M&A activity in sustainable food and drinks brands


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M&A activity in sustainable food and drinks brands

  1. 1. M&A Activity in Sustainable Food and Drinks BrandsIntroductionAlongside the growing pressure on the leading multinational corporations to adoptethical codes of practice, there exists a rising consumer demand for sustainableproducts. Unable to easily develop this organically, major food and drinkmanufacturers must look to acquire successful sustainable brands in order to gain astake in this sector. This report analyzes current M&A trends in this industry.Features and benefits• Identify the driving forces behind the growth of sustainable brands.• Examine a regional analysis of global M&A activity in the sustainable food anddrinks brands sector.• Learn what makes an attractive target for leading food and drinks manufacturersand what features offer the best promise of continued success.• Understand how a sustainable brand can continue to be successful after beingacquired by a large-scale manufacturer.• Study key examples of industry consolidation in this sector over the past threeyears.HighlightsSustainable brands attempt to differentiate themselves using their ethicalcredibility. However, there are limits to the growth of sustainable brands because ofrestrictions associated with their scale and distribution network. Although deals withlarger partners threaten their degree of independence, investment is required forgrowth.Illustrating the emerging nature of this sector, deals involving sustainable brandsmake up a small fraction of the total M&A activity involving food and drinkscompanies. During 2009-2010 Coca-Cola made acquisitions worth an estimated $15billion in the food and drinks sector worldwide.The sustainable brands sector will continue to grow, both in the developedeconomies where it is already strong, but also in the developing economies. Asincomes rise in fast-growing economies like India and China a cohort of sustainableand ethical consumers will establish themselves as a key target for both local andmultinational manufacturers.Browse All Food and Beverages Market Research ReportsYour key questions answered
  2. 2. • What are sustainable brands and what has been their impact upon the consumerproducts industry over the past few years?• Which companies has a history of acquiring sustainable brands and is there anyapparent strategic direction in the pattern of acquisitions?• How can companies learn from the evolution of the sustainability trend andprevious M&A activity in this sector?• Are certain regions more synonomous with this M&A activity than others and whatfactors are influencing this• What has been the impact of the global financial crisis on M&A activity in thesustainable brands sector?Table Of ContentsExecutive SummaryIntroductionMarket dynamicsPre- & post-merger strategiesCase studiesFuture outlookAbout the authorDisclaimerIntroductionSummaryIntroductionScopeDefinitionsExplanation of termsGrowth of sustainable brandsGlobal connectednessConsumer awarenessSustainable entrepreneursSustainability as a marketing toolFeatures of sustainable brandsConsumers feel a connection to the brandSustainable credentials are fundamentally linked to brand valuesSustainable brands are premium brands - at the momentPeopleSustainable companies are generally small companiesSustainable brands – easier to buy than buildStrategic issuesConsumer mistrustBarriers to developing an authentic brand narrativeIntangible assetsMerger and acquisition activity 2008–2010Small value transactions are the normUS companies dominateTypes of acquirer
  3. 3. Large-scale manufacturersSmall- or medium-sized manufacturersPrivate equityMarket dynamicsSummaryIntroductionGeographical breakdown of acquiring companiesNorth America and Europe lead M&A activityThe US dominates the market, with the UK a distant secondGeographical breakdown of target companiesNorth American and European companies are the most popular targetsUS companies again at the forefrontDeal valuesReported deal values and the average deal size are fallingSignificant transactionsTypes of transactionsPre and post merger strategiesSummaryIntroductionDrivers for acquirersEmerging niches – filling gaps in product portfolioAchieving scaleBuying innovation and an entrepreneurial approachBuying expertise and enthusiasmAccess to a sustainable supply chain and contactsThe halo effectPart of a wider sustainability strategyDrivers for targetsGrowth strategy – diversification of marketsImproving distribution networksCapital backing for growthMarketing muscleWhat makes an attractive target?Scalable opportunitiesA product that fits the mainstreamA history of strong growthA defensible positionEthical credentialsPost mergerAn open relationship between the two companiesKeeping key people incentivized post-acquisitionFront-footing criticismPredicting the futureAcquisition case studiesSummaryIntroductionThe Coca-Cola Company
  4. 4. Acquisition of Honest Tea, 2008 and 2011Acquisition of a stake in Innocent Drinks, 2009 and 2010The Hain Celestial GroupAcquisitions historyPrivate equityAcquisition of Plum Baby by Darwin Private EquityInvestment in O.N.E. Natural Experience by PepsiCo and Catterton PartnersFuture outlookSummaryIntroductionA global focus on sustainabilityLimited resourcesDevelopment of the middle classThe future of sustainable brandsMarket growth will continueProliferation of brands in the short-term, fewer in the long-termSustainable claims will need to become more specificFuture trends in M&AInnovative approaches to mergers and integration of acquisitionsMore consolidation of brandsCreation of ever-larger conglomerates of sustainable brandsPrivate equity will remain a significant playerGrowth outside Europe and the USAppendixScopeMethodologySecondary researchBibliography/ReferencesAbout Us:ReportsnReports is an online library of over 100,000+ market research reports andin-depth market research studies & analysis of over 5000 micro markets. Weprovide 24/7 online and offline support to our customers. Get in touch with us foryour needs of market research reports.Follow us on Twitter: http://twitter.com/marketsreportsOur Facebook Page:http://www.facebook.com/pages/ReportsnReports/191441427571689
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