Food & Beverage M&A Review – Summer 2025

The UK food and beverage (F&B) market has seen a return of momentum in 2025, confirmed by a busy and positive Q2 for M&A in the sector. Strategic consolidation, private equity interest and the realisation of improved margins have overridden some of the uncertainty investors have had about the impact of tariffs on businesses in the UK.

We’re now seeing lots of interest from investors – both those with platform investments already looking for ‘bolt-ons’, and investors that are entering the F&B space for the first time. Volumes have gone up again since Q1 and we’ve returned with a lot of positive momentum to an average level again – albeit with certain sectors and certain investors responsible for more activity than others.

Quarterly Announced M&A activity in food and beverage

Source: The data is an amalgamation of BvD Zephyr, Mergermarket and industry intel and the categorisations are our own.

Private equity – a growing appetite for F&B

We’ve seen an increasing number of PE-backed deals in 2025 – there are a few factors that might be driving this interest. 

The food sector is effectively ‘fragmented’, both as a result of a hangover from when food production was historically more localised and also the continuous introduction of new and disrupting products and brands as consumer tastes change over time. This has resulted in both opportunity and incentive for investors to consolidate within the sector. The more you consolidate, the more economies of scale, higher margins and wider audience you can reach. 

There has been instability in the food sector in the UK, and therefore a lot of volatility in raw material pricing over the last few years. By making acquisitions in the supply chain, companies have been able to better secure margins. 

One of the areas that we’ve seen examples of this quarter is with egg producers. The global egg market has been disrupted by avian influenza, rising chicken feed costs, and incoming legislation from the European parliament – in Q2 this year Eurovo Group acquired a liquid egg white business and a number of other related businesses in Europe.

Equally, there are a lot of strong exit strategies playing out across the sector that are likely to catch the eye of PE firms. 3i recently sold MPM to Partners Group – and reportedly made a 3.2x money multiple. Huge returns like this give PE investors confidence to enter and expand investment in the sector – especially as the MPM deal was briefly on hold during the introduction of US tariffs earlier this year, but when this settled down, confidence returned and the deal completed.

F&B M&A PE Activity

Source: The data is an amalgamation of BvD Zephyr, Mergermarket and industry intel and the categorisations are our own

Alcohol and pets as standout sectors

Certain sectors within F&B have demonstrated continued growth and resilience - the alcohol and pet sectors being key examples.

While the overall receipts from alcohol duty have remained fairly stagnant for the last three years in the UK, there are pockets of growth around innovative businesses and new products. 25% of Q2 2025 deals in the UK were within the alcoholic drinks sector – the largest proportion – although many of these deals were smaller than the average, i.e. minority investments.

Spirits made up the majority of these deals and is an area of continued growth. Rutland Square, Nio Spirits and Soho St Cocktails all offer ready-to-drink, pre-mixed cocktails and all three were acquired or sold significant stakes to investors in Q2.

Pet food also saw a number of deals and is a sector continuing to experience significant, long-term tailwinds. Pet ownership and an increase in the quality of the pet food that owners are willing to buy, are both rising trends, giving the sector a resilience to macroeconomic effects like the COVID-19 pandemic. Other than the MPM deal mentioned above, there have been several acquisitions this quarter – such as cat food producer Untamed seeing continued investment from Redrice and Five Seasons Ventures – an F&B growth specialist.

Total

Ingredients for growth in 2025

There is positive momentum in the market, and M&A activity has rallied back to strong levels – with some landmark deals in the sector, such as Greencore’s acquisition of Bakkavor. We consider this positive momentum will continue into Q3. The increased ratio of trade to PE deals in Q2 is likely to be the same in Q3/Q4, as this has now realigned with historical average levels.

We are cautiously positive this sentiment will continue as both private equity and trade continue to trade in a sector which has always proved to provide very solid returns.

For more insights and guidance, get in touch with Nicola Sartori.