The commercial landscape for food and beverage companies is undergoing a huge transformation, driven by shifts in consumer habits and global health trends. Many companies have therefore turned to M&A as a means of adapting their own businesses.
For instance, global soft-drink multinationals have diversified into other product lines, typified by Coca Cola’s purchase of Costa Coffee and Pepsi Co’s acquisition of Soda Stream. Glanbia, Freedom Foods, Molson Coors and Mars are all other examples of companies that have made acquisitions similarly focused on these changing consumer habits.
There has also been significant private equity interest in the sector. For instance, France-based MBO Partenaires acquired amino-acid leader BCF Life Sciences, and sparkling water group Spindrift recently closed a €17.5m funding round with VMG Partners. With continued shifts in consumer tastes and innovative new firms entering the sector, we expect food and beverage to remain a highly active sector for M&A.
Recent trade deals
- Irish global nutrition group Glanbia acquired SlimFast, the leading weight management and health and wellness brand, as well as nutritional supplement brands Healthy Delights and Nu-Therapy.
- PepsiCo bought Israeli fizzy drink maker SodaStream for €2.8bn. Originally founded in the UK, SodaStream once allowed customers to create fizzy drinks by adding flavoured syrups to carbonated water. The company now focuses on turning water into sparkling water.
- Coca-Cola acquired Organic & Raw Trading, which makes the MOJO brand of organic kombucha drinks, which are made from naturally fermented tea. Coca-Cola also recently acquired the Tropico brand of beverages in France, and has bought UK coffee chain Costa.
- Ingredients manufacturer International Flavors & Fragrances (IFF) acquired rival Frutarom Industries for €6.2bn including debt. The deal helps IFF gain access to new health-conscious brands.
- Flavours and fragrances maker Givaudan acquired French natural ingredients group Naturex for €1.4bn.
- Cott Corporation acquired US water brand The Mountain Valley Spring Company. Mountain Valley focuses on spring water bottled in a variety of glass bottles.
- Child nutrition and supplements specialist Laboratorios Ordesa acquired nutritional supplements brand Colnatur which has a range of collagen-based products. Laboratorios Ordesa is a leading company in child nutrition in pharmacies in Spain and operates a portfolio of more than 400 products. Clearwater International advised Laboratorios Ordesa on its acquisition.
- Freedom Foods acquired Australian protein product brand Crankt which produces a range of protein bars and drinks for both the Australian and New Zealand markets.
- US brewer Molson Coors acquired Clearly Kombucha which produces six non-alcoholic flavours of the fermented tea drink which is made by fermenting black or green tea with a symbiotic culture of bacteria and yeast.
- Nestlé Waters acquired a majority stake in Princes Gate Spring Water of the UK. In Britain consumers are increasingly choosing healthier hydration options and consequently the demand for high-quality spring and mineral water is increasing.
- Lassonde Industries bought US-based juice company Old Orchard Brands which produces a range of beverage products for the US market, including 100% fruit juices, reduced-sugar juice cocktails and flavoured teas.
- Mars acquired a minority stake in Kind, the maker of snack bars. Kind was one of the first popular snacks to eschew artificial flavours and preservatives.
- Kellogg acquired protein bar company RXBar, one of the fastest growing nutrition bar brands in the US.
Recent private equity deals
- French group MBO Partenaires acquired BCF Life Sciences from Céréa Capital and Sodero Gestion. BCF Life Sciences is a leader in amino acid extraction and one of its product ranges is of amino acids primarily used in infant nutrition, food supplements and clinical nutrition. Clearwater International advised MBO Partenaires on its acquisition.
- Spindrift, the sparkling water flavoured with real fruit, closed a €17.5m funding led by VMG Partners. The company’s growth has been driven by consumer demand for brands that offer simple ingredients and a focus on transparency. Spindrift makes a point of producing sparkling water free of artificial and natural flavours.
- Vitamin-enriched coffee and tea capsule manufacturer VitaCup secured funding from North Castle Partners and existing investor First Beverage Ventures. The company’s portfolio of coffee and tea products are fortified with a blend of essential vitamins, antioxidants and other functional ingredients.
- Capri Sun Group acquired a majority stake in Austrian beverage start-up all i need, as it seeks to further diversify its product portfolio and expand its presence in the healthy beverage market. The start-up produces a range of organic tea beverages.