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Exit and Growth Strategies for Middle Market Businesses

Archive for the ‘Food/Beverage’ Category

Food & Beverage Industry News

By Terry Fick | Oct 29, 2015

SundaeFood & beverage  shipments remain the most frequently targeted type of merchandise in US cargo thefts, and many food wholesalers are investing in new tools and technologies to protect their fleets from criminals. Food and drinks accounted for about 16% of thefts committed in the second quarter of 2015 and for 19% of thefts in all of 2014, according to a new report by FreightWatch. Thieves have gravitated toward items like high-end meats, seafood, produce, and frozen foods as distributors and transporters have focused on tightening security for higher-value shipments of nonfood products like pharmaceuticals and electronics, according to The Wall Street Journal. Since 2008 the average value of stolen food shipments has steadily risen as the overall volume of food theft has declined, suggesting that criminal groups are getting better at identifying high-value loads. Food wholesalers are implementing security measures such as GPS trackers, interior locks on trailer and container doors, and vehicle monitoring systems that transmit real-time alerts when truck doors are opened, Food Logistics reports.

The consumer price index for food, an indicator of food product values, rose 1.6 percent in September 2015 compared to the same month in 2014.

US nondurable goods manufacturers’ shipments of food products, an indicator of demand for food manufacturing, fell 1.2 percent year-to-date in August 2015 compared to the same period in 2014.

Read the Entire Food & Beverage 4th Quarter Newsletter Here


Food and Beverage M&A News

By Terry Fick | Aug 20, 2015

Beverage CansAs the global trend toward healthier foods continues, a key driver for M&A activity are targets in the organic, gluten-free, natural food and beverage segments. Larger established brands are counting on M&A as means to grow in the newer healthier environment. An example is Hormel Foods’ recent acquisition of Applegate Farms and its Applegate brand for $775 million. Applegate is a leading brand in the natural and organic value-added prepared meats category.

The trend towards healthier foods is also impact the value of established “junk food” brands. Diversified food companies in the US are shedding manufacturing operations amid weak demand for cookies and snacks. Post Holdings announced plans in March 2015 to close its PowerBar manufacturing facility in Boise, Idaho and shift production of the products to a third-party provider. Post’s decision reflects the difficult environment in the food and beverage industry, which has struggled as consumers’ tastes have shifted to healthy, fresh food, according to The Wall Street Journal. Post’s announcement comes a month after General Mills announced it will close a Pillsbury refrigerated baked goods plant in New Albany, Indiana, and little more than a year after Kellogg decided to shutter a cookie plant in Charlotte, North Carolina.

  • US nondurable goods manufacturers’ shipments of food products, an indicator of demand for food manufacturing, fell 0.8 percent year-to-date in May 2015 compared to the same period in 2014.
  • US retail sales for food and beverage stores, a potential measure of food demand, increased 3.2 percent in the first six months of 2015 compared to the same period in 2014.
  • According to data from the Interindustry Economic Research Fund, Inc. (IERF), revenue for US food manufacturers is forecast to grow at an annual compounded rate of 4 percent between 2015 and 2019.

Posted by Terry Fick.

Read the Entire Food & Beverage 3rd Quarter Newsletter Here


M&A Food and Beverage News

By Terry Fick | May 29, 2015

Shrimp CocktailIndustry consolidation was prevalent in 2014 as large manufacturers (Tyson merged with Hillshire), distributors (Sysco merged with US Foods) and retailers (Albertsons merged with Safeway) all looked to expedite growth through M&A. While megadeals like the aforementioned were not as common in Q1, there was plenty of activity in the sector. Many strategic players with strong balance sheets will take advantage of that fact coupled with excellent financing rates to keep accelerating top-line sales.

A shift in consumer tastes have resulted in recent plant closures as food manufacturers look to align production with demand. Many food companies in the US are shedding manufacturing operations amid weak demand for cookies and snacks. Post Holdings announced plans in March 2015 to close its PowerBar manufacturing facility in Boise, Idaho and shift production of the products to a third-party provider. Post’s decision reflects the difficult environment in the food and beverage industry, which has struggled as consumers’ tastes have shifted to healthy, fresh food, according to The Wall Street Journal. Post’s announcement comes a month after General Mills announced it will close a Pillsbury refrigerated baked goods plant in New Albany, Indiana, and little more than a year after Kellogg decided to shutter a cookie plant in Charlotte, North Carolina.

Sales of gluten-free products have grown by more than 30 percent annually in each of the last four years, reaching $973 million in 2014 — and that market could grow to $2 billion by 2019, according to a report from industry tracker Packaged Facts.

Posted by Terry Fick.

Read the Entire Food & Beverage 2nd Quarter Newsletter Here


M&A Trends in the Food & Beverage Industry

By Terry Fick | Dec 05, 2014

Cut VeggiesThe food and beverage industry is directly connected to the consumer and has been adapting to consumers who are more actively using social media and mobile technology in their buying decisions. Based on survey of executives in this sector by KPMG, an audit, tax and advisory firm, growth is of high priority. The main channels of growth, based on executive respondents, are product innovations, attracting new customers, capturing alternative sales channels, focusing on healthier and specialty products, and M&A activity. 

Read the Entire Food & Beverage 4th Quarter Newsletter Here

 

 

 


Q3 Food & Beverage Mergers & Acquisitions Update

By Kim Levin | Sep 05, 2014

Grains and BreadM&A activity in the Food and Beverage sector for United States based target companies in Q2 2014 included 68 closed deals according to data provided by S&P Capital IQ.  According to a report from PricewaterhouseCoopers, activity during the second quarter of 2014 was anchored by a few large value deals. The U.S. retail and consumer industry exceeded year-over-year deal value by 104 percent and volume by 52 percent.

 

Read the Entire Food & Beverage 3rd Quarter Newsletter Here


Q2 Food & Beverage M&A Update

By Kim Levin | May 30, 2014

SundaeM&A activity in the Food and Beverage sector for North American based target companies in Q1 2014 included 54 closed deals according to data provided by S&P Capital IQ. Approximately 80% of targets were acquired by strategic acquirers with the remained purchased by increasingly active private equity buyers. There continues to be a strong appetite among financials buyers to acquire organic branded food products along with vitamins and nutraceuticals.
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Read the Entire Food & Beverage 2nd Quarter Newsletter Here


Food & Beverage Q1 M&A Update

By Kim Levin | Mar 21, 2014

MBeverage Cans&A activity in the North American Food and Beverage sector for Q4 2013 through Feb. 1, 2014 included 160 deals announced or closed according to data provided by S&P Capital IQ. The sentiment is cautiously optimistic for an uptick in M&A activity in the food and beverage sector for 2014 based on an improving economy and the recent announcement of some large deals:

• In January 2014, Suntory Holding acquired Beam, Inc., for $15.9 billion.

• In October 2013, Campbell Soup Company sold its European soups and sauces business to private equity group CVC Capital Partners for more than 400 million Euro.

Read the Entire Food & Beverage 1st Quarter Newsletter Here


Food & Beverage M&A Activity Update

By Kim Levin | Jan 03, 2014

Grains and BreadM&A activity in the North American food and beverage sector in the third quarter of 2013 was sparked by 120 deals announced or closed in the period according to data provided by S&P Capital IQ. The most active subsectors included packaged food and meats, distillers and vintners and agricultural products. M&A activity was strong in 2012, with several major acquisitions including Campbell Soup’s acquisition of Bolt House, Kellogg’s acquisition of Pringles and Con Agra’s acquisition of Ralcorp. These transactions bode well for continued deal activity throughout 2013 as capital continues to become more available.

Read the Entire Food & Beverage 4th Quarter Newsletter Here


Food & Beverage M&A Activity Update

By Kim Levin | Aug 23, 2013

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M&A activity was up in the Food & Beverage (“F&B”) sector in 2012. Transaction volume, aggregate value and multiples were all higher year over year as the economy showed improvement and tax-minded business owners got nervous about an impending capital gains hike. In Q1 2013 activity slowed as a result of tax-driven M&A deal activity that pulled transactions into Q4 2012. However, according to a report from Deloitte, trading multiples across various F&B industry sectors (food packagers, ingredients, beverages, and retail) increased modestly on average during Q1 2013, compared to Q4 2012.

Read the Entire Food & Beverage 3rd Quarter Newsletter Here