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Michael Poole

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Industry Trends

2023's Food Industry Shifts

The $6 trillion food and agriculture industry, responsible for 70% of freshwater withdrawals, is poised to make water stewardship a key trend in 2024. As global water risks rise, strategies include extracting water from unconventional sources and sustainable agriculture. With 85% of food companies committed to regenerative practices, urban farming in restaurants, and a shift towards plant-forward diets, businesses are recognizing the impact of water efficiency. Brands emphasizing water sustainability stand to gain consumer appeal.1

2023's Food Industry Shifts

In 2023, the global food industry experienced transformative changes through mergers and acquisitions (M&A). Major manufacturers strategically repositioned themselves, and new trends emerged in response to evolving consumer preferences. The year witnessed persistent M&A activity in the pet food sector, with Post Holdings making strategic acquisitions. However, the spotlight shifted to the promising field of cultivated meat in December, as Clever Carnivore secured $7 million in funding to scale up lab-grown meat production.2

Food Product Streamlining

In the post-Covid market, companies like Malouf and Coca-Cola are streamlining their products, focusing on efficiency over variety. Success for new entrants now hinges on understanding consumer expectations and finding niches in focused product lines. According to Circana, new in-store items dropped from 5% in 2019 to 2% in 2023, showing a shift towards optimizing popular items and cost-effectiveness, challenging smaller brands to offer unique value in a competitive environment.3

ADM Acquiring Dairy Innovator Revela Foods

ADM is acquiring Revela Foods, a leading dairy flavor manufacturer, anticipating $240 million in 2023 sales. This strategic move bolsters ADM's presence in the $1.8 billion global dairy flavors and $3.2 billion savory flavors segments. The collaboration aims to synergize Revela's unique dairy flavor solutions with ADM's global capabilities, providing customers with an extensive range of ingredients and complete solutions.4

Quality and Value, Impacting 2024 Food Purchasing

Over 50% of shoppers plan to increase private brand purchases, citing value and quality. Key categories driving this trend include salty snacks and packaged breads. The increasing significance of private brand preference in consumers' store choices is evident, with 53% of respondents in a 2023 survey considering private brands important, marking a notable rise from the 46% reported in 2019. These trends will likely shape consumer shopping behavior and food retail strategies in 2024.5

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Hostess Brands, Inc.
  • The J. M. Smucker Company 
  • $5,631.19
  • United Malt Group Limited
  • Malteries Soufflet SAS
  • $1,442.93
  • Developed Market Gum Business of Mondelez International, Inc.
  • Perfetti Van Melle Group B.V.
  • $1,400.00
  • Daou Vineyards, LLC
  • Treasury Wine Estates Limited 
  • $1,002.33
  • La Colombe Torrefaction, INC.
  • Chobani Inc.
  • $900.00
  • MAPCO Express, Inc.
  • Majors Management, LLC
  • $266.00
  • All Assets of Perfection Pet Foods, LLC
  • Post Holdings, Inc.
  • $235.00
  • Blue Apron Holdings, Inc.
  • Wonder Group, Inc.
  • $141.65
  • Certain assets of Sunrise Growers
  • Nature's Touch Frozen Foods, LLC
  • $141.00
  • TDBBS, LLC
  • Central Garden & Pet Company 
  • $60.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Green Giant U.S. shelf stable vegetable product line of B&G Foods, Inc.
  • Seneca Foods Corporation
  • $55.60
  • Sahale Snacks, Inc.
  • Kar Nut Products Company, LLC
  • $34.00
  • Assets of Winc, Inc.
  • Project Crush Acquisition Corp LLC
  • $11.00
  • Ellwood Thompson's Local Market
  • Healthier Choices Management Corp.
  • $1.50
  • Go Fast Sports & Beverage Company LLC
  • Global Sciences Holdings, Inc.
  • $1.20
  • FGW Haight, Inc.
  • StateHouse Holdings Inc. 
  • $0.73
  • Country Wine & Spirits, Inc.
  • LQR House Inc.
  • $0.01
  • A&B Tropical Produce, LLC
  • GrubMarket, Inc.
  • n/a
  • Applewood Orchards, Inc./Applewood Fresh Growers LLC
  • FirstFruits Farms LLC
  • n/a
  • 12-unit Snappy Mart Stores chain of convenience stores in Grant County of W&N Enterprises Inc.
  • Fast Stop LA LLC
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • John A. Van Den Bosch LLC
  • Rubelmann Capital
  • n/a
  • Summit Hill Foods
  • EagleTree Capital, LP
  • n/a
  • J&K Ingredients, Inc.
  • SK Capital Partners, LP
  • n/a
  • Newport Lobster Company, Inc.
  • Bellevue Asset Management, LLC
  • n/a
  • Fera Pets, Inc.
  • Gold Medal Ventures
  • n/a

 

Source S&P Capital IQ as of 1/12/2024 and PCE Proprietary Data

PCE Transactions

Contacts

David Jasmund

Orlando Office

407-621-2111 |

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Michael Poole

Orlando Office

407-621-2112 |

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Will Stewart

Orlando Office

407-621-2124 |

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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. 1. Ewing, D. “Water Stewardship Will Be One Of The Biggest Food Trends In 2024.” Forbes, 29 October, 2023.
  2. 2. Coyne, A. “2023 – the year in food M&A.” Just Food, 18 December, 2023.
  3. 3. Berger, P. “Covid Slashed Consumer Choices. This Is Why They Aren’t Coming Back.” Wall Street Journal, 1 January, 2024.
  4. 4. Gelski, J. “ADM to acquire dairy flavor manufacturer.” Food Business News, 19 December 2023.
  5. 5. Moran, C. “More than half of shoppers plan to buy more private brands in the future, report finds.” Grocery Dive, 4 October, 2023.
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