The Food and Beverage sector rounded off 2024 with solid M&A activity, recording a total of 412 transactions over the year. While deal volume in the fourth quarter dipped slightly to 104 deals, down from 113 in Q3, the overall trend remains positive.
The key takeaway of the report was that food and beverage companies continue to draw buyers due to the sector’s inherent stability, resilience, and innovation.
The uptick in deal making during 2024 is indicative of the sector’s robust health, particularly in Consumer Packaged Goods (CPG), which has seen benefits from rising prices. As was the case throughout the year, Q4 saw a majority of transactions in the CPG space, ranging from billion-dollar deals to smaller mid-market acquisitions.
A consistent trend in Q4 involved large CPG companies acquiring healthier snack brands, driven by shifting consumer preferences and changing shopping habits. Private label producers also garnered buyer interest, mirroring the year-long shift towards more affordable alternatives as consumers opt for these budget-friendly options.
While major corporate players such as Mars and Campbell’s Soup were responsible for some of the year’s largest deals, including Mars’ $36 billion purchase of Kellanova and Campbell’s $2.3 billion acquisition of Sovos Brands, many of the deals throughout 2024 were of a more modest scale. Smaller transactions are expected to remain the dominant feature of M&A activity, given the limited opportunities for major acquisitions. Buyers are likely to continue focusing on deals that are financially manageable and align with their core business strategies.
The restaurant sector experienced its fair share of turbulence in 2024, with several high-profile bankruptcies making headlines.
Many eateries are still grappling with the aftermath of the pandemic, compounded by the stricter enforcement of financial covenants by banks and landlords.
However, not all news was bad. Q4 saw several notable multi-unit restaurant acquisitions, from large franchise takeovers to investments in fast-casual brands in regional markets.
M&A activity in the agribusiness segment has been muted over the past couple of years, as many companies have struggled with financial distress caused by volatile commodity prices and high operational costs such as those for fertiliser, equipment, and labour.
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Despite this, there are signs of recovery, with cooling inflation and improving commodity prices offering some hope, although trade disruptions remain a concern.
Other notable transactions in Q4 included Granite Creek Capital’s purchase of Global Animal Products, a manufacturer of feed additives for the beef, dairy, and poultry markets.
While deal makers had hoped for a surge in activity in 2024, the anticipated boom did not materialise. However, there is optimism for 2025, with expectations that lower interest rates, easing inflation, and a reduction in regulatory restrictions will pave the way for a strong year of acquisitions.
With dry powder available from both private equity firms and corporate buyers, the outlook for the year ahead remains promising.
Sector breakdown
In Q4 2024, packaged food producers and beverage manufacturers led the way in deal volume, with 34 and 27 transactions, respectively. Significant deals included Butterfly Equity’s $1.95 billion acquisition of fine wine producer The Duckhorn Portfolio, and PepsiCo’s $1.2 billion purchase of Siete Foods, a maker of better-for-you products. The packaged food segment also saw mid-market activity, such as J.M. Smucker’s sale of its Voortman cookie brand to Second Nature Brands for $305 million.
The fresh food segment remained active, with 14 deals recorded in Q4. Noteworthy transactions included Fresh Express, a provider of value-added salads, acquiring McEntire Produce, a fresh-cut processor and wholesaler. Happy Egg, a free-range egg brand, also merged with Egg Innovations, a regenerative farming business.
In the restaurant industry, deal flow remained consistent throughout 2024, with 12 transactions in Q4. The largest deal was the sale of Jersey Mike’s Subs to private equity firm Blackstone for an estimated $8 billion. In the mid-market, fast-casual Hawaiian chain Mo’Bettahs sold a majority stake to Blue Marlin Partners and Trive Capital.
This deal marks a growth milestone for the concept, which plans to open 20 new locations in 2025, expanding its current footprint of around 50 restaurants.
Despite challenges in the restaurant and agribusiness segments, the overall outlook for 2025 is positive, with expectations of a strong year driven by easing inflation, lower interest rates, and abundant investment capital.