Our Latest Insights

Serving up Growth: Diverse Opportunities Across the Food Service Value Chain1

The food service industry is large, diverse and experiencing steady growth. The industry supports a rich variety of related businesses, including equipment manufacturers, food service product distributors, service providers and others. With strong tailwinds that tend to defy economic cycles, the entire supply chain serving the food service segment is increasingly attractive to strategic buyers and investors.

Indeed, when it comes to segments with recession-resistant demand, food service has few rivals. Since 2000, the food service industry has grown at a steady CAGR of 4.8% (Figure 1). Consumer demand for food service offerings has stayed relatively stable throughout economic cycles, with significantly less volatility than general consumer spending. During the most recent recession, food service sales declined just 1.8% peak-to-trough, compared to all other retail sales, which saw a peak-to-trough decline of 12.1%.1

“That kind of steadiness is attracting significant attention from a very wide range of investors,” says Bob Baltimore, a managing director in the Harris Williams Business Services Group, “and it’s being driven by well-established demographic trends.”

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Our Outlook on 2019

According to Managing Director Bob Baltimore, buyers and investors will be focused on specialty distributors across multiple recession-resistant industries in 2019. See our full outlook.

 

What We’re Reading

Five Technologies That are Disrupting Distribution Right Now2

Change is scary and, for some, so is new technology. Trying to understand how futuristic-sounding technologies like “machine learning” and “bots” belong in today’s distribution company can feel overwhelming. But these new technologies are here now, and they’re already disrupting the industry.

Read more from this article here.

FedEx Freight Testing Last-Mile Delivery Service3

FedEx Freight has launched a pilot program for last-mile delivery services using branded 20-foot-long flat trucks with lift-gate capabilities for shipping heavy goods ordered online, the less-than-truckload unit of transport and logistics giant FedEx Corp. (NYSE:FDX) confirmed today.

Read more from this article here.

How US Foods is Cooking up Growth Through Digital Commerce4

The $24 billion distributor is taking a multi-pronged digital approach to better understanding customers as it seeks to expand market share.

A top-tier distributor to the food-service industry, US Foods Inc. has built out a digital strategy to better understand and serve the restaurants, universities and hotels among its more than 250,000 customers.

Read more from this article here.

Public Comparables & Trading Valuations

Key Trading Stats

As of January 11, 2019 ($ in millions, except per share amounts)

Specialty Distribution Public Comparables5

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M&A and Public Market Trends

M&A Transactions

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Economic Update

A Snapshot of Key Economic Indicators

As of December 31, 2018

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Note: A Manufacturing Inventory Index figure greater than 50 indicates expansion;
A Backlog Index figure greater than 50 indicates expansion.

 

 

1. Harris Williams

2. Modern Distribution Management

3. Freight Waves

4. Digital Commerce 360

5. Factset Transcripts

6. FactSet

7. Pitchbook

8. United States Census

9. U.S. Federal Reserve

 

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