FDBusiness.com

M&A Activity Will Drive Growth in Food and Beverage Sector

 Breaking News
  • New Head For Arla Foods UK Arla Foods, the leading European dairy co-operative, has announced the departure of its UK Managing Director, Tomas Pietrangeli, who is leaving the company to become CEO of Danish retail group Dagrofa. Pietrangeli will be replaced by Ash Amirahmadi, who is currently SVP – Sales for Arla Foods in the UK. Tomas Pietrangeli will leave on 30 June [...]...
  • HKScan Invests in its Kristianstad Plant in Sweden HKScan, the Nordic meat and food group, is investing close to €7 million in its Kristianstad plant in Sweden. This is one of the steps in HKScan’s strategic development of the entire value chain, from farm to fork. The investment further modernizes Sweden’s largest pig slaughterhouse and strengthens thereby further HKScan’s operational footprint. “HKScan’s investment increases [...]...
  • Craft Beer Revolution is Here to Stay Royal DSM, a global science-based company active in health, nutrition, and materials, has published a new report in its Global Insights Series which indicates the consumer demand for craft beer is not likely to slow down anytime soon. The report, which surveyed 3,300 consumers in seven countries in the Europe and US, shows that 4 [...]...
  • DeutscheBack Reduces Acrylamide in Bakery Products With Innovase ASP DP, DeutscheBack now offers manufacturers of bakery products an enzyme system that prevents the formation of acrylamide in baked goods such as biscuits, wafers, bread and rolls. A simple dosing makes the new solution easier for bakers to use than enzyme concentrates and enables adherence to the statutory tolerances for acrylamide without [...]...
  • AllinAll Ingredients Officially Opens New €5 Million Facility in Dublin An Taoiseach Leo Varadkar, TD (pictured above left), has officially opened AllinAll Ingredient’s new state-of-the-art manufacturing and Research and Development facility in Rosemount, Dublin. The company, which has been in the food industry for over 20 years, develops and manufactures ingredients, sauces and blends for the processed food market. Its R&D lead team have developed [...]...

M&A Activity Will Drive Growth in Food and Beverage Sector

M&A Activity Will Drive Growth in Food and Beverage Sector
May 04
10:30 2012

The recent acceleration in M&A activity within the food and beverage industry in the UK and Ireland is set to continue, according to business and financial advisor Grant Thornton. The firm’s research report ‘Where is the Smart Money going in Food and Beverage?’ gathered opinions of senior representatives from private equity (PE) houses and corporates currently investing in the food and beverage (F&B) sector across the UK and Ireland.

The research found that 80% of PE respondents plan to conduct M&A activity in the sector and 80% of corporate respondents believe that sector growth in the same period will be achieved through acquisition. This suggests that the recent uptick in M&A activity in food and beverage will continue.

Trefor Griffith, head of Food and Beverage at Grant Thornton, says: “Our research backs up the level of activity we are witnessing and shows that the time is ripe for M&A activity. Most businesses have reacted to the downturn by tightening their operations and processes.”

He adds: “Strategies such as re-engineering products, removing waste and cutting out non-value-adding activities are all having an impact. These leaner, battle-hardened businesses have worked out how to survive and even grow, so M&A at home and abroad is the next logical step.”

In 2011, overall M&A deal numbers rose 22% on the previous year reaching almost pre-recession levels. The vibrancy of activity in the sector last year, together with the report’s investor predictions for the coming year, suggest that the trend for sector consolidation is showing no signs of slowing.

Corporate (87%) and PE respondents (59%) agreed that the primary driver of consolidation is cost savings, the need for which is a by-product of vast change in the market, and responding to consumer tastes, demand and buying habits. Both PE (73%) and corporate (87%) respondents also believe that the main driver of growth in the next year will be new product development (NPD).

Trefor Griffith continues: “Whilst NPD is vital for survival it also represents significant capital outlay in tough economic times. Consequently some businesses have acquired brands to bolt on to their existing portfolio with a view to adding value to these brands rather than innovating from scratch. This is evidenced by the acquisition of Fray Bentos by Baxters and the recent activity by Symington’s which has been acquiring brands such as Chicken Tonight and Ragu.”

For small and medium sized businesses, growth is often difficult to achieve, so strategic acquisition is one way to move forward. 60% of PE respondents and 80% of corporates believed acquisition will be a key driver of growth in the sector in 2012. In order of preference the most attractive niches for PE respondents were healthy eating, branded and premium; for corporate respondents branded, own label and premium topped the list.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • June 25, 2018Packaged., The 7th Global Summit
  • September 5, 2018Int'l Food Products and Processing Technologies Exhibition (WorldFood Istanbul)
  • September 15, 2018iba
  • September 25, 2018PPMA Show 2018
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements