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Press Release

Deal activity in food and beverage sector rebounded in 2023

New research from leading business and financial adviser Grant Thornton UK LLP finds that deal activity in the food and beverage sector rebounded last year compared to 2022, when dealmaking was put on pause, in part, due to the emerging cost of living crisis. 

The research finds that there was an uptick in M&A activity across the sector last year, with 164 deals recorded. While this is a significant increase (41%) compared to 2022, it is still far below levels seen before the pandemic. The first three quarters of the year were particularly active, before slowing slightly in Q4 2023.  

The last quarter of the year recorded 37 deals, a drop compared to a high in Q3 of 48. Notable deals in Q4 2023 included: 

  • AG Barr’s purchase of Rio Tropical for £12.3million 
  • Mars purchase of Hotel Chocolat Group for £534 million 
  • Premier Foods purchase of FUEL10K for £34 million  

Private equity (PE) appetite for food and beverage deals was on the rise last year, with deal volumes involving PE up 58% compared to 2022, and accounting for 37% of all deals throughout the year. The majority of these (57%) were minority stakes or VC funded, suggesting a cautious confidence in the consumer facing sector.  

The analysis finds that cross border activity in the sector last year was relatively muted. The majority (80%) of 2023 deal activity was domestic, which is a slight increase compared to the previous year at 75%. This ratio was particularly prevalent in Q4 which saw domestic deals account for 73% of activity, a significant jump from 58% in Q3.  

The most active sub-sector in Q4 2023 was functional foods, accounting for 13% of all deal activity. This was followed by spirits (10%), beers and ales (8%) and plant-based (8%), which has been a dominant sub sector in previous years 

Nicola Sartori, Head of UK Retail and Consumer M&A, Grant Thornton UK LLP, said:  

The economic environment of the past couple of years, where inflation has been at double-digits and interest rates have been on the rise, has been a very challenging time to deploy capital and UK food and drink assets will not have been high on investors’ wish lists 


However, there has been more stability over the past 9 months and with the Bank of England holding interest rates steady since August, it feels that the brakes are finally coming off those factors that have inhibited investment in the sector. This is reflected in the rebound of deal activity that we’ve seen across food and beverage last year, with private equity activity starting to return more steadily 


Grocery inflation is also falling - although shipping delays in the Red Sea area may impact this – and, compared to 2023, consumers are arguably starting to show small signs of confidence. Recent supermarket trading updates painted a positive picture of activity over the Christmas trading period. If this carries on, M&A activity will likely continue to return through 2024. 

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