What We’re Seeing

Market Update1

The M&A landscape in the food and beverage industry is active and is witnessing several notable transactions. Hostess Brands agreed to acquire Voortman Cookies, a manufacturer of premium, branded wafers as well as sugar-free and specialty cookies, for $320.0M. PepsiCo agreed to acquire BFY Brands, a better-for-you snack innovator focused on addressing the consumer trends toward healthier living and eating, for an undisclosed amount. Anheuser-Busch agreed to acquire Craft Brew Alliance, a marketer and seller of craft beers, for $380.8M.

What We’ve Been Doing

Closed Harris Williams Transactions

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What We’ve Been Reading

America’s Largest Grocer is Revamping Its Produce Section

In an effort to maximize consumers’ “fresh is key to the food shopping experience,” Walmart will refurbish its produce sections with new signs calling attention to its prices and shorter merchandise bins to create an “open market feel” for customers. According to a Nielsen study, produce sales grew 2.6% last year while 95% of people prefer to buy produce in store. Jon Springer, executive editor of Winsight Grocery Business, commented, “It plays to big, overarching consumer trends in health and wellness." In an effort to meet these consumer trends, Walmart will organize its organic items into one section of the store and make them easier to locate as a way to persuade customers that Walmart offers premium fruit and vegetables. The company's grocery sales account for 56% of its revenue.

Access the full article here.

Shelf Space Outpaces Fresh Food Sales, Study Finds

According to Deloitte Insights’ new “Future or Fresh” report, two-thirds of consumers increased their spending on the fresh food category over the last two years. However, despite the prominence given to fresh foods in stores, growth rates are not living up to their potential. Stephen Rogers, executive director of Deloitte’s insights consumer industry center, explained, “Retailers and manufacturers have ample opportunity to stimulate consumer demand by targeting followers and highlighting the value proposition of fresh food through communication on sourcing, safety, and healthy eating.” Moving forward, to increase consumer spending on fresh foods, companies need to have a small, centralized fresh food staff and implement technologies and analytics focused on freshness prediction, advanced analytics and improved supply chain management and store operations to help bring the promise of fresh food and better prices.

Access the full article here.

Vital Signs

Commodity Price Indices1

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Protein Price Indices2,3

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Restaurant and Grocery Store Sales Indices4

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Consumer Food Price Index Inflation2

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Key Trading Statistics1

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Public Equity Market Overview

Public Company Sector Performance (Median One Year Change in Stock Price)1

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Recent Equity Offerings5

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Food and Beverage Industry Stock Performance Index4

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M&A Market Overview*

Highlighted Food and Beverage M&A Transactions1

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Hostess Brands to Acquire Voortman Cookies

  • Hostess Brands to acquire Voortman for $320.0M
  • Based in Ontario, Canada Voortman manufactures premium, branded wafers as well as sugar-free and specialty cookies
  • The acquisition will help Hostess Brands diversify and expand its product offerings and manufacturing capabilities to compete in the large and growing $8.4 billion cookie category and will extend Hostess Brands’ growing portfolio of better-for-you sweet snacking products

 

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PepsiCo to Acquire BFY Brands

  • PepsiCo to acquire BFY Brands for an undisclosed amount
  • Based in Middletown, NY, BFY Brands is a global, diversified, better-for-you snack manufacturer with branded products including PopCorners and Rice Rounds 
  • The acquisition will further expand Frito-Lay’s snacking portfolio and further deliver on its “Winning with Purpose” vision to offer consumers more positive nutritious options

 

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Anheuser-Busch to Acquire Craft Brew Alliance

  • Anheuser-Busch to acquire Craft Brew Alliance for $380.8M
  • Based in Portland, OR, Craft Brew Alliance brews, brands, and brings to market American craft beers and operates breweries and brewpubs across the U.S.
  • The acquisition will diversify and expand product offerings of Anheuser-Busch and help fuel Anheuser-Busch’s growth in the craft beer category

 

Food and Beverage M&A Trends1

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Latest Deals and Announced Private Equity Activity1

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* M&A transactions include European and cross-border deals since 2015.

Debt Market Overview

Food and Beverage Loan Activity6

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Recent Debt Offerings7

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M&A Overview*

Median LTM Trading Multiples & Quarterly Food & Beverage M&A1

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Recent Food and Beverage M&A1

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* M&A transactions include European and cross-border deals since 2015.

Food and Beverage Earnings Release Calendar

Earnings Release Calendar1

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Public Comparables1

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1. Capital IQ

2. Unweighted Average

3. U.S. Census Bureau

4. U.S. Bureau of Labor Statistics

5. Thomson Financial

6. S&P

7. Reuters

 

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