Continuing our series on conference takeaways, we focus this time on portfolio companies in the food and nutrition industries.
These are the the key takeaways --
- Strategic Buyers continue to dominate Food and Beverage deals: In 2014 they accounted for 91.5% of the deals; this is up from 88.7% in 2010.
- Multiples were up 12.1x in 2014 (Source: Capital IQ).
- The following themes dominated conversation about food and beverage: “natural", "organic", "fresh", "functional", "indulgent”.
- The centre of the store offerings continue to lag.
- Change in market demands are reflecting a demographic change: a shift towards millennials, who tend to be better educated and more diverse.
- Millennials are looking for authenticity, transparency, and “eating clean”.
- Millennial Moms, who account for 1/3 of all food purchases, spend 66 hours online per week. Social media is critical in reaching them!
- Large Food and Beverage companies continue to buy smaller companies in order to remain competitive by bringing in innovative products. E.g., General Mills’ purchase of Annie’s Foods resulted in a 27x multiple.
- Emerging demand trends include Protein, Breakfast Alternatives, and Ethnic offerings.
- Smaller companies will succeed through innovation, outsourcing non-core functions and relentless focus on quality.
Stay tuned for our next installment!
