Transformation in the food industry: the new trend in M&A

Mergers and acquisitions in the food industry

Superfoods are all the rage, not only because of their almost magical nutritional properties, but also because of the boom in mergers and acquisitions that is occurring in this niche of the food industry. Content creators and influencers are not the only ones joining this trend; large industrial food groups and private equity giants are investing in matcha tea, chia seeds, avocados or high-protein snacks. No wonder when the global superfood market is estimated to grow by 9.2% (CAGR) through 2027, reaching a valuation of $214.95 billion.

What is happening in the food sector?

We are increasingly concerned about the quality and nutritional value of the food we eat. This factor, together with the search for a clean label, the replacement of meat protein with vegetable alternatives and sustainability, has led to the need to give a name to superfoods with a high vitamin, amino acid or antioxidant content. Blueberries, seeds, exotic fruits such as açaí, teas with immune-boosting properties, quinoa, ginger or natural additives are examples of all the ingredients that could be included in this category. Such is the trend that we have observed an increase in corporate movements focused on food companies that distribute this type of food.

In the last year, more than 230 corporate transactions focused on superfoods have been carried out at the international level. The United States leads the ranking of closed acquisitions with a total of 69 deals, followed by Canada (25), the United Kingdom (18), France (13), Russia (13) and China (10). In Spain, we identified a total of 6 majority acquisitions of companies focused on the production of foods with high nutritional value since September 2021. We highlight the acquisition of the Huelva producer Atlantic Blue, dedicated to the cultivation of blueberries and berries, by the Chilean Hortifrut S.A., for a deal value of approximately 241 million euros.

Another transaction closed in Spain was the purchase of Tropical Millenium, a Malaga-based mango, avocado and papaya producer, by the Chilean company Baika, ensuring its expansion in the Spanish market. On the other hand, Indukern, part of the Ravago Group, acquired Galenicum Special Ingredients, to strengthen its position in nutritional supplementation, sports nutrition and dietary products. In January, the purchase of the Madrid-based Tecnufar, a supplier of natural additives, by the European group Oquema was formalized.

According to the information published, the multiples being agreed in the aforementioned transactions are between 10 – 12 times EBITDA. One of the largest acquisitions was CVC Capital Partners’ purchase of Dutch ekaterra, a manufacturer of teas and other herbal beverages, for a valuation of US$5.2 billion.

The big players in superfoods:

But who are really the big players in this new fashion? Large multinationals in the food sector have already participated in operations of this type. Mondelez acquired Clif Bar & Company, which specializes in high-energy bars, at a valuation of $2.9 billion, in June of this year. Heinz acquired 85% of Germany’s Just Spices for $242 million in December 2021. Nestlé, Kellogg’s and Danone have also been involved in operations in this niche. In Spain, the Apex Group has made two acquisitions in the past year: Viube Foods, a vegetable snack manufacturer from Catalonia, and Arias y Octavio, a nut specialist from Ciudad Real, Spain. Interestingly, 76% of the buyers were large industrial companies in the food sector, while only 16% were investment companies (private equity, venture capital).

Although North America currently leads this trend, it is very likely that it will eventually spread to Europe because of the number of companies in the superfood niche. In Spain, we are leaders in the production of tiger nuts, olive oil, carob beans and other legumes, all of which are considered foods high in vitamins and antioxidants, so we are likely to see greater dynamism and new capital flows entering the country attracted by these types of companies.

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