For M&A investors, 2021 will be a year to remember. How will 2022 stack up? As we head into the new year, Harris Williams Industry Group Heads share their views on which trends will drive growth, key investor considerations, and the opportunities to be found in each of the industries we cover. We look forward to pursuing these opportunities in partnership with our clients in the months to come. 

How do you feel about M&A conditions heading into 2022 within your industry?

Consumers’ financial health drives everything we do, and their current health is very good. Through all the disruption of the pandemic, consumer spending has been resilient, although many spending patterns have shifted as new routines and hobbies have formed. At the same time, the consumer’s personal balance sheet is cleaner than before, debt is down and savings are up, giving people more flexibility regarding how they spend their money. Those factors have contributed to strong financial performance for consumer companies and helped fuel a robust consumer M&A market.

What should M&A investors keep top-of-mind in your industry this year?

Consumer companies have had to contend with a variety of incremental costs over the past few years—tariffs, labor shortages, wage increases, and higher input costs due to supply chain challenges. So far, many companies have been able to offset these costs through efficiencies or increased prices, which consumers have largely been willing to accept. The question is: Will inflation at some point erode demand? The good news for investors is that those companies that have had the flexibility to thrive in these conditions are truly battle-tested.

cons_quote-graphic_v1.pngName a few of the most significant trends that will drive growth in your industry in 2022.

Consumers formed new habits going into the pandemic and are now re-forming old ones coming out of it. Many consumers have become more health-conscious during the pandemic, driving demand for healthier foods and clean beauty products as well as the desire to get back to in-person fitness. And while online retail has obviously benefited during this period, we’re also seeing strong demand for products and services linked to getting out of the house. Travel has re-emerged, and consumers are spending again on experiences. 

Pet adoptions were up significantly during the pandemic, and pets continue to be a focus for consumer spending, with humanization driving ongoing innovation in areas like treats and supplements. And because we continue to use our homes in new ways, we’re also spending more on updating, adjusting, and maintaining them.

cons_neuner-graphic_v1.pngHow has your team delivered exceptional client service in this busy market?

When you have this much noise rippling through consumer markets, there are many more proof points required throughout a transaction. Our natural inclination and ability to dive into the data and help people understand nuances and opportunities have been very important. It’s especially critical when you can’t sit down in person with a CFO, but still need to give them information in a way that’s easy to understand quickly.

Along the same lines, with this many deals happening, some will hit bumps. We’ve been committed to not just having the easy conversations, but also drawing on our experience in the market to give our clients the candid advice they need.

Describe the market in three words: 

EVOLVING, ACTIVE, REWARDING

Select 2021 Transactions by the Harris Williams Consumer Group

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The Harris Williams Consumer Group has completed transactions across a variety of verticals, including branded consumer products; consumer services; food, beverage and agribusiness; and restaurant and retail. For more information on the Harris Williams Consumer Group and recent transactions, visit the Consumer Group’s section of our website.

To learn more, please contact our senior bankers.