By: Doug Bentley, Himanshu Batra
24 Aug 2026 8 min read
The first half of 2026 saw continued momentum in the UK food and beverage (F&B) sector, with 105 transactions. After a bumpy post-COVID period, deal activity has climbed steadily back towards pre-pandemic levels. The mood has shifted from wait-and-see to action.
Source: Mergermarket, Zephyr, and news articles
Defensive strategy was an overriding theme of H1 dealmaking. Margin pressure across the sector, from ingredient and energy costs to consumer resistance, is pushing some F&B businesses towards consolidation to protect their position. There is also a need to build vertical capability in R&D and innovation, so companies can react more quickly to global supply shocks.
Another part of the story is a narrowing bid-ask gap. Buyers and sellers are finally converging on what businesses are worth. A reduction in the cost of debt has helped too, with average pricing – margin as well as base rate – also coming down over the period; a falling bank rate has made it easier to finance deals that would have felt like a stretch twelve months ago. This reflects competitive borrower-friendly dynamics across the market.
By deal volume, alcoholic drinks led H1 activity due to a large number of smaller deals. This was followed by ingredients, wholesale and distribution, and meat, fish and poultry, with functional, bakery and pet food close behind.
But raw deal counts only tell part of the story. Four categories – ingredients, functional health and wellness, bakery and pet food – account for the most structurally significant dealmaking this half: buy-and-build platforms, capability acquisitions and category consolidation that are reshaping how the sector operates.
Danone’s acquisition of meal-replacement company Huel, announced in March, demonstrates the pull of the health, wellness and nutrition brands, which remained a key focus area for investors throughout H1. It reflects how the sector is reacting to demand for healthy, convenient food across all categories. Protein has become the industry's watchword, folded into everything from yoghurt to cereal. Meanwhile, the rise of GLP-1 weight-loss drugs is forcing retailers to rethink portion sizes and the makeup of the snacking aisle.
Buyers in this space have recognised social media’s sway in wellness categories. The messaging around Lactalis's acquisition of Protein Works in June sold the community and lifestyle brand behind it as much as the supplements business itself. Category disruptors are attracting increasing investor interest as consumers continue to gravitate towards healthier and more functional beverage options. PerfectTed has emerged as one of the standout brands in the fast-growing matcha segment, while Reformed recently secured Series A funding, another sign of confidence in health-focused beverage brands.
Food ingredient assets have become a capability play, as companies buy their way into supply chain durability, R&D strength and vertical integration, a response to years of raw material volatility that has left buyers unwilling to leave production to chance.
In H1 there were a series of buy and build platform deals:
The ongoing takeover of Tate & Lyle by US-listed Ingredion (NYSE: INGR) was also announced in June, which continues a broader trend in takeovers with strategic buyers.
A smaller but notable theme is larger groups using M&A to add scale (and hoped for profitability) to loss-making assets. ABF's move to acquire Hovis is the standout example.
The UK Competition and Markets Authority cleared this deal using the DMCCA fast-track Phase 2 procedure, its statement acknowledged that bread suppliers in the UK have faced longstanding challenges, including declining demand and significant increases in costs.
Separately, Finsbury Food has also been active, acquiring bakery retailer Lola’s Cupcakes, a cake making entry into the direct-to-consumer market, and functional bar business Flower White to add a health-led product to its portfolio.
Pet food has been one of the most consistently active subsectors since the pandemic. H1 deal flow was split between fresh venture capital chasing next-generation categories like cultivated protein, and established platforms bolting on smaller specialist brands to round out their portfolios.
May 2026: Assisi Pet Care Limited acquired Sniffers Pet Care Limited, owner of natural dog treat brand NAW, we guided Assisi Pet Care Limited through this process.
January 2026: Kagome Co. Ltd acquired Silbury Marketing Limited, an Oxfordshire based ingredients supplier, to build a European hub for its tomato and oil products business. We acted as financial advisers on the transaction
December 2025: French poultry group Lambert Dodard Chancereul (LDC) acquired a majority stake in the parent company of Gressingham Foods from the founding family. We worked with Gressingham on financial and tax vendor due diligence, and SPA advisory.
November 2025: Spanish food group Idilia Foods acquired premium milkshake brand Shaken Udder from founders and private equity backer Lloyds Development Capital (LDC), with Grant Thornton advising Shaken Udder on its sale.
Source: Mergermarket, Zephyr, and news articles
Cross-border interest has picked up noticeably this half, flowing both ways. Overseas buyers, from US private equity to the Swedish nutrition group behind the Yorkshire Raw Feeds deal, see the UK as a market with room to grow.
Terold Invest SL’s acquisition of Cheltenham-based wholesaler Off-Piste Wines, follows this logic with the deal giving the Spanish wine investor access to a UK customer distribution network. Meanwhile UK brands are attracting interest partly because their growth story translates easily into Europe or the US.
Public markets saw AIM-listed Various Eateries plc acquire a portfolio of premium pubs from Grosvenor Pubs, against a backdrop of regulatory easing. The London Stock Exchange's amended AIM Rules, in force from early August, relax the requirements around acquisitions, while the FCA's new prospectus rules from the start of the year add further flexibility for AIM companies to pursue growth.
AI capability has become a notable consideration when valuing assets. Operators are using it for everything from marketing strategy to more operational tasks like managing seasonality, shelf life, allergen tracking and compliance. The technology is shifting from a nice-to-have into something closer to core infrastructure, and businesses that haven't started adopting it risk falling behind.
The consensus among dealmakers is that this momentum has further to run. There's a healthy pipeline of live deals sitting with advisers right now, clustering into the same four buckets: health and wellness, pet food, food ingredients and bakery. Barring any shocks from the political or fiscal calendar, activity looks set to continue across domestic trade, cross-border trade and private equity investors for the foreseeable future.
If you're weighing a sale, an acquisition or new investment in the sector, talk to Doug Bentley, Himanshu Batra or your usual Grant Thornton contact.
The fast-food industry has always demonstrated resilience, but pressures on profitability are growing.
UK food and beverage (F&B) M&A activity remained resilient through the third quarter of 2025, even as volumes softened slightly from the highs of Q2. A total of 49 transactions were completed during the period, representing a modest 6% decline quarter-on-quarter but still comfortably above the trailing average of 45 deals and ahead of levels seen in Q4 2024 and Q1 2025.
Overcoming the common missteps for a successful SAR engagement, that delivers real value to both service providers and their customers.
