Food and Beverage M&A Industry Insights - Summer 2023

The food and beverage space saw 89 deals completed in Q2 2023, which is the highest transaction count in the space since Q3 2021. For the trailing twelve months (TTM) ending June 30, 2023, 295 deals were announced in the space, 53 fewer transactions compared to the prior TTM period. Overall, deal activity decreased year over year by 15%; however, in comparison to the 62 transactions in the previous quarter, deal volume increased quarter over quarter by 44%. M&A activity in the food and beverage sector in TTM June 2023 remains predominantly driven by strategic buyers (including companies primarily owned by private equity investors), with strategic transactions representing 78% of total deal volume.

In Q2 2023, deal activity within the food and beverage industry increased sharply with transaction volumes in line with levels experienced during the COVID-19 pandemic. As interest rate hikes continue to decelerate and inflation levels drop, investors are becoming less cautious and are looking to invest their capital, despite debt being more expensive and less readily available compared to a year ago. Although deal flow experienced a quick ramp up in Q2 2023, increases in input costs remain top of mind for businesses within the food and beverage industry as consumers are beginning to push back against price increases and global conflicts continue to impact the supply of raw materials. However, the balance sheets of large conglomerates and private equity firms remain flush with cash, and we expect that their demand for high-quality assets within the food and beverage industry will remain strong throughout the second half of 2023.