M&A Advisory

Fri, May 13, 2022

Food and Beverage M&A Landscape – Spring 2022

Bob Bartell, CFA

Josh Benn

Howard Johnson

Jon Pratt

Farzad Mukhi

Devin Kennealy

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M&A deal activity in the food and beverage space slightly decreased in Q1 2022. There were 363 deals closing over the trailing 12-month (TTM) period ending March 31, 2022. Transaction volumes in Q1 2022 were lower than the previous year, with 82 deals announced compared to 93. Q1 2022 marks the seventh consecutive quarter with over 80 deals announced in the North American food and beverage space.

Food and Beverage M&A Landscape - Spring 2022

M&A activity in the food and beverage sector in Q1 2022 TTM is still predominately driven by strategic buyers (including companies primarily owned by private equity investors), with strategic transactions representing 78% of total deal value. Of the 363 deals closed over Q1 2022 TTM, 260 (72%) were completed by privately owned buyers.

Following an unprecedented year of deal flow, Q1 2022 transaction volume remained strong with a slight decrease year over year due to a variety of economic headwinds. Expected interest rate hikes, global tensions, inflationary pressures and supply chain issues have caused unexpected volatility in the market. Specifically in the food and beverage manufacturing space, capacity pressures have risen from labor shortages, increased wages and inventory scarcities that have shown significant complication to operations. The remainder of 2022 is projected to see strong sales growth, although at a more moderate pace than 2021. Large cash reserves from public companies and an abundance of dry powder in the market will likely continue driving M&A transactions. Given some of the macro headwinds and fears of a recession currently permeating the market, we believe the food and beverage industry will remain an attractive, defensive sector for investment and acquisitions. With an abundance of capital in private equity markets and large corporate players realigning their strategic vision, we believe 2022 is trending toward another strong year of M&A activity in the food and beverage space.

Read our report to learn more about transaction trends and market activity.

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Food and Beverage M&A Landscape – Spring 2022

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