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Middle market M&A deals quarterly: food and beverage

Thoughts on mergers & acquisitions in the consumer products industry

INSIGHT ARTICLE  | 

Each quarter RSM’s senior industry analysts and mergers and acquisitions professionals provide a glimpse into the consumer products deal environment. In this article, we are featuring deal activity through Q2 2021 within food and beverage sector.

While on-trend food and beverage companies are still attractive to both private equity firms and large brands, so far in 2021, with deal counts exceeding pre-pandemic levels, the M&A landscape has shifted to add-on acquisitions that provide additional market share or entrance into new segments rather than the multibillion-dollar, debt-heavy mergers from years past. Brands preparing for sale that demonstrate strong customer connectivity, particularly those selling direct to consumers, health benefits or convenience options are attracting significant interest from potential buyers.

Illustrative deals

Nestle acquired Nuun & C. Inc.

  • Nestlé’s health science division acquired Nuun in early Q3; Nuun’s product portfolio includes dissolvable tablets and powders for health-focused consumers.

GrubMarket acquired Sierra Produce.

  • In June 2021, GrubMarket acquired Sierra Produce, a provider of South American fruits to the United States. Sierra will expand GrubMarket’s product portfolio on their platform.

L Catterton acquired a majority stake in Kodiak Cakes.

  • L Catterton acquired a majority stake in Kodiak Cakes, a leader in the better-for-you breakfast category, offering a variety of whole-grain-based pancake, waffle and oatmeal products.

Stonewall Kitchen LLC acquired Vermont Coffee Co.

  • In March 2021, Stonewall Kitchen acquired Vermont Coffee Company; it’s an organic coffee company popular in the Northeast that adds to Stonewall’s beverage portfolio.

Neptune Wellness Solutions Inc. acquired a controlling interest in Sprout Foods.

  • Neptune acquired 50.1% of Sprout Foods in early 2021; Sprout focuses on organic plant-based baby food and toddler snacks.

What’s happening?

The shift in M&A activity noted above presents acquisition opportunities for middle market food and beverage companies that consistently demonstrate the ability to sustain pandemic-level performance and build upon the elevated brand awareness established.

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