FOOD & BEVERAGE M&A MARKET DYNAMICS
In Q1-25, US and Global Food & Beverage (“F&B”) M&A activity included 81 completed transactions in the US and 242 globally, representing a 34.7% and 24.1% decline, respectively, from the same period in 2024. Food and Beverage Manufacturing remained the most active subsegment, accounting for 54.3% of US M&A activity
What We’re Discussing With Clients
Regulatory Changes Underway in the U.S. F&B Sector
U.S. Food & Beverage companies are beginning to face regulatory changes under the new administration, including an upcoming ban on FD&C Red No. 3, an artificial coloring ingredient linked to potential health risks. The ban will require reformulation of food products by January 2027 and ingested drugs by January 2028. Companies have already begun scrutinizing product portfolios for restricted ingredients and assessing the timeline and costs of reformulation. For sellers, addressing these regulatory risks proactively can strengthen positioning ahead of conversations with customers, suppliers, and potential counterparties in a transaction.
Strategic Realignment in F&B
Legacy Food & Beverage brands are actively reassessing and repositioning their portfolios to better align with evolving corporate strategies focused on growth via the healthy living category and product innovation, sustainability initiatives, and supply chain resilience. This strategic shift comes amid a more cautious M&A environment, where buyers are not only seeking growth opportunities but also placing greater emphasis on ingredient sourcing, regulatory risks, and long-term brand alignment.
Growth in Protein Demand
Protein has emerged as a highly sought-after category in the Food & Beverage industry, driven by growing consumer demand for protein-rich options beyond traditional powders and bars. In response to this growing interest, many companies are actively developing innovative products that incorporate protein in new and appealing formats. Some businesses have elected to enter the market through strategic acquisitions, aiming to quickly establish a foothold and capitalize on this expanding trend.
