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Jan 18, 2018 / Richard Hall

33 ACQUISITIONS OVER $1 BILLION IN 2017

Out of a record 727 food and drink transactions covered by the bevblog.net mergers and acquisitions database for 2017, 33 involved sums over $1,000 million. This was higher than in each of the previous 5 years, except 2014.

GLOBAL FOOD AND DRINK ACQUISITIONS OVER $1 BILLION 2012-17

Global Food and Drink Acquisitions Over $1 Billion 2012-17

Sources: bevblog.net, Zenith Global

TOP 10 GLOBAL FOOD AND DRINK TRANSACTIONS 2017

Top 10 Global Food and Drink Transactions 2017

Sources: bevblog.net, Zenith Global

The $77 billion combined value of the top 10 was under half the $171 billion for the top 10 of 2016 and under a quarter of the $365 billion for the top 10 of 2015, but more than the $68 billion for the top 10 of 2014.

The 33 over $1 billion totalled $115 billion, compared with $190 billion for the 22 over $1 billion in 2016, $403 billion for the 27 over $1 billion in 2015 and $108 billion for 35 over $1 billion in 2014.

Link to database

Jan 17, 2018 / Richard Hall

Biggest buyers and sellers in 2017

Frutarom, Anheuser-Busch InBev, Heineken, Orkla and Unilever were the most acquisitive companies of 2017, according to the bevblog.net food and drink transactions database, with each responsible for 6 or more takeovers. Lactalis, Nestlé and US Foods all made 5 purchases.

Coca-Cola was only company to agree 5 or more sales, followed by Treasury Wine Estates on 4, then Asahi, Coke Consolidated, Kraft Heinz, Murray Goulburn, Nestlé and Unilever on 3 each. Coca-Cola undertook 14 separate divestments as it concluded its franchise restructuring.

A total of 1,161 companies were involved across 64 countries, with the United States and United Kingdom most prominent overall.

GLOBAL FOOD AND DRINK TRANSACTIONS BY COUNTRY 2016-17

Global Food and Drink Transactions by Country 2016-17

Sources: bevblog.net, Zenith Global

France was the biggest net buyer (+19), followed by Belgium (+16), Switzerland (+15) and Israel (+11).

The United States was the main net seller (-42), followed by the United Kingdom (-22), Australia (-10) and Brazil (-10).

Link to database

Jan 16, 2018 / Richard Hall

727 food and drink acquisitions in 2017

2017 was another record year for food and drink industry transactions, with 727 registered in the bevblog.net mergers and acquisitions database, an average of almost 14 each week.

The total is 103 more than in 2016 and 40% higher than five years ago. The number has increased each year apart from a dip in 2013.

GLOBAL FOOD AND DRINK ACQUISITIONS 2012-17

Global Food and Drink Acquisitions 2012-17

Sources: bevblog.net, Zenith Global

The most active sectors were dairy on 72, ingredients and soft drinks on 68, then packaging on 54. Beer on 40 was ahead of spirits on 37 and wine on 30.

GLOBAL FOOD AND DRINK ACQUISITIONS BY SECTOR 2016-17

Global Food and Drink Acquisitions by Sector 2016-2017

Sources: bevblog.net, Zenith Global

The top 15 sectors were the same as 2016, with the exception of plant-based replacing bottled water.

Plant-based deals quadrupled (+13), with nutrition up 121% (+17), meat up 67% (+16), snacks up 52% (+11), ingredients up 36% (+18) and dairy up 24% (+14). Wine activity dropped by 36% (-17) and packaging by 16% (-10).

Link to database

Jan 9, 2018 / Richard Hall

58 ACQUISITIONS IN DECEMBER

2017 ended with a flurry of substantial food and drink transactions out of 58 in total recorded on the bevblog.net mergers and acquisitions database.

10 reached $500 million and 6 of these exceeded $1,000 million.

• €6,825 million for Kohlberg Kravis Roberts private equity to buy Unilever’s spreads business

• $4,900 million for Campbell Soup to move on Snyder’s-Lance snacks in the United States

• $4,840 million for Thai Beverage to take a 54% stake in Vietnamese brewer Sabeco

• $3,900 million for Crown Holdings to purchase the Signode packaging business in the United States from Carlyle private equity

• $2,300 million for Switzerland’s Nestlé to gain Canada’s Atrium Innovations in nutrition from Permira private equity and others.

• $1,600 million for Hershey to win Amplify Snack Brands in the United States.

Among the 58, 13 were in alcohol, 5 in dairy, 5 in ingredients, 4 in nutrition, 4 in plant-based and 3 each in confectionery and frozen food.

25 were within national borders, including 16 in the United States and 5 in the United Kingdom. 33 were international. The US participated in 30 overall and the UK in 10, followed by Switzerland in 5, Canada in 4, Ireland in 3 and South Africa in 3.

Jan 4, 2018 / Richard Hall

Dramatic dairy

The 2017 Global Dairy Platform Annual Review contains some astonishingly big numbers about the scale of the dairy sector:

• 1 billion livelihoods supported, with

• 600 million people living on

• 133 million dairy farms;

• 10% of the world’s population directly dependent on dairy farming,

• 240 million employed directly and indirectly;

• 37 million dairy farms headed by women.

• 20% of the world’s agricultural land,

• 14% of global agricultural trade.

• 363 million dairy cattle,

• 816 million tonnes of milk produced a year;

• 44.4 litres of liquid dairy products consumed per person worldwide.

• All 17 United Nations sustainable development goals affected by dairy.

And yet:

• 2 cows is the average dairy herd size and

• 11 litres is the average daily yield of milk per farm.

Jan 2, 2018 / Richard Hall

Two most important words of decade

I spend much of my time trying to discern new trends and turning points in consumer behaviour. Being first to see the future means a better chance for clients to invest wisely and innovate effectively.

One of the ways I do this is to seek a single word to sum up a theme or direction of change. For years, I have made presentations about 20 trends for 20 years.

My ultimate objective has been to find just one word. Five years ago, that word was ‘easy’.

We live in an increasingly complex world. We know it’s hard to live up to expectation, to measure up to the best, to do what’s right, to eat sensibly and take exercise. We’d prefer governments, schools and food companies to make choices and actions more easy.

By and large, lifestyles have become more easy through improved technology and distribution. But we haven’t appreciated it as much as if we had to make more effort. We’ve taken it for granted. We’ve lost a sense of personal responsibility. We are connected to the internet but not to governance.

I have now come up with a second word that both complements and contradicts ‘easy’. It’s ‘control’.

It’s the cause of most division in society, across all countries. Everyone wants more, but feels they have less. Especially about nationhood and immigration.

In my opinion, control is a wishful thinking illusion. We’ve rarely had it, but somehow feel we had more in the past. The truth is we’re more dependent on each other than ever before. We’re better off talking than judging.

This all affects the food industry too. Consumers want to know more about where it comes from. Provenance and authenticity are becoming more important watchwords. Food now has to reflect consumer values as well as taste good.

Price is still important, but one of the biggest trends has been price polarisation, where the same consumer chooses cheap for everyday and premium for indulgence, even at the same time – such as a takeaway with a good wine.

Easy control is the great goal and conundrum of the decade.

Dec 28, 2017 / Richard Hall

Themes for 2018 – e-commerce

One of the key market changes worldwide in recent years has been the growth of online shopping.

The United Kingdom leads the way in Europe at 15% of total retail sales in 2016. Ireland, the Netherlands, Germany, France, Sweden and Poland were the next highest at between 5 and 10%.

France has developed a different model to the United Kingdom, with more than 4,000 drive-through click and collect outlets, making up 6% of total grocery sales.

Online food and drink sales reached $7 billion in France last year, representing 1 in 5 of all online purchases.

What about Amazon? One of the top executives at France’s Casino, which has announced a partnership with Britain’s Ocado, commented: “Amazon has developed a fantastic model in terms of non-food – but it has not been able to deliver in food.”

To which, I would just add ‘so far’.

Click and collect, home delivery, omnichannel … as they say in France, “la lutte continue.”

Dec 26, 2017 / Richard Hall

Themes for 2018 – environment

In the final weeks of 2017, plastic pollution of our oceans has become a prominent media concern.

The figures are as disturbing as the images:

• In 2010, over 8 million tonnes of plastic found its way into the sea globally, the equivalent of a garbage van every minute.

• More than half of this currently comes from 5 countries – China, Indonesia, the Philippines, Vietnam and Sri Lanka.

• The total could rise to 28 million tonnes by 2025.

• The United Nations has calculated that the world used 480 billion plastic bottles in 2016 and this will rise to 583 billion by 2021.

• By 2050 we may have the same weight of plastic in the sea as fish.

• By 2050, plastic will have been ingested by 99% of seabirds.

There is no question that industry has to act on this. In many ways, it already is – by reducing weight, by re-using bottles and by recycling as much as possible.

But far more needs to be done by governments and industry in concerted programmes, where failing to develop best practice is no longer acceptable.

I also believe there’s also new hope in new, renewable packaging materials.