Food & Beverage M&A Year-in-Review — 2022
UPSIDE Foods’ cultivated chicken receives FDA approval. (Photo: UPSIDE Foods)
Tamarack Partners released its 2022 Food & Beverage M&A Year-in-Review in collaboration with The Food Connector. Deal activity in 2022 was subdued relative to the prior year due to significantly higher than normal M&A levels in 2021 following the pandemic slowdown. Moreover, companies scaled back their investment appetites as they navigated inflation, rising interest rates and global conflict. Despite this, transaction volumes surpassed pre-pandemic levels as market participants continued putting their robust amounts of capital to work through M&A.
A number of post-pandemic shifts have added flexibility to the food value chain in the face of continued high labor costs and operational disruptions. A striking example has been the growth of contract manufacturing. Contract manufacturing, or co-manufacturing, refers to the outsourced production of food and beverage items for brands and retailers, as well as packaging, custom formulation or research and development. During the pandemic, co-manufacturing enabled food businesses to keep up with the rising demand for groceries, while giving them more time to focus on branding and marketing.
In 2022, emerging foodtech companies and products experienced an influx of investments. In November, UPSIDE Foods was the first company to receive a “No Questions Asked” letter from the FDA, indicating that its cultivated chicken is safe to eat. This milestone marks a major step towards a new era in meat production. By 2030, plant-based alternatives are expected to grow from low single digits today to 10-15% for meat and 10-20% for dairy. In the mean time, controlled environment agriculture has attracted attention from private equity, pension funds and retailers.
Also included in this report:
M&A commentary by sector and acquirer group
Insight from industry partner Barry Friends
Spotlight on notable deals
Listed transactions
Tamarack Partners provides M&A advisory services to owners of lower middle market companies. For more information on this report or to speak with one of our transactional advisors about your business, Contact Us.
