Summary of the most important M&A deals in the food and beverage sector in 2021


Food and beverage M&A activity remained robust in 2021 amid rising Covid cases. Emerging consumer goods brands that benefit from large traditional categories, particularly chocolate confectionery, snacks and beverages with an emphasis on health and wellness, have been bought out by consumer giants with historic deal values.

Analysts expect bright prospects for M&A in all major sectors, including consumers, starting in 2022, as a recent Dykema poll showed that 75% of respondents expect a strengthened US M&A market in the next 12 months. The optimism stems mainly from strong balance sheets and liquidity, balanced equity and debt and the impending retirement of the owners of baby boomers, they noted.

Among the food and beverage subcategories, precision agriculture is likely to see record M&A activity in 2022, PitchBook predicted. Fermented protein is also set to see significant gains in adoption this year as the addition of VC funding drives growth.

Here is a roundup of the top food and beverage transactions in 2021:

MondelÄ“z ‘acquisition of Hu Chocolate

Deal size: $ 361 million

Revaluation: $ 388.17 million

Vegan and paleo chocolate maker Hu Master Holdings was acquired by Mondelēz in January on an estimated $ 361 million deal. The oreo biscuit maker previously made a minority stake in Hu through its SnackFutures venture hub before taking full ownership. According to PitchBook, Hu raised $ 10 million in total funding through January 2021 and had revenue of $ 32 million by year-end.

Market importance: Old consumer goods companies like Mondelēz and PepsiCo

PEP
, set up their own venture units and startup accelerators to keep up with the latest consumer trends. Onboarding emerging brands into these programs is usually perceived as an early sign of larger collaborations in the future. Much like brands recently devoured by MondelÄ“z, including Tate’s Bake Shop and Perfect Snacks, Hu is now expected to leverage the snacking powerhouse’s distribution network and supply chain to move from the natural and specialty channel to mass retailers like Target. to grow

TGT
. Read more about Hu’s founders’ incredible entrepreneurial journey here.

Hersheys

HSY
Acquisition of Lily’s Sweets

Deal size: $ 423.19 million

Revaluation: $ 423.19 million

Low-sugar chocolate maker Lily’s Sweets was acquired by Hershey in June as part of the U.S. chocolate giant’s efforts to bolster its growing snacks portfolio for better snacks. The company, which was founded by Cynthia Tice to sweeten classic chocolate indulgence with stevia, has increased its sales by three-digit numbers annually in 2020 and 2021, according to PitchBook, reaching US $ 110 million before the takeover.

Market importance: There has never been a lack of innovation in the multi-billion dollar chocolate confectionery category, and competitions only seem to intensify with emerging brands, including mid-day squares hitting the market with full force lately. Lily’s Sweets’ strong growth reflects the market’s growing appetite for reduced-sugar and total sugar-free confectionery in the US, sales of which are projected to grow 3.3% and 14.6% annually, and $ 241.4 million and Euromonitor, respectively, in 2021 -Data showed. Read the original Breaking News here.

L Catterton’s acquisition of Kodiak Cakes

Deal size: Between $ 800 million and $ 1 billion (estimated)

Revaluation: N / A

Utah-based Kodiak Cakes, which offers a range of premium breakfast products including flapjack waffles, granola muffins, oatmeal, and brownie mixes made with whole grains that are free of fats, preservatives, and sugar, was won by the largest private Consumer equity group, L Catterton, acquired in an estimated $ 1 billion LBO deal in July. The company’s total revenue increased from $ 200 million in 2020 to $ 1.58 billion in 2021, PitchBook revealed. Kodiak Cakes raised a total of $ 33.82 million prior to the acquisition.

Market importance: L Catterton has named Kodiak Cakes a “strong brand” in the attractive breakfast and snack categories. The deal also showed that brands sometimes prefer strategic PE as buyers of large CPG, as the former could offer more value and benefit. L Catterton expects to open the next growth chapter for Kodiak Cakes, with approximately $ 30 billion in equity, including investments in The Honest Company, Plum Organics, Sweet Leaf Tea and Home Chef.

Coca-Cola’s

KO
Acquisition of BodyArmor

Deal size: $ 5.6 billion

Revaluation: $ 8 billion

Beverage heavyweight Coca-Cola took full control of New York-based sports drinks maker BodyArmor for $ 5.6 billion in November. The maker of beverages filled with electrolytes, coconut water, and vitamins previously raised a total of $ 326 million in funding, according to PitchBook, and increased its annual sales last year by 40% to $ 1.4 billion. Early celebrity supporters include Jennifer Lopez, Carrie Underwood, and the late NBA basketball starter Kobe Bryant.

Market importance: Sports drinks are a rapidly growing sector where traditional soda makers continue to make money to appeal to the growing number of health conscious buyers. Mintel

INTC
Estimated sports and performance drinks will be valued at around $ 13.6 billion in 2025, down from $ 10.8 billion in 2020. The deal with BodyArmor signals Coca-Cola’s efforts to compete against PepsiCo, the with Gatorade has a significant share in this market. Previously, Coca-Cola divested several sub-par brands including Zico and Odwalla to accelerate its sales growth.

Hershey’s acquisition of Dot’s Pretzels

Deal size: $ 1.2 billion

Revaluation: N / A

Dedicated to creating a “snack powerhouse,” Hershey has acquired premium pretzel maker Dot’s and its co-maker for $ 1.2 billion. The brand reportedly accounts for 9% of the total pretzel category market share of $ 2 billion and has grown rapidly at a rate of 131.88% over the past year to reach sales of $ 160 million. The deal is the second largest in Hershey’s history as the chocolate giant moved further into the permissible salty snack category through a number of acquisitions over the years, including Pirate’s Booty and SkinnyPop’s parent company Amplify. Dot’s is also the fastest growing U.S. pretzel brand, according to PitchBook, accounting for 55% of total pretzel category growth in 2021.

Market importance: Legacy CPG brands continue to penetrate the fast-growing global healthy snacks market which, according to Grand View Research, is projected to reach $ 32.88 billion in sales over the coming years, increasing by 5.2% between 2014 and 2025 CAGR is growing. Brands with in-house manufacturing capabilities like Dot’s are particularly attractive to potential buyers as they are perceived as being more scalable. Hershey also previously invested in Quinn Foods, launched by Kristy Lewis over a decade ago, to reinvent traditional hearty and delicious snacks with better ingredients and more sustainable agriculture. Read more about their founder’s vision and growth plans here.


Comments are closed.