Two sizable deals demonstrated private equity's (PE) willingness to back the right asset: Apax's acquisition of Bazooka Candy Brands, and L Catterton's investment in dog food company, Butternut Box.

There were 16 PE deals this quarter, an 11% drop on Q2 2023. Of these, 56% were minority investments, demonstrating that F&B is an active market for growth investors and specialised incubators.

Deal volumes

Announced M&A activity in food and beverage - quarterly

Graph depicting Announced M&A activity in food and beverage - Q3 2023

There were 46 deals, up 9.5% on the previous quarter and an incredible 142% on Q3 2022. This was the highest number of deals since Q1 2021.

In further positive news, the proportion of deals involving troubled companies fell to 4% in Q3 2023 from 9% in Q2 2023.

Deal values

The combined total of publicly disclosed deal values was £1.3 billion, bolstered significantly by two large private equity deals.

A sweet deal

In October 2023, Apax Partners completed its reported USD 700 million acquisition of US-based Bazooka Candy Brands, a portfolio of non-chocolate brands from Michael D. Eisner's Tornante Company and the PE-firm Madison Dearborn Partners.

The move shows that there's still appetite for large F&B sector investments if the fundamentals are right. Bazooka's US retail sales grew by 29% in the year to August 2023, significantly outpacing the overall confectionery category.

Apax will look to boost distribution growth, product innovation, geographic expansion, and the strategic acquisition of brands in complementary categories.

From luxury to Labradors

A private equity consortium, including (LVMH backed) L Catterton and General Atlantic, completed a £280 million fundraising in UK-based fresh dog food company, Butternut Box.

Butternut Box delivers portioned, fresh, 'home-cooked' dog food tailored to a dog's age and size.

Butternut Box plans to use this funding to accelerate the company's position in the fresh pet food space through further European expansion, including the development of a new European manufacturing facility.

Private equity

Of the 46 deals, 35% (16) involved private equity, a decline from 43% in Q2 2023, but a significant 433% increase on the same quarter last year.

Focus on global food supply

IN Q3, two private equity deals focused on innovative and sustainable solutions to global food supply challenges.

New microprotein on the market

In August, Scottish food tech startup ENOUGH (formerly 3F BIO) raised EUR 40 million in Series C funding from World Fund, CPT Capital and a consortium of existing investors, including Axa Impact Fund.

ENOUGH produces ABUNDA®, a fermented mycoprotein that can be used to make plant-based meat, fish, and dairy alternatives.

Sustainable year-round production

In July 2023, UK-based Cibus Capital, an investment fund focused on sustainable food and agriculture, acquired Duijvestijn Tomaten BV, a European producer and marketer of tomatoes grown in high-tech Dutch glasshouses powered by green energy infrastructure.

This marked the launch of The Flavour Farm, a Cibus-owned European platform that aims to acquire and develop facilities across the UK and Europe, increasing self-sufficiency with the year-round supply of fresh produce.

International activity

In Q3, 61% of deals were domestic, 17% involved foreign investment in the UK and Ireland, and 22% involved UK or Irish companies buying overseas.

This made the Q3 domestic/cross-border deal ratio 61:39, compared to 67:33 in Q2.


There were eight administrations this quarter, compared to seven in Q2 2023. A further three companies (two bakeries and one brewery) were acquired from administration.

Subsector activity – plant-based drops out of top six

Diagram showing plant-based drops out of top six subsectors

Deal activity was fragmented across different subsectors in Q3. Spirits remained the most active M&A subsector for the second quarter in a row, while deals involving wholesale and veg entered the top three.

Spirits still a good investment 

Spirits remains an active M&A subsector, as large brands circumvent development costs by adding innovative products to their portfolios.

In September 2023, Glenfiddich owner William Grant & Sons Ltd acquired 'superpremium' English gin brand, Silent Pool (Spiritmen Ltd). William Grant will act as Silent Pool's global supply chain and distribution partner to expand the brand in Europe, North America, and Asia Pacific.

Vegetable deals – healthier eating/convenience

In August 2023, Cork-based retail group, Musgrave acquired Doyle's Veg, a prepared vegetable supplier, marking the group's fifth acquisition in eighteen months.

In July 2023, The Fresca Group added Birmingham-based fruit and veg wholesaler EA Cook to its M&W Mack wholesale division.

THIS pursues innovative Media Equity model

Plant-based dropped out of the top six for the first time in a year, but a notable transaction in this subsector, is ITV AdVenture Invest's 'media for equity' deal with meat substitute company THIS, its first foray into food and drink. It will be interesting to see if F&B players will follow suit.

Launched in 2021, ITV AdVentures Invest is a Media for Equity programme in which ITV takes minority stakes in early-stage digital and direct-to-consumer businesses, alongside venture capital investment, in return for advertising inventory across ITV's channels and ITVX.

Outlook for food and beverage M&A

Inflation and consumer confidence

Annual grocery inflation was 11% in the four weeks to October 1 2023, according to Kantar, the lowest rate for 15 months. On October 11, Marks & Spencer and Asda announced further price cuts on 200 and 232 lines, respectively, which is positive news for the consumer.

Is now the right time to sell or buy?

As Q3 activity shows, it's always the right time to transact if a deal is underpinned by solid strategic reasoning. The continued uptick in deal volumes is a positive step towards previous activity levels in the sector, aided by softening inflation.

Buyers have increased diligence requirements to determine how macroeconomic volatility has impacted sales and earnings (even more so with commentators questioning whether the UK will drop into recession).

For companies looking to sell, Q4 is pivotal to proving performance amid Christmas spending. There is a hope that positive news from the sector will result in a return to mid-market deals in early 2024.

For more insight and guidance, get in touch with Nicola Sartori or Tor Johnson.

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