Fierce Global Food Fight Over What’s on Your Plate

Capital is flowing to thousands of innovative upstarts and mid-market companies who are driving the growth of the food industry and taking an ever increasing bite out the dominant market share of Big Food’s legacy brands.

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  1. Global M&A activity in consumer goods has skyrocketed since 2009 (up nearly 10x), particularly in the food and beverage industry. What is behind this surge?
  2. 3G / Kraft Heinz highlights the challenges Big Food companies are facing to reinvent themselves. Will they be able to handle the long-term shifts in consumer tastes?
    • Kraft Heinz’s proposed $143B takeover of Unilever, one the biggest deals in recent memory, was rejected. Kraft Heinz is also rumored to have targeted Mondelez. If consolidation on this scale happens, how would it impact M&A and startup investing by CPG giants? Unilever has been an aggressive investor and acquirer of venture-backed companies such as Dollar Shave Club for $1B. Kraft Heinz, on the other hand, was built on a strategy of combining large, legacy brands.
  3. How a private equity firm made 40% a year on investments such as gourmet jerky and vegan makeup
  4. The entire food chain is shaken up. In perhaps the highest profile acquisition of the summer, Amazon acquired Whole Foods. Are the grocery and the convenience store industries the next to be disrupted by Amazon?
    • The Whole Foods acquisition is bold, but makes a lot of sense strategically. Their focus on grocery has been increasing over the last few years. The deal sent shockwaves across both the online and brick-and-mortar industries. 7-Eleven and Couche-Tard will also have to future-proof their business, even more so in light of the rise of delivery startups and electric (and one day autonomous) vehicles. Amazon is pushing further into the grocery business with plans to open convenience stores with curbside delivery.
  5. June – Will the computer-based oven become our generation’s intelligent microwave+ or the next Juicero?

Photo by Joseph Gonzalez on Unsplash

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About Ludovic Dumas

Ludovic transforms innovative companies into world-class organizations. He is an investment professional at an investment firm representing the interests of one of the most successful families in Canadian business. Before joining the private equity world, Ludovic was an investment banker at CIBC and with ING Group’s investment banking team in Frankfurt, Germany. Mr. Dumas was also a management consultant with Deloitte where he worked on corporate strategy, restructuring, market analysis, due diligence, and economic development mandates. Specialties Mergers & acquisitions, capital raise, corporate strategy, entrepreneurship.
This entry was posted in 5-Bullet Friday, Food, Private Equity, Wellness and tagged , , , , , . Bookmark the permalink.

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