- While major companies still make up a majority of total food and beverage sales, smaller companies are making their presence known and slowly leaching sales away from legacy brands.
- "The investment bank Jefferies reports that the [major] brands lost market share in 42 of 54 categories, from baby food to yogurt, over the last five years as new products gained," The New York Times reported.
- Big brands are facing this growing competition head-on by innovating new products or changing the recipes of existing products to make them healthier. But major food companies are also acquiring some of the fastest-growing smaller companies to improve their own portfolios and supplement the brands that are dwindling in popularity among consumers.
In addition to major companies gobbling up smaller, better-for-you food companies, investment firms have taken notice of the potential these companies offer as well. Last week, natural condiments maker Sir Kensington's received an $8.5 million investment from Verlinvest, a family-owned private equity group that has entrenched itself in the investments and stake ownership of new U.S. food companies.
Accelerators like AccelFoods and CircleUp, akin to those in Silicon Valley, are also generating early-stage financing and providing management and administrative consulting to these up-and-coming food businesses. Since its founding in 2011, CircleUp alone has raised $50 million for small food and beverage companies.
The Inc. 5000 list recently highlighted more than 150 of the fastest-growing private companies, companies which are coveted industry targets for acquisitions and investments.