• Corporate Finance Transactions

BGL Consumer Insider: Food Distributors Hungry for Acquisitions

March 08 2019

Chicago – March 8, 2019 Evolving consumer preferences and rapid technological change are transforming the food supply chain, according to the Consumer Insider, an industry report released by Brown Gibbons Lang & Company (BGL). Food distributors are refining offerings to capture on-trend products and capitalize on changing market dynamics, accelerating acquisition-driven growth.

Changing demographics, rising disposable income, and the pursuit of healthy living are reshaping consumer demand for specialty, better-for-you, and sustainable food options. Purchasing behavior is favoring premiumization and authenticity over cost, and more consumers are spending on food outside the home. Technology and eCommerce are blurring traditional channels, fueling growth in new delivery methods. Food distributors are broadening portfolios in line with these consumer shifts, and recent acquisition activity is reflective of this strategy.

  • Corporate buyers are hungry, with marquee acquisitions by United Natural Foods (SuperValu, $2.9 billion, October 2018), US Foods (Services Group of America’s Food Group of Companies, $1.5 billion, July 2017), and SuperValu (Unified Grocers, $372 million, June 2017) setting the stage for continued consolidation. Serial acquirers such as Performance Food Group, US Foods, and Lipari Foods are aggressively seeking acquisitions to broaden specialty offerings, build private brand portfolios, gain access to independent restaurants and retailers, and expand geographic reach.
     
  • Private equity funds are equally active. Industry fragmentation is conducive to acquisitive growth, with sponsors looking to create consolidation platforms on a regional and national scale. Lipari Foods (H.I.G. Capital), Quirch Foods (Palladium Equity Partners), Fresh Direct Produce (Hammond, Kennedy, Whitney & Company), Good Source Solutions (Highview Capital), and Ferraro Foods (Kainos Capital) are among the targets to attract private equity investment over the last twelve months.

About Brown Gibbons Lang & Company

Brown Gibbons Lang & Company is a leading independent investment bank serving the middle market. BGL specializes in mergers and acquisitions advisory services, debt and equity placements, financial restructuring advice, and valuations and fairness opinions, with global industry teams in Consumer, Diversified Industrials, Environmental & Industrial Services, Healthcare & Life Sciences, Metals & Metals Processing, and Real Estate. BGL has offices in Atlanta, Chicago, Cleveland, Denver, Philadelphia, San Antonio, and San Diego, in addition to international offices in more than 50 countries across 5 continents through our Global M&A Partners network. BGL is able to deliver to our clients unparalleled access to strategic relationships, investors, and opportunities globally. For more information, please visit www.bglco.com.

Other content

Related pages: Consumer, Daniel J. Gomez

← Back to Research