What’s on the Menu for 2016 Food & Beverage M&A?

Acquisition activity in the global food sector was hot during 2015 and is expected to remain strong in 2016. Two such examples of acquisitions in the sector last year include the announcement of the megamerger between AB InBev and SABMiller at £71bn - a deal expected to be formally completed early this year - with AB InBev reportedly selling a number of bonds to finance the takeover. The second quarter of 2015 saw the acquisition of British chocolatier, Thorntons, by Italian family-owned company Ferrero, which saw the latter acquire a 70% stake for £70 million in a deal that valued the entire group at £132 million.

It is not just megadeals that are predicted to be a hit in 2016, as the food and beverage industry has a long history of M&A activity. Historically, many of these deals have been between the larger players, yet there is a growing trend for smaller outfits to attract the interest of established players, thanks to consumer buying trends and the power of popularity. The acquisition of crowd funded Camden Town Brewery for £85m was one of three craft brewery acquisitions announced by AB InBev in December 2015 (the other two being US brewers).

This drive to conform to consumer trends through business marketing plans or through acquisition across the food and beverage industry has been highlighted in Mintel’s latest report. Its global food and drink analyst, Jenny Zegler, forecast the trends that will shape the global market this year, including a consumer focus on product origin and verified story, as well as increased emphasis on product ‘look’ - not only product taste - to encourage sharing.

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