Capstone Companions, A quantity one center market funding banking agency, recently launched its September 2021 Meals & Agriculture Inputs Enterprise Replace.
Based mostly on the report, food prices have drastically enhanced over the previous yr, pushed by current chain disruptions, extreme feed prices and strong demand.
Final yr challenged the food and agriculture industry with labor shortages, current chain disruptions and restricted processing performance, finally contributing to gross sales falling by roughly 27%. The restoration Of these losses has been fueled by The greater commodity pricing environment So far in 2021, the report explains.
The Meals and Agriculture Group’s Meals Price Index in July conagencyed a 31% enhance in food commodity prices over 2020. “Higher enter prices typically revenue upstream industry gamers with food producers passing on elevated prices to consumers,” notes the report.
The U.S. Dehalfment of Agriculture Financial Evaluation Service additionally reviews People are spfinishing extra on food. Based mostly on the Meals Price Outlook for 2021, The client worth index for grocery retailer and Food market food purchases was 3% greater in August of 2021 As in contrast with August of 2020. Equally, restaurant purchases enhanced by 4.7% By way of the identical interval.
Meals labeling and sustainability
Consumers have positioned greater significance on well being and wellness As a Outcome of of COVID-19, which has heightened demand for clear labeling and useful food components, the report explains.
Prime food and agriculture industry gamers are revenueing from these shopper choice modifications. For event, Archer-Daniels-Midland has grown its income in its vitamin half by 15% in Q2 2021 over a yr prior, in accordance to The agency’s earnings launch.
The report additionally emphasizes how the sector has pushed to undertake extra environmentally frifinishly manufacturing strategies, pushed by finish-market demand. When buying for Meals and drinks, 49% of consumers now think about sustainability, in accordance to Kerry Group.
Also contributing to sustainability is the discount of food waste Contained in the food and agriculture enters sector. The USDA Financial Evaluation Service estimates 30-40 % of the U.S. food current is misplaced to food waste.
Enterprise gamers are turning to food preservation utilized sciences and processes To reinforce shelf life and drive value financial savings as they purpose To Scale again food waste.
“The extremely effective macro trfinishs of sustainability, traceability, and clear useful components Are actually gaining momentum On this environment. We anticipate these trfinishs, coupled with The huge liquidity in each Private and Public markets, to be on the forefront of M&A exercise going forward,” says Capstone Managing Director Brian Boyle.
Mergers and acquisitions
The Meals & Agriculture Inputs report states 29 transactions have been introduced or fulld So far in 2021, which is a 26% enhance yr-over-yr. Private strategic consumers are main Almost all Of these provides.
Notable transactions in 2021:
- Brenntag, A quantity one worldwide chemical compounds and components distributor, has acquired JM Swank for $304 million.
- Clearlake Capital Group has agreed To accumulate BakeMark, A quantity one producer and distributor of baking components, for an undisclosed quantity.
- Welcome Dairy Holdings has acquired North Star Processing for an undisclosed quantity, permitting Welcome Dairy To current The complete spectrum of dairy components.
- Kerry Group agreed To accumulate Niacet, A worldwide chief in preservation utilized sciences, for $1 billion.
- Tilia Holdings has agreed To accumulate majority stake in NutriScience improvements, a supplier of vitaminal components.
Study the full report from Capstone Companions.