Mergers & Acquisitions

Food & Beverage M&A

Food and Beverage M&A

Our food and beverage team combines financial expertise with an insider’s mastery of current trends, challenges, and opportunities within the world of M&A. From processing and manufacturing to production and distribution, we’ll give you the advice you need to maximize the value of your company when it comes time to sell.


Our Food and Beverage M&A Experience

Morgan & Westfield sells the following types of businesses in the food and beverage sector:

  • Food and Beverage Manufacturers and Processors
    • Alcoholic beverages – breweries, distilleries, and wineries
    • Cereal, snack, and confectionary manufacturers
    • Commercial bakeries and pastry, cookie, cracker, and tortilla manufacturers
    • Dairy product producers
    • Frozen specialty food manufacturers
    • Fruit and vegetable processors and canneries
    • Non-alcoholic beverage manufacturers – soft drinks, bottled water, ice, energy drinks, and other beverage producers
    • Pet food manufacturers
    • Seafood and animal producers
    • Specialty food processors – nuts, coffee, tea, condiments, and more
    • Supplement manufacturers
  • Food and Beverage Wholesalers and Distributors
    • Confectionary merchant wholesalers
    • Dairy product wholesalers
    • Non-alcoholic and alcoholic beverage wholesalers
    • General line grocery merchant wholesalers
    • Packaged frozen food wholesalers
    • Poultry, seafood, and meat wholesalers
  • Food and Beverage Retailers
    • Mutli-chain beer, wine, and liquor retailers
    • Multi-chain convenience stores
    • Multi-chain supermarkets and other grocery stores
    • Multi-chain specialty food retailers – fruit, vegetable, meat, fish, seafood, baked goods, confectionary, and other specialty shops

*Note that we generally do not handle transactions at the two ends of the supply chain – agricultural entities such as farms, and foodservice providers such as restaurants. Please contact us for any possible exceptions.


Your Lead M&A Advisor

Jacob Orosz, President of Morgan & Westfield

  • Founder and President: Founded Morgan & Westfield in 2008, focusing on sell-side services, and the leader in many middle-market transactions.
  • Author of Food and Beverage M&A: Food and Beverage M&A – An Insider’s Guide to Selling a Food or Beverage Business (850 pages), the most comprehensive resource available today on selling food and beverage companies.
  • Host of Food and Beverage Talk: Host of the #1 podcast on mergers and acquisitions in the food and beverage sector.
  • 20+ Years of M&A Experience: Over 20 years of experience facilitating mergers, acquisitions, sales, and other business transfers.
  • 300+ Transactions: Successfully participated in or managed the sale of over 300 privately held companies, representing buyers and sellers in North America, Central America, South America, Europe, and Asia.
  • Author of 5 Books on M&A: The Art of the Exit, A Beginner’s Guide to Business Valuation, The Exit Strategy Handbook, Closing the Deal, and Acquired.
  • Host of M&A Talk: Host of the #1 podcast on mergers and acquisitions – M&A Talk.

Resources on Selling Your Food and Beverage Company


Investment Bankers to the Food and Beverage Industry

A global network of diverse businesses, the food sector is multifaceted and supplies most of the food the world’s population consumes. Today, the industry ranges widely – from small, traditional, family-run, highly labor-intensive activities to large, capital-intensive, and highly mechanized industrial processes.

The food supply chain is not a singular chain of entities but rather a web of interconnected businesses that aim to make food available to the world’s population. In thousands of food and beverage manufacturing plants across the country, employees transform unrefined agricultural materials into products for intermediate or final consumption.

The food and beverage field consists of several complex and dynamic business models, which vary by subsector. While the industry remains fragmented, it has consolidated into larger, integrated operations in recent years. Regardless of sector, size, and type of operations, numerous forces are reshaping the industry by introducing new business models, and we are here to help you navigate the terrain and assist with your next transaction.

Are you considering selling a business in the food and beverage industry?

With our long-standing experience in the food and beverage industry, we provide you with in-depth expertise for the most favorable outcomes. Our deep knowledge of a variety of food and beverage transactions in the middle market means we can offer you critical, time-sensitive help you need throughout your transaction. From our first meeting to closing, we are fiercely dedicated to your goals. With an extraordinary depth and breadth in the food and beverage markets, our investment banking team has the operational and transactional experience to ensure the best possible outcomes for you.

Food and Beverage Investment Bankers

Our team has the insight and familiarity to guide you through this complex and dynamic environment. We understand how forces interact to affect your business. We have proficiency and knowledge of the entire value chain. And our understanding spans all transaction sizes, types, and drivers, from marquee strategic transactions to emerging market acquisitions.

Morgan & Westfield’s understanding of the industry can help you maximize your price. Schedule a confidential consultation today to see how we can help you.

Reasons for Acquisitions in the Food Industry

As the number of independent companies dwindles, the appetite for acquisitions in the food industry remains high as legacy brands seek to remain competitive and capitalize on consumer trends.

The sector is experiencing a revolution between changing consumer demands and sustainability goals, increased costs, regulatory pressure, and supply chain constraints.

Here are some of the underlying drivers of acquisitions in the sector:

  • Product or Category Expansion
    • Buyers may decide to expand their product or category ranges by buying a competitor.
  • Geographic Expansion
    • Buyers frequently expand into new geographic markets. For example, international companies often seek to expand into the United States.
  • Consolidation
    • Legacy brands are experiencing slow growth. To counter this trend, these companies capitalize on synergies and economies of scale, which increase buying power with raw materials or selling power with retailers, or sales growth to improve margins.
  • Intellectual Property
    • Buyers acquire smaller companies as an alternative to doing their own research and development.
  • Changes in Consumer Preferences
    • Consumers, governments, and investors are pressuring food and beverage companies to innovate to improve sustainability, reduce waste, and create healthier alternatives. For example, consumers are eating healthier snacks, which now account for approximately 40% of U.S. packaged foods. Beverage companies, such as Coca-Cola and PepsiCo, and cereal manufacturers, such as Kellogg’s, have entered new markets to capitalize on trends.

Buyers in the Food and Beverage Industry

While the acquirers in the industry are diverse, some trends have emerged in recent years. Here’s a summary of the types of buyers most active in the food and beverage industry:

Private vs. Public Buyers

  • Public Buyers: 20% to 25% of buyers are public entities.
  • Private Buyers: 75% to 80% of buyers are private entities.

Private Buyers – 75% to 80% of buyers are private entities.

  • Strategic Buyers: Represent approximately 70% to 80% of transactions.
  • Private Equity Buyers: Remain active in the food and beverage field and have been responsible for approximately 40% to 50% of activity in recent years. Private equity investors are often focused on early-stage, high-growth companies where there is less competition from large trade buyers that prefer to innovate internally or acquire more established businesses.

EBITDA Multiples for Food Businesses

In considering EBITDA multiples for valuing a business, a discount must be made when valuing a privately held company. A summary of recent enterprise value (EV) to EBITDA (earnings before interest, taxes, depreciation, and amortization) multiples for publicly traded companies in the food and beverage manufacturing and processing subsector is as follows:

  • Alcoholic beverages: 13 to 19 x EBITDA
  • Branded processed/packaged food: 12 to 14 x EBITDA
  • Better-for-you/natural or organic: 14 to 21 x EBITDA
  • Baked goods: 11 to 12 x EBITDA
  • Dairy: 10 to 14 x EBITDA
  • General food processors: 12 x EBITDA
  • Ingredients: 11 to 14 x EBITDA
  • Meat: 6 to 11 x EBITDA
  • Non-alcoholic beverages: 15 to 18 x EBITDA
  • Pet: 9 x EBITDA
  • Produce: 11 x EBITDA
  • Snacks: 15 to 18 x EBITDA

Acquisition Activity by Subsector

Here’s a summary breakdown of acquisition activity by subsector:

  • Agribusiness: 12%
  • Beverage: 32%
  • Branded packaged goods: 39%
  • Natural and organic: 9%
  • Snacks: 6%

Factors Affecting the Industry

Today, the food and beverage industry is changing faster than at any time in its history. Multiple forces, including climate change, demographic shifts, new technologies, evolving consumer tastes, and international trade policy drive disruption across the entire value chain.

A summary of the primary factors likely to continue to affect the industry follows:

  • Shipping Rates
    Shipping rates are expected to stay elevated in the coming years. High prices are squeezing smaller companies, whereas larger companies are more likely to negotiate favorable terms.
  • Energy Prices
    Energy cost management and energy efficiency will remain top priorities for the industry. Energy prices will crimp margins and affect input costs. The question is, who in the supply chain will absorb these costs?
  • Labor Shortages
    As staff shortages continue, firms will speed toward automating processes, which will continue to affect capital investments.
  • Supply Chain Issues
    Supply chain issues will remain affected by geopolitical events and increased input costs, such as fuel prices. The challenges vary based on where the company sits in the supply chain. However, these factors will continue to cause delays and rising costs for importing and shipping raw materials.
  • Consumer Demand
    Stronger consumer demand and a change in consumer consumption patterns will lead to higher valuations, which may lead to companies seeking an earlier exit.
  • Interest Rates
    As high-interest environments become more common, economic factors will have a greater impact on the industry than in the past several decades.
  • Economic Slowdown
    Undoubtedly, inflation and the corresponding drop in household spending will affect the food and beverage market. Shopping baskets are getting smaller and more expensive, causing shoppers to seek less costly substitutes or no substitutes at all.
  • Inflation
    The sector is exposed to current economic and political instability affecting global supply chains. Production and labor costs can expect higher inflationary pressures over a longer period than for other goods.

Types of Food & Beverage Businesses We Sell

Food Manufacturers and Processors

  • Baked goods and ingredients manufacturers
  • Better-for-you/natural or organic processors
  • Branded processed and packaged foods manufacturers
  • Cereal and grain processors
  • Confectionary manufacturers
  • General food processors
  • Children’s and baby food manufacturers
  • Dairy product producers
  • Frozen food manufacturers
  • General food businesses and other conglomerates
  • General food processors
  • Meat and seafood producers and distributors
  • Pet food manufacturers
  • Plant-based and free-from manufacturers
  • Snack processors
  • Spices and condiment manufacturers
  • Supplements and nutraceutical processors

Beverage Producers

  • Wineries, distilleries, and brewers
  • Non-alcoholic beverage manufacturers
  • Coffee, tea, and energy drink producers
  • Beverage bottlers and packagers

Wholesalers, Distributors, and Packagers

  • Logistics and distribution providers
  • Grocery distributors
  • Confectionary merchant wholesalers
  • Dairy product wholesalers
  • Non-alcoholic and alcoholic beverage wholesalers
  • General line grocery merchant wholesalers
  • Packaged frozen food wholesalers
  • Poultry, seafood, and meat wholesalers

Technology Providers

  • Food technology companies
  • Food software companies

Retailers

  • Online Retailers
    • Online meal-kit retailers
    • Online meal, grocery ordering, and delivery companies
  • Traditional Retailers
    • Grocers
    • Retail food stores
    • Vending and automated food service providers
Food and Beverage M&A Book

Food and Beverage M&A Book

Want to learn more about selling a food and beverage business? Read our book – Food and Beverage M&A – An Insider’s Guide to Selling a Food or Beverage Business.

Read more