Manufacturers in the food and beverage industry are increasingly turning to mergers and acquisitions to keep pace with consumer demands. In an era where speed is critical, many companies seem to find it to be faster and easier to form a partnership or make an acquisition, rather than invest in R&D or develop their own new products and brands from the ground-up.
The factors driving the trend
As economic recovery gains momentum and fuels a robust growth period in the food and beverage industry, expansion hungry manufacturers are eager to take advantage of new trends and the growing consumer obsession with the quality of the food they eat. Healthy snacks, plant proteins, clean labels, exotic taste experiences, neuro-nutrition, and socially mindful companies are all top-of-mind topics for today’s shoppers, especially millennials. Consumers now prioritize locally grown foods, sustainable farming, and organic and non-GMO foods, and are quite willing to read labels and research the origins of their meals, whether it be prepared in a four-star vegan restaurant or picked off the shelf of a corner convenience mart.
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However, some trends are short-lived. For example, kale is old news. Edible seaweed is now the new healthy sensation along with Omega-3s, antioxidants, probiotics, and even floral-based flavorings like jasmine, rose, and juniper. Pumpkin is being replaced by fig and pomegranate. Unicorn coloring is now a reality. Poke-bowl restaurants are popping up across the US, as are vertical farms, craft breweries, online sources for meal kits, and grocery stores which offer home-delivery and put your perishables in the refrigerator for you.
Unfortunately, the classic brands, the ones that were once the backbone of the food industry, are struggling to find their footing in this changing market. Many of these household food and beverage names have been bundled into offerings and shuffled among buyers and equity investors.
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