harmon Foods, Inc.
  • Hy-Vee, Inc.
  • n/a

 

Source S&P Capital IQ as of 10/11/2023 and PCE Proprietary Data

PCE Transactions

Contacts

David Jasmund

Orlando Office

407-621-2111 |

Read More

Michael Poole

Orlando Office

407-621-2112 |

Read More

Will Stewart

Orlando Office

407-621-2124 |

Read More

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. 1. Sophia, D. "U.S. food companies go deal hunting as pandemic growth fades.” Yahoo Finance, 8 September, 2023.
  2. 2. Campbell Soup Company. “Campbell to Acquire Sovos Brands, Leader in High-Growth Premium Italian Sauces.” Campbell’s, 7 August, 2023.
  3. 3. U.S. Department of Agriculture. “USDA Announces $10 Million in Grant Funding Available for the Specialty Crop Multistate Program.” USDA, 24 August, 2023.
  4. 4. Wassel, B. “What Can Supermarkets Learn from the Success of ‘Extreme Value’ Retailers?” The Food Institute, 13 September, 2023.
  5. 5. Flood, E. “The sticky regulatory landscape of cultivated meat and what to expect next.” Food Dive, 31 August, 2023.
RELATED RESOURCE
RELATED RESOURCE

Keys to Selling Your Packaged Food & Beverage Company

Read now
contact usan image