Food and beverage companies are capitalizing on today’s selective consumer, with the need to innovate driving investment strategy, according to the Consumer & Retail Insider, an industry report released by Brown Gibbons Lang & Company (BGL).  Differentiated brands catering to better-for-you and other specialty food segments are in high demand, with the pace of acquisitions accelerating across all sectors.

The familiar adage “you are what you eat” is gaining steam as wholesome, better-for-you and specialty food products attract investors. Nestle (Sweet Earth Natural Foods), Campbell Soup Company (Pacific Foods of Oregon), Kellogg (RXBAR), and Dean Foods (Uncle Matt’s Organic) each announced recent acquisitions in the space. They also make up a growing number of large companies that are backing disruptive brands —many promising start-ups— to get a foothold in emerging markets while keeping a pulse on evolving consumer trends. Campbell’s venture arm, Acre Venture Partners, has invested in more than ten start-ups during the last two years, including Back to the Roots and The Safe + Fair Food Company. Other notable recent deals in the better-for-you space include Back to Nature Foods, acquired by B&G Foods, and Inventure Foods, which agreed to merge with Utz Quality Foods.

Companies are also taking steps to reshape their portfolios by shedding stagnant brands and expanding into adjacent specialty food categories to accelerate growth. Conagra Brands has stated plans to overhaul its branded business to improve competitiveness. Recent acquisitions of Angie’s Artisan Treats, maker of better-for-you popcorn brand Boomchickapop, and Thanasi Foods, which owns premium snack brands Duke’s and BIGS, are illustrative of these trends.

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