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2022 Food & Beverage Industry Report

Posted on June 1, 2022 By

The global food & beverage services market is forecast to grow from $3,232.94 billion in 2021 to $3,678.61 billion in 2022. That represents a compound annual growth rate (CAGR) of 13.8%. Growth is primarily due to companies rearranging operations amid recovery from the COVID-19 pandemic that resulted in so many challenges for the industry. By 2026, the market is expected to surge to $5,235.52 billion at a CAGR of 9.2%.

In 2021, the largest region in the food & beverage services market was the Asia Pacific region, followed by North America.

The industry will continue to benefit from the increasing digitalization of food services. Consumers ordered more food online during the pandemic and are continuing to prefer to do so. This trend is likely to continue and will drive the market in the future.

Technology is also being adopted in more restaurants to improve customer satisfaction and drive sales. These innovations include self-ordering touchscreen kiosks and a variety of mobile apps for customized orders, quick payment, digital entertainment, and gaming.

Inflation, Supply Chains, and Labor Shortages
While COVID lingers, numbers improve, and many restrictions are lifted. But other issues are facing the industry. These include inflation, ongoing supply chain problems, and widespread labor shortages.

Inflation is a problem everyone faces, including consumers, food processors, grocers, and restaurateurs. This high inflation is expected to persist through most of 2022. Meat processors now have to predict how inflation and supply issues will impact consumer behaviors.

Most supply chain issues were due to restrictions and shutdowns during the pandemic. But that is not the only cause. There have been unpredictable and increasing demand from overseas. And extreme weather issues have been causing problems for agriculture, affecting the production of a wide range of products and services.

But the common thread that can be identified through all of these issues is the lack of labor. Nothing gets produced, processed, packaged, transported, cooked, or served without struggle. Labor shortages are expected to be a massive factor for the food & beverage industry this year.

Plant-Based Foods
Plant-based alternative proteins continue to disrupt the food & beverage space as more companies get in on the trend, causing the prices to drop. Consumers are becoming more interested in trying these products, especially as meat costs are up due to inflation. Data shows that more customers are willing to try these products for the first time. However, there are challenges to getting them to come back. Many people still find the flavor unappealing. These products are also highly processed, so the nutritional numbers are not as good as one might expect from a “vegetarian” type of product. Most plant-based products are still high in fat and sodium and some mysterious-sounding ingredients. Food companies view the plant-based category as one of its own rather than a replacement for actual meat products.

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Increasing Technology
Food & beverage technology has been growing strong in recent years. According to PitchBook, venture capital funding in food tech startups soared in the first quarter of 2021 to more than $10 billion across 241 deals. That is a quarter-on-quarter jump of more than 120%. This increase was primarily due to investments in e-commerce platforms.

There is also growing adoption of equipment, automation, and robotics. These technologies include innovative warehousing, artificial intelligence, self-service counters, and tech that helps with sustainability initiatives. These innovations are being used in various areas, including farm fields, production lines, and restaurants. Increasing adoption is expected to continue through 2022, especially amid labor shortages.

Consumers are becoming more educated about where their food and drink come from. This means companies need to cater to this increased awareness by offering more transparency in their processes. In addition, 32% of 16 to 24-year-olds avoid products with environmentally harmful packaging. This means that a sustainable strategy is needed for the long-term as this generation will eventually become a more critical customer base. Consumers care about bio-based and biodegradable packaging, eco-friendly certified, reef safe seafood products, fair trade, and sustainable farming.

Outdoor Dining, Delivery, and Ghost Kitchens
Outdoor dining is expected to become a mainstay post-COVID. Delivery—both restaurant takeout and groceries—will continue to increase in a very competitive market. And with concerns surrounding labor and food costs, ghost kitchens let restaurants operate more efficiently. These factors could complicate decisions regarding the costs of order & delivery platforms, brick and mortar stores, labor needs, inventory, technology, and customer loyalty programs.

DTC will continue to lead all other distribution channels. Data shows that 73% of consumers recently purchased groceries online. Consumer goods companies can counter shipping costs with improved logistics systems and fewer coupons and slotting fees. It also cuts out layers of costs for consumers.

2021 was a record-high year for M&A deal activity in the food & beverage sector, with 374 deals closing, marking the second-highest historic trailing twelve-month deal count. Following these high levels of M&A activity, Q4 2021 was the first quarter in a year not to pass 90 transactions. Last year’s activity was predominantly driven by strategic buyers (79% of deal value). Of the 374 deals closed, 71% were by privately owned buyers.

This record activity can be attributed to low-interest rates, strong capital markets, and accelerated transaction timelines. As a result, a recovery to previous levels of economic activity is expected in 2022. As global supply chains rebound and there is abundant capital in the market, 2022 is expected to be a strong year for M&A activity.

Schedule A Call

Americas: Sam Smoot at +1 (813) 898 2350 /

Europe: Michael Lawrie at +44 (0) 161 359 4400 /

Africa: Anthony McCardle at +27 21 300 2055 / 


Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $8.25B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 14 offices across the world, have assisted thousands of owners with achieving their personal objectives and ensuring the continued growth of their businesses.





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