Dive Brief:
- Anthony Valentino, deputy editor of Mergermarket, expects more mergers and acquisitions in the food and beverage sector in 2017, according to an article in Food Business News.
- A report from Mergermarket showed last year had approximately 600 food and beverage deals, representing about $56.6 billion. This was a decrease from 2015, when roughly the same amount of deals were worth $119.3 billion.
- Valentino said his prediction for 2017 is based on pressure for private equity funds to put so called “dry powder” to work, since a lot of money is available for the big food and beverage conglomerates.
Dive Insight:
The merger of Kraft Foods and H.J. Heinz Co. in 2015 was one of the largest the industry has ever seen. While something of that scale is probably not going to happen anytime soon, companies do seem ready to make some big moves in 2017.
Numerous analysts champion the food and beverage mergers and acquisitions sector, and investors remain highly interested. And with companies such as General Mills, Kellogg and Campbell all starting their own venture capital funds to invest in food and beverage start-ups, it only stands to reason that more companies will follow suit in the year’s ahead.
These larger corporate venture arms eventually end up acquiring smaller companies. Meal kit companies and those concentrating on snacks and healthier foods are most in demand because of an increased interest in these products by consumers.
The Mintel Global Food and Drink Trends 2017 report showed consumers are expected to continue their search for healthy options that fit into everyday life. And convenience is key; Nielsen found there are more convenient meals available in the frozen aisle as more busy families are looking for healthy and quick options for meals.