M&A exercise within the meals and beverage area remained strong throughout 2021 in opposition to the backdrop of surging Covid circumstances. Rising CPG manufacturers capitalizing on massive conventional classes, particularly chocolate confectionery, snacks, and beverage, with a well being and wellness focus have been snapped up by shopper giants in historic deal values.
Analysts anticipate a rosy outlook for M&A throughout main sectors together with shopper coming into 2022, as a latest Dykema survey confirmed 75% of respondents anticipated a strengthened U.S. M&A market within the subsequent 12 months. The optimism primarily comes from sturdy stability sheets and liquidity, balanced fairness and money owed, and the looming retirement of child boomer house owners, they famous.
Amongst subcategories of meals and beverage, the precision agriculture area will probably see file M&A exercise in 2022, PitchBook predicted. Fermented protein will even see important widespread adoption good points this yr with recording VC funding fueling the expansion.
Right here’s a recap of probably the most important meals and beverage transactions in 2021:
Mondelēz’s Acquisition Of Hu Chocolate
Deal Dimension: $361 Million
Put up Valuation: $388.17 Million
Vegan and paleo chocolate producer, Hu Grasp Holdings, was acquired by Mondelēz in January in an estimated $361 million deal. The Oreo cookie maker beforehand made a minority funding in Hu by means of its enterprise hub, SnackFutures, earlier than taking its full possession. Hu raised a complete funding of $10 million as of January 2021, in keeping with PitchBook, and has reached $32 million in income by yr finish.
Market Significance: Legacy shopper companies, equivalent to Mondelēz and PepsiCo
Deal Dimension: $423.19 Million
Put up Valuation: $423.19 Million
Low-sugar chocolate producer, Lily’s Sweets, was acquired by Hershey in June, as a part of the U.S. chocolate large’s efforts to spice up its rising portfolio of better-for-you snacking manufacturers. The corporate, which was based by Cynthia Tice to make use of stevia to sweeten the basic chocolate indulgence, has seen its income enhance yearly by journey digits all through 2020 and 2021, in keeping with PitchBook, reaching $110 million earlier than the acquisition.
Market Significance: There’s by no means been a scarcity of innovation within the multibillion-dollar chocolate confectionery class, and competitions solely appear to accentuate with rising manufacturers, together with Mid-Day Squares coming into the area in full power recently. The high-growth of Lily’s Sweets displays the rising market urge for food for reduced-sugar chocolate and total sugar-free confections within the U.S., that are anticipated to develop 3.3% and 14.6% yearly in gross sales, reaching $241.4 million and $735.4 million in 2021, respectively, Euromonitor information confirmed. Learn the unique breaking information here.
L Catterton’s Acquisition Of Kodiak Desserts
Deal Dimension: Between $800 Million And $1 Billion (estimated)
Put up Valuation: N/A
Utah-based Kodiak Desserts, which presents a line of premium breakfast objects together with flapjack waffles, granola muffins, oatmeal, and brownie mixes utilizing entire grains which might be free from fat, preservatives and sugar, was acquired by the most important shopper non-public fairness group L Catterton in an estimated $1 billion LBO deal in July. The corporate’s complete income has grown from $200 million in 2020 to $1.58 billion in 2021, PitchBook confirmed. Kodiak Desserts raised $33.82 million in complete funding earlier than the acquisition.
Market Significance: L Catterton has referred to as Kodiak Desserts a “highly effective model” throughout the enticing better-for-you breakfast and snacking classes. The deal additionally indicated how manufacturers generally want strategic PE to massive CPG as their purchaser because the former may provide extra worth and benefits. L Catterton expects to unlock the following chapter of progress for Kodiak Desserts with roughly $30 billion in fairness capital, together with investments in The Sincere Firm, Plum Organics, Candy Leaf Tea, and Residence Chef.
Deal Dimension: $5.6 Billion
Put up Valuation: $8 Billion
Beverage heavyweight Coca-Cola has taken full management of New York-baed sports activities drink firm BodyArmor for $5.6 Billion in November. The producer of drinks filled with electrolytes, coconut water and nutritional vitamins has beforehand raised a complete of $326 million in funding earlier than the deal, in keeping with PitchBook, and has grown 40% in annual income final yr to achieve $1.4 billion. Early movie star backers embody Jennifer Lopez, Carrie Underwood, and the late NBA basketball begin Kobe Bryant.
Market Significance: Sports activities drink is a quick rising sector, the place conventional soda makers are persevering with to money in to attraction to the rising variety of health-conscious consumers. Mintel
Hershey’s Acquisition Of Dot’s Pretzels
Deal Dimension: $1.2 Billion
Put up Valuation: N/A
Dedicated to making a “snacking powerhouse,” Hershey has acquired premium pretzels maker Dot’s and its co-manufacturer for $1.2 billion. The model reportedly accounts for 9% market share of the general $2 billion pretzel class, and has been rising quickly at a 131.88% price over the previous yr, reaching $160 million in income. The deal is the second largest in Hershey’s historical past because the chocolate large continued to push into the permissible salty snack class by means of a collection of acquisitions over time, together with Pirate’s Booty and SkinnyPop’s mum or dad Amplify. Dot’s can also be the fastest-growing scale U.S. pretzel model, in keeping with PitchBook, representing 55% of the overall pretzel class’s progress in 2021.
Market Significance: Legacy CPG manufacturers proceed to push into the quick rising international wholesome snacks market which is predicted to achieve $32.88 billion in income within the coming years, in keeping with Grand View Analysis, rising at a 5.2% CAGR between 2014 and 2025. Manufacturers with self manufacturing capabilities, equivalent to Dot’s, are significantly enticing to potential acquirers as they’re considered as higher outfitted to scale. Hershey has additionally made an funding in Quinn Meals beforehand, launched by Kristy Lewis over a decade in the past to reinvent conventional savory and indulgent snacks with better-for-you components and sustainable farming. Learn extra about their founder’s imaginative and prescient and progress plans here.