These Four Trends Drove Food & Nutrition M&A in 2019

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health food Wondering what fueled private equity’s appetite for food & nutrition deals in 2019?

All told private equity firms made 153 investments in U.S. and Canadian food & nutrition companies through mid-December, according to Sutton Place Strategies.

As to why, look no further than the rapidly evolving eating habits of consumers. Here’s four things they’re craving:

 

  • Snack foods: Some six in 10 adults say that, rather than a few big meals, they would prefer eating small snacks throughout the day, according to a study by Mondelez International. A recent deal illustrating this trend: Atlas Holdings of Greenwich, Connecticut acquired Flagstone Foods, a Minneapolis-based maker and distributor of private-label healthy snacks, including trail mix and dried fruit.

 

  • Ethnic foods: Some 87 percent of consumers say they’ve ordered ethnic food or a dish featuring ethnic flavors, according to a study by Technomic; more than a third say they enjoy eating “regional varieties of mainstream ethnic cuisines.” A recent deal illustrating this trend: San Francisco Equity Partners acquired a majority stake in Portland, Oregon-based Brazi Bites, a maker of Brazilian cheese bread snacks and empanadas.

 

  • Healthy ingredients: Seven in 10 American consumers say they prefer foods or beverages that lack artificial ingredients, according to a survey by the International Food Information Council; more than three-quarters try to limit or avoid sugars. A recent deal illustrating this trend: Butterfly Equity of Beverly Hills, California acquired Bolthouse Farms, a Bakersfield and Santa Monica, California-based provider of healthy foods and beverages, such as baby carrots.

 

  • Sustainability: Well over half (59 percent) of American consumers say that the sustainability of the foods they purchase is either very or somewhat important to them, according to the same survey. A recent deal illustrating this trend: The investment in Vital Farms, a producer of sustainable, pasture-raised poulty and eggs, by Manna Tree Partners.

The food & nutrition deals tracked by Sutton Place Strategies are defined to include agriculture, consumable food products and food-related products and services. They do not include alcohol or restaurant transactions. The 153 deals cited includes platform deals, add-ons, financings and recapitalizations.

 

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