Roshan Deshmukh
Koyel Ghosh
Food and Beverages Domain Outlook Q2 2024: Studying the Role of Merger, Acquisitions, and Technological Advancements in the Sector
In the past few decades, the growing demand for packaged and frozen foods has grown immensely owing to the busy lifestyles of people living in metropolitan cities and industrial towns. Furthermore, the increasing popularity of veganism and vegetarianism have led to the advent of plant-based products. Also, due to the COVID-19 pandemic, awareness regarding the importance of healthy lifestyle and balanced diets has grown significantly. All these factors have transformed the food and beverages sector and are anticipated to play a huge role in the evolution of this domain in the coming period.
Along with these factors, the competitive scenario of the sector has also contributed to its expansion, especially in the second quarter of 2024. Many companies in this domain have signed agreements regarding mergers, acquisitions, and partnerships with other businesses to increase their footprint globally. Furthermore, the technological advancements witnessed in the sector have also created favorable conditions for the growth of the food and beverages sector in Q2 2024.
Mergers and acquisitions generate new opportunities for growth in the domain
In the dynamic field of food and beverages, many multinational giants are competing for dominance in the domain. For this, many of these businesses have signed merger and acquisition agreements with other companies. For example, in May 2024, Commercial Bakeries Corp., a packaged cookies manufacturer based in Toronto, announced the acquisition of Imagine Baking Inc., a specialty bakery products manufacturer. This acquisition is expected to help Commercial Bakeries Corp. get access to the R&D laboratory, segregated manufacturing lines, and packaging facilities established by Imagine Baking Inc.
In May 2024, Suja Life, a cold-pressed juice company, released a press statement saying that it had signed an agreement to acquire Slice, a soda brand. In its press release, it also declared that Slice will be relaunched in 2025 with a new look and revamped formula. Suja Life has also claimed that the new formula would be all-natural and would contain clean ingredients to provide better nutrition and taste to its customers.
Again, in May 2024, Encore Consumer Capital, a private equity firm, acquired Chalet Desserts, a frozen baked goods processor based in California. Encore Consumer Capital released a statement saying that the company will infuse capital into Chalet Desserts to augment its production capabilities and expand its customer base globally. Also, the private equity company is expected to use its networking channels to help Chalet Desserts increase its footprint in the bakery products market.
Innovations and partnerships to positively impact on the rise of the food and beverages industry
Many new entrants in the food and beverages sector, to compete with the multinational giants, are signing partnership agreements with other businesses. Such collaborations help the companies to increase their foothold in the domain and take a competitive lead over their peers in the long run. In May 2024, Topgolf, a leading sports entertainment company, issued a press release in which it declared that the company had signed an 8-year partnership deal with PepsiCo. as the official beverage partner. As part of this partnership, PepsiCo will supply its top-selling beverages such as Pepsi®, Tropicana® Lemonade, LIFEWTR®, MTN DEW®, and Gatorade® to Topgolf’s venues spreading across the US.
In May 2024, The Coca-Cola Company, a major non-alcoholic RTD beverages company, released a press statement that highlighted its recent innovations and new offerings. The press release stated that the company was planning to launch a new line of drinks- Coca?Cola Spiced and Coca?Cola Spiced Zero Sugar- in North America in the coming period. Similarly, the company is also working on developing a formula for its advanced hydration drink called Flashlyte, which will be launched in Mexico in the near future. The company stated that it was investing in innovations to develop new ways of engaging with its customers and increasing its footprint in the industry.
In June 2024, Nestlé, a leading food processing company, announced the launch of the GLP-1 nutrition support platform which provides recommendations for people looking for weight loss solutions. The innovative platform, which is currently aimed at US consumers, focuses on offering expert advice to people wanting to change their dietary habits. The platform also highlights the nutrients and foods one should consume for muscle preservation, hydration, heart health, immunity, etc.
Understanding the role of product and service launches in bringing in new investment opportunities in the domain
In the second quarter of 2024, many key players of the sector have launched innovative products and services which have helped them manage to take a lead over their competitors. In April 2024, KIND Snacks, a leading snack food company, announced the expansion of its product portfolio by launching a new line of granola products. Made from 100% whole-grain oats, the Banana Peanut Butter Clusters are infused with dark chocolate chunks to offer a unique blend of nutrients and creamy flavor. The product is 100% gluten-free and contains a mixture of five super grains viz., buckwheat, quinoa, oats, amaranth, and millets.
In May 2024, Arla Foods, a Danish-Swedish dairy company, issued a press release stating that it had signed a licensing agreement with Mondel?z International, one of the world’s biggest snack companies. Under this agreement, both companies have agreed to manufacture, market, and distribute chocolate milk in Germany, Poland, and Austria under the brand name Milka. The company, in its press release, has claimed that the partnership will help both companies pool their resources and achieve their intended goal successfully in the coming period.
In June 2024, PepsiCo India, a subsidiary of PepsiCo, released a press statement announcing the launch of its highly acclaimed hydration brand Gatorade® in Jammu & Kashmir, India. As part of this launch, Gatorade® will make its top three selling products- Lemon, Blue Bolt, and Orange- available in Jammu and Kashmir. PepsiCo India had already launched the 'Sweat Makes You Shine’ campaign in the state and Gatorade® rolled out these three electrolyte energy drinks as part of this program.
Augmenting the growth rate of the F&B sector with technological advancements
Along with mergers, acquisitions, and partnerships, many private companies are focusing on investing in R&D activities and developing new technologies and innovations that will boost their growth rate in the coming period. For example, in April 2023, The Coca-Cola Company, a carbonated soft drinks manufacturer, announced that it was collaborating with Microsoft to capitalize on the opportunities offered by generative AI technologies and improve the robustness of its global supply chains in the long run. The company will make use of Azure OpenAI Service to boost its operational efficiency and gain a lead over its competitors in the industry.
In May 2024, Nestlé, a multinational food processing giant, released a press statement announcing the introduction of plant-based forks in its Maggi Cup Noodles. The press release also stated that the company has partnered with a local startup in India to develop this product. The launch of this two-piece edible fork is in line with the company’s commitment to design and manufacture sustainable products, thereby helping achieve the goal of carbon neutrality.
In June 2024, Danone, a leading player in the dairy market, and Michelin, a manufacturing company, announced that they were joining forces to launch the Biotech Open Platform which will focus on the development of different fermentation techniques and methodologies. Crédit Agricole Centre France has agreed to invest in this project which will look for advancements in biotechnology to accelerate the development of precision fermentation techniques.
Other developments and upcoming trends influencing the food and beverages domain in Q2 2024
Apart from technological advancements and innovative product launches, certain developments and trends have also played an important role in transforming the s sector in the second quarter of 2024. For example, in May 2024, Mondelez, a multinational confectionery company, released a statement stating that it had restarted its Oreo production plant in Trostyanets, Ukraine. The plant was damaged following the onset of the Russia-Ukraine conflict in February 2022 due to which the company had to halt its operations in the country.
In June 2024, Welch’s, an American company specializing in juices, jellies, and jams, issued a press release stating that the company was shifting its headquarters from Concord, Massachusetts to Waltham, Massachusetts in 2025. The company has leased a 60,000-square-foot office space owned by BXP, a real estate investment trust. The CEO of Welch’s was quoted saying that the move to shift the headquarters has been made to capitalize on the new opportunities that are being made available to the company.
In June 2024, Tyson Foods, a packaged food manufacturing company based in the United States, announced the launch of its newest retail offerings- Restaurant Style Crispy Wings and Honey Chicken Bites. The product launch is expected to help Tyson Foods address the demands of its customers in a comprehensive manner and, in turn, aid the company in increasing its footprint across the globe.
How has the F&B domain performed in the second quarter of 2024?
Allied Market Research, to help businesses understand the evolution of the food and beverages sector, has documented the various alliances that have been established in Q2 2024. These mergers, acquisitions, and partnerships highlight the competitive spirit of the key players in the landscape. Also, the innovative product launches and technological advancements in this field showcase the resilience and flexibility shown by businesses in adapting to the evolving nature of the domain. All these factors are predicted to create favorable conditions for the growth of the sector in the years to come.
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