In a recent article posted on Mergers and Acquisitions, DeCandido, Galivan, and Cadigan explain what strategic buyers are looking for in packaged food deals. The article notes that, according to Food Marketing Institute, the average number of diners prepared at home in June of 2020 was up 11% from a year earlier. This trend has large consumer companies like Hershey’s, Nestle, and Tyson Foods active in the market looking for companies to acquire in order to enhance their brand portfolios. For example, Hershey’s recently acquired Quinn Snacks and Tyson bought out Memphis Meats. In the fourth quarter of 2020, there was $8 billion in transactions, which is up from $3.1 billion a year earlier. Additionally, just 45 days into 2021, transaction values have already reach $8.8 billion.
Two attractive features strategic buyers are looking for are dynamic online ordering capabilities and product differentiation. In order to compete with takeout and online ordering from restaurants, many companies are instituting on demand access to their products to enhance consumer convenience. Additionally, Companies are finding ways to differentiation their products in order to stand out from competitors. In particular, creating customized options for consumers is helping companies retain their customers by creating brand loyalty and helping drive down customer acquisition costs. Other attractive qualities in food deals are healthy, plant-based, and mission-driven products.
Read the Full Article Here: https://www.themiddlemarket.com/opinion/what-strategic-buyers-want-in-packaged-food-makers
