Blog Author

Michael Poole

E: mpoole@pcecompanies.com

Follow me: LinkedIn

Industry Trends

Consumer Demand for Premium Specialty Foods Drives Acquisition of OWYN

The Simply Good Foods Company (NASDAQ:SMPL) has acquired Only What You Need (OWYN), the fastest-growing ready-to-drink protein shake brand, for $280 million. SMPL’s research and development capabilities and OWYN’s reputation for having premium, clean ingredients with zero additives will allow the combined firms to dominate the ready-to-drink protein market, which is growing at a CAGR of 7.72%.1 2

Glanbia’s Nutritional Solutions Business Expands into the United States

Flavor Producers, a producer of natural, organic flavoring and extracts, has agreed to be acquired by Glanbia Nutritionals for $300 million with $55 million in deferred considerations with a close in the first half of 2024. Glanbia’s Nutritional Solutions segment provides nutritional and functional ingredients to food and beverage products. This acquisition will allow Glanbia to improve its product offering to fit better the current market trends towards organic and natural products.3

Farmers Receive $50 Million From The USDA

To help small to medium-sized farms stay competitive with large farms and address the labor shortages that have plagued the agriculture sector, the USDA has given grants of up to $1.7 million to 141 businesses across 40 states and Puerto Rico. This is one of many steps to establish regular migration pathways for temporary workers into America, improve labor standards in the farming sector, and address the increasing cost of the seasonal worker program.4

Rise in CPI for Food Expected to Decelerate in 2024

As interest rates remain unchanged, food prices are slowing their rapid ascend, as seen in 2023. Food purchased from grocery stores or supermarkets is projected to increase by 1.2% in 2024 compared to 5% in 2023. Food purchased in restaurants is predicted to increase by 4.2% in 2024 compared to 7.1% in 2023. While there is a clear improvement, much work still needs to be done in the battle with inflation.5

Private Labels Beat Out Name Brands

Grocery store brands gained popularity for their affordability, with 65% of shoppers choosing them over national brands for lower prices. Now, shoppers say they will continue purchasing them due to their increased quality. Retailers expect private-label goods to be their top growth driver this year, incentivizing them to continue expanding their product offerings through R&D and M&A. For example, Walmart is launching a premium food line with most items priced below $5.6 7

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Sonoma-Cutrer Vineyards, Inc.
  • The Duckhorn Portfolio, Inc.
  • $391.49
  • Flavor Producers, LLC
  • Glanbia plc
  • $355.00
  • Only What You Need, Inc.
  • The Simply Good Foods Company
  • $280.00
  • Institutional Wholesale Company, Inc.
  • US Foods Holding Corp.
  • $220.00
  • Pruvit Ventures, Inc.
  • Adventures Capital
  • $107.00
  • The Bargain Barn, Inc.
  • Grocery Outlet Inc.
  • $62.00
  • People's First Choice, LLC
  • Haven Nectar LLC
  • $24.80
  • Burklund Distributors, Inc.
  • AMCON Distributing Company
  • $19.60
  • Manufacturing facilities and Assets of Utz Brands, Inc.
  • Our Home
  • $18.50
  • Two medical dispensaries of Pennsylvania from Keystone Integrated Care, LLC
  • Cresco Labs Inc.
  • $9.80

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • All of the operating assets of Oberweis Dairy, Inc.
  • Osprey Capital, LLC
  • n/a
  • Xochitl, Inc.
  • Forward Consumer Partners, LLC
  • n/a
  • Chalet Desserts Inc.
  • Encore Consumer Capital, LP
  • n/a
  • Prime Meats, LLC
  • Shoreline Equity Partners, LLC
  • n/a
  • Cheeze Kurls, LLC
  • Nexus Capital Management LP
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • That's How We Roll LLC
  • J&J Snack Foods Corp.
  • $7.70
  • Substantially all of the assets related to the operations of retail cannabis dispensary of Deep Root
  • Silver State Relief LLC
  • $3.50
  • Allgreens Dispensary, LLC
  • MariMed Inc.
  • $3.25
  • Assets of Foxtrot
  • Further Point Enterprises LLC
  • $2.20
  • Surge Distribution Company, LLC
  • NuVibe, Inc.
  • $1.50

 

Source S&P Capital IQ as of 7/9/2024 and PCE Proprietary Data

PCE Transactions

Contacts

David Jasmund

Orlando Office

407-621-2111 |

Read More

Michael Poole

Orlando Office

407-621-2112 |

Read More

Will Stewart

Orlando Office

407-621-2124 |

Read More

Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. 1. Yahoo Finance. “Groundforce Capital Announces Acquisition of OWYN.” Yahoo Finance, 13 June, 2024.
  2. 2. Mordor Intelligence. “Ready-to-Drink Protein Beverages Market.” Mordor Intelligence.
  3. 3. Chris, C. “Glanbia Buys Flavor Producers for $300M, Merging Natural Ingredients, Flavor Capabilities in the U.S.” Food Dive, 18 April, 2024.
  4. 4. Zimmerman, S. “USDA to Provide $50M in Grants to Help Farms Hire Migrant Workers.” Agriculture Dive, 17 June, 2024.
  5. 5. Economic Research Service. “Summary Findings.” U.S. Department of Agriculture.
  6. 6. Newman, J. Stamm, S. “Store Brands Are Filling Up More of Your Shopping Cart.” The Wall Street Journal, 29 May, 2024.
  7. 7. Moran, C. “FMI: Private Label Is Set to Power Grocery Sales in 2024.” Grocery Dive, 17 June, 2024.
RELATED RESOURCE
RELATED RESOURCE

Keys to Selling Your Packaged Food & Beverage Company

Read now
contact usan image