FOOD & BEVERAGE M&A MARKET DYNAMICS
- M&A activity in the U.S. Food and Beverage market declined in Q2-25, with 403 transactions recorded over the trailing twelve months, down from 501 in 2024 and 468 in 2023. Global deal volume followed suit, falling to 1,185 transactions from 1,348 in 2024. Strategic buyers continued to lead the market, driving the majority of deal flow as they pursued portfolio diversification and geographic expansion.
- Although strategic buyers accounted for most of the transactions in Q2-25, overall deal volume remained down compared to the same quarter in the prior year. U.S. strategic transactions declined by 36%, while global strategic transactions fell by 23%. This slowdown can be partly attributed to ongoing integration efforts, as many active acquirers continue to digest previous deals, focusing on streamlining operations, integrating acquisitions, and addressing underperforming assets. These internal priorities have contributed to delays in pursuing new transactions.
What We’re Discussing With Clients
Manufacturing: Hold, Sell, or Scale?
PMCF is seeing a notable shift in how large food and beverage strategics are approaching their manufacturing footprints. In the first half of 2025 alone, we’ve seen a wide range of strategies employed. Smucker moved to divest private label and manufacturing assets, Conagra selectively held onto manufacturing facilities while shedding certain brands, Kraft Heinz announced its largest U.S. manufacturing investment in decades, and Post Holdings is reacquiring manufacturing assets it previously spun off. The contrasting moves reflect broader questions around supply chain control, margin enhancement, and portfolio focus, key themes we are actively discussing with clients as they assess their own strategies.
Consumer Trade-Down and Value Positioning
Lingering inflation fatigue is increasingly influencing consumer behavior, driving a noticeable shift toward private label and value-orientated brands across many food and beverage categories. In response, companies must carefully balance premiumization with affordability, ensuring their product portfolios meet evolving consumer expectations while protecting margins. Striking this balance is critical not only for maintaining brand relevance but also for capturing a broader share of wallets in a cost-conscious environment.
Actively Cautious Investors
As evidenced by financial buyer activity remaining muted in Q2 2025, sponsors are using a more disciplined approach, favoring add-on acquisitions for existing platforms over new platform investments. The limited supply of high-quality assets continues to fuel competitive tension in transaction processes across key categories, particularly better-for-you and functional foods, bakery, prepared foods, and food ingredients and distribution.
