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Alongside the growing pressure on the leading multinational corporations to adopt ethical codes of practice, there exists a rising consumer demand for sustainable products. Unable to easily develop this organically, major food and drink manufacturers must look to acquire successful sustainable brands in order to gain a stake in this sector. This report analyzes current M&A trends in this industry.
M&A Activity in Sustainable Food and Drinks Brands Introduction Alongside the growing pressure on the leading multinational corporations to adopt ethical codes of practice, there exists a rising consumer demand for sustainable products. Unable to easily develop this organically, major food and drink manufacturers must look to acquire successful sustainable brands in order to gain a stake 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 and drinks brands sector. • Learn what makes an attractive target for leading food and drinks manufacturers and what features offer the best promise of continued success. • Understand how a sustainable brand can continue to be successful after being acquired by a large-scale manufacturer. • Study key examples of industry consolidation in this sector over the past three years. Highlights Sustainable brands attempt to differentiate themselves using their ethical credibility. However, there are limits to the growth of sustainable brands because of restrictions associated with their scale and distribution network. Although deals with larger partners threaten their degree of independence, investment is required for growth. Illustrating the emerging nature of this sector, deals involving sustainable brands make up a small fraction of the total M&A activity involving food and drinks companies. During 2009-2010 Coca-Cola made acquisitions worth an estimated $15 billion in the food and drinks sector worldwide. The sustainable brands sector will continue to grow, both in the developed economies where it is already strong, but also in the developing economies. As incomes rise in fast-growing economies like India and China a cohort of sustainable and ethical consumers will establish themselves as a key target for both local and multinational manufacturers. Browse All Food and Beverages Market Research Reports Your key questions answered • What are 'sustainable brands' and what has been their impact upon the consumer products industry over the past few years? • Which companies has a history of acquiring sustainable brands and is there any apparent strategic direction in the pattern of acquisitions? • How can companies learn from the evolution of the sustainability trend and previous M&A activity in this sector? • Are certain regions more synonomous with this M&A activity than others and what factors are influencing this • What has been the impact of the global financial crisis on M&A activity in the sustainable brands sector? Table Of Contents Executive Summary Introduction Market dynamics Pre- & post-merger strategies Case studies Future outlook About the author Disclaimer Introduction Summary Introduction Scope Definitions Explanation of terms Growth of sustainable brands Global connectedness Consumer awareness Sustainable entrepreneurs Sustainability as a marketing tool Features of sustainable brands Consumers feel a connection to the brand Sustainable credentials are fundamentally linked to brand values Sustainable brands are premium brands - at the moment People Sustainable companies are generally small companies Sustainable brands – easier to buy than build Strategic issues Consumer mistrust Barriers to developing an authentic brand narrative Intangible assets Merger and acquisition activity 2008–2010 Small value transactions are the norm US companies dominate Types of acquirer Large-scale manufacturers Small- or medium-sized manufacturers Private equity Market dynamics Summary Introduction Geographical breakdown of acquiring companies North America and Europe lead M&A activity The US dominates the market, with the UK a distant second Geographical breakdown of target companies North American and European companies are the most popular targets US companies again at the forefront Deal values Reported deal values and the average deal size are falling Significant transactions Types of transactions Pre and post merger strategies Summary Introduction Drivers for acquirers Emerging niches – filling gaps in product portfolio Achieving scale Buying innovation and an entrepreneurial approach Buying expertise and enthusiasm Access to a sustainable supply chain and contacts The halo effect Part of a wider sustainability strategy Drivers for targets Growth strategy – diversification of markets Improving distribution networks Capital backing for growth Marketing muscle What makes an attractive target? Scalable opportunities A product that fits the mainstream A history of strong growth A defensible position Ethical credentials Post merger An open relationship between the two companies Keeping key people incentivized post-acquisition Front-footing criticism Predicting the future Acquisition case studies Summary Introduction The Coca-Cola Company Acquisition of Honest Tea, 2008 and 2011 Acquisition of a stake in Innocent Drinks, 2009 and 2010 The Hain Celestial Group Acquisitions history Private equity Acquisition of Plum Baby by Darwin Private Equity Investment in O.N.E. Natural Experience by PepsiCo and Catterton Partners Future outlook Summary Introduction A global focus on sustainability Limited resources Development of the middle class The future of sustainable brands Market growth will continue Proliferation of brands in the short-term, fewer in the long-term Sustainable claims will need to become more specific Future trends in M&A Innovative approaches to mergers and integration of acquisitions More consolidation of brands Creation of ever-larger conglomerates of sustainable brands Private equity will remain a significant player Growth outside Europe and the US Appendix Scope Methodology Secondary research Bibliography/References About Us: ReportsnReports is an online library of over 100,000+ market research reports and in-depth market research studies & analysis of over 5000 micro markets. We provide 24/7 online and offline support to our customers. Get in touch with us for your needs of market research reports. 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