1H 2022 Food & Beverage M&A Report

After a slowdown at the start of the Covid-19 pandemic, Mergers and Acquisitions in the Food & Beverage Industry accelerated through 2021, spurred in part – like other industries – by the hint of looming a higher capital gains tax rate that never materialized, while buyers leveraged low interest rates and significant stores of dry powder. We are seeing 2022 shaping up to be an active period as well as private equity remains active and larger, industrial brands look for smaller players to fill out their lineup. There are some concerns about rising interest rates, but for those with money to spend, both in private and public spaces, the struggling stock market could make acquisitions an attractive place to park money. Even in comparison to a robust 2021, dealmaking in the U.S. was up significantly in the 1Q22 as more realistic valuations are luring bigger players looking to add components and keep up with changing consumer tastes. We saw Mondelez – makers of Oreos and Ritz crackers – snap up Mexican bread maker Bimbo’s confectionary side for $1.3 billion and U.S. nutrition bar Clif Bar for $2.9 billion. Those consumer tastes and trends include growing demand for better food solutions, not just healthier and organic products. Health is still a concern after two years of a virus being in the news every day. But the rush to plant-based meat alternatives may be cooling as consumers start to think about how processed those alternatives must be. Concerned about the estimated $2.6 trillion in wasted food annually around the world, consumers have us looking at new companies that are combating food waste. And as 1H22 closed, food inflation was running above 10% in the United States and 9% in Canada…

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