Despite macroeconomic headwinds such as inflationary pressures, supply chain disruptions, and fluctuating interest rates, private equity deal flow in F&B has remained steadfast, adapting to market shifts and capitalizing on emerging trends. Investors continue to see F&B as a compelling sector, offering a blend of recession-resistant assets, high-growth niches, and scalable brands that align with shifting consumer demands.

From health-conscious food trends to tech-driven innovations in meal solutions, private capital is flowing into sub-sectors poised for long-term expansion. While the market experienced pandemic-induced volatility, recent years have showcased a resilient and strategic recovery, particularly in premium consumer brands, plant-based alternatives, and direct-to-consumer food models. This report provides a comprehensive analysis of private equity’s role in shaping the industry, detailing deal trends, sector-specific opportunities, and the evolving exit landscape. As F&B investment patterns evolve, understanding the drivers, risks, and future outlook will be key for investors looking to capitalize on this high-growth, high-demand sector.

Private equity deals in the Food & Beverage sector

The food and beverage sector remains a dynamic and resilient landscape for private equity (PE) investment, demonstrating strong adaptability to shifting consumer preferences, macroeconomic fluctuations, and evolving supply chain dynamics. 

While the sector faced headwinds from inflationary pressures, rising input costs, and supply chain disruptions in recent years, PE deal activity has remained relatively stable, with notable surges in key periods. The steady flow of capital into food & beverage underscores the sector’s appeal as an essential industry with strong consumer demand, innovation-driven growth, and a mix of recession-resistant and high-margin subcategories.

A deeper look at PE deal volume from 2019 to 2024 reveals a cyclical yet persistent appetite for food & beverage assets. The pre-pandemic boom in 2019 saw heightened activity, followed by a temporary contraction in 2020 amid COVID-19 uncertainty. However, deal volume rebounded strongly in 2021 as investors capitalized on post-pandemic recovery tailwinds. 

The years 2022 and 2023 reflected a more tempered investment climate, influenced by tightening monetary policies and shifting risk appetites. Yet, as we progress into 2024, dealmaking is once again on an upward trajectory, with Q3 2024 marking one of the most active quarters in recent years. This resilience signals continued investor confidence in the sector, particularly in high-growth niches such as plant-based proteins, premium packaged goods, and tech-driven food innovations.

Key takeaways from chart

• Cyclical Investment Trends: PE investment in food & beverage follows a cyclical pattern, with strong deal activity in 2019, a pandemic-driven slowdown in 2020, and a sharp rebound in 2021. The moderation seen in 2022-2023 coincides with broader market trends, including rising interest rates and valuation recalibrations.

• Resurgence in 2024: The uptick in deal volume in Q2 and Q3 2024 suggests renewed investor confidence. With 151 deals in Q3 2024—the highest volume recorded in recent years—this momentum signals strong appetite for M&A in food and beverage.

• Shifts in Consumer Preferences Driving M&A: Investors are targeting companies that cater to evolving consumer trends, including sustainability, plant-based alternatives, functional foods, and premium convenience products. These sub-sectors have demonstrated strong pricing power and long-term growth potential.

• Strategic Acquisitions in the Face of Economic Uncertainty: The food & beverage sector has historically been a safe haven during economic downturns. PE firms are doubling down on assets with stable cash flows, pricing flexibility, and strong brand equity, balancing risk exposure across portfolios.

• Valuations and Deal Structures: While deal volume is on the rise, valuations remain a key consideration. Many transactions are structured with earn-outs, minority stakes, and roll-ups to mitigate risk and enhance long-term returns, especially in an environment of higher borrowing costs.

• Private Equity’s Long-Term Outlook: The sector’s fundamentals remain strong, with continued consolidation expected in fragmented sub-industries such as specialty food manufacturing, beverage brands, and restaurant chains. As interest rates stabilize and capital deployment accelerates, PE investors are likely to lean into food & beverage as a core investment theme in the coming years.

Health and sustainability drive PE food investment

The food and beverage sector continues to be a focal point for private equity (PE) investors, with deal activity reflecting both shifting consumer preferences and broader market dynamics. Within this space, investment trends by subcategory highlight evolving priorities, ranging from sustainability-driven meat alternatives to the steady resilience of traditional baked goods. 

As private capital seeks opportunities in both high-growth and defensive segments, the composition of deals by type provides critical insight into where institutional investors are placing their bets.

Looking at deal activity from 2019 through 2024, we observe distinct patterns in investment flows. Categories such as meat, poultry, and alternatives have experienced fluctuations, peaking in 2021 before dipping and then recovering in 2024, reflecting changing demand for protein sources and plant-based innovation. 

Baked goods, on the other hand, have remained a strong performer, maintaining investor interest due to their staple status and ability to command brand loyalty. Meal kits and prepared foods, which saw a surge in investment during the pandemic, have since experienced a more tempered trajectory, while frozen foods show renewed investor interest in 2024. This category-specific analysis underscores the nuanced nature of food & beverage investing, where growth, consumer sentiment, and macroeconomic conditions play pivotal roles in shaping capital deployment.

Key takeaways from chart

• Resurgence in Meat, Poultry, and Alternatives: After peaking at 56 deals in 2021, this segment saw a notable decline in 2022 and 2023, before rebounding in 2024. This resurgence signals renewed investor interest, likely driven by innovations in plant-based and cultivated meat, as well as sustained demand for high-protein foods.

• Baked Goods’ Resilience: With the highest deal volume across all categories, baked goods have consistently attracted PE capital. The segment’s stability, alongside increased consumer demand for premium and artisanal offerings, has made it a strong investment theme.

• Fluctuating Interest in Meal Kits & Prepared Foods: After experiencing a pandemic-driven boom in 2021 (18 deals), this category has since faced cooling investor interest. The decline to just 8 deals in 2024 suggests that many early players have either matured or exited, with fewer new entrants gaining traction.

• Frozen Foods Making a Comeback: The sector dipped in 2020 but has shown steady growth, with deal volume increasing to 29 in 2024. This rise aligns with consumer demand for convenient, longer-shelf-life meal solutions, making frozen foods a defensive play in an inflationary environment.

• Dairy & Alternatives Remain Steady: Deal activity in dairy and alternatives has been relatively consistent, with investment peaking in 2021 (44 deals) and maintaining stable levels through 2024. This suggests ongoing interest in both traditional dairy and plant-based alternatives, as investors look to balance portfolios with diversified protein sources.

• Shifting Capital Allocation Strategies: The variations in deal volume across these categories highlight PE firms’ agility in responding to changing market dynamics. While baked goods and frozen foods remain strongholds, categories such as meal kits are seeing diminishing momentum, indicating a shift in investment strategies toward long-term scalability and profitability.

PE-backed exits in the Food & Beverage sector

Private equity (PE) exits in the food and beverage sector are a key barometer of investor confidence, liquidity trends, and broader market sentiment. Over the past six years, exit activity has reflected both cyclical economic factors and industry-specific dynamics, with varying exit strategies playing a crucial role in shaping portfolio performance. 

As PE firms seek optimal pathways to monetize investments, the landscape of buyouts, acquisitions, and public listings provides valuable insights into where the most lucrative opportunities, and challenges, lie.

A review of PE-backed exits in the food and beverage industry from 2019 to 2024 highlights a resurgence in buyouts and acquisitions, with 2024 marking the strongest year for exits in recent history. Buyout exits surged to 58 deals, the highest since 2021, signaling renewed appetite for secondary buyouts and sponsor-to-sponsor transactions. Acquisitions remain the dominant exit route, with 98 deals in 2024, reinforcing strategic buyers' continued interest in acquiring established food & beverage assets. 

However, public listings have struggled, with just 5 IPOs in 2024, reflecting ongoing challenges in the equity markets and investor caution toward new issuances. These trends underscore a shifting exit landscape, where PE firms are prioritizing M&A-driven liquidity over public market exits.

Key takeaways from chart

• Buyouts Rebounding Strongly: After dipping to 26 exits in 2020, buyout transactions have climbed steadily, with 2024 marking a new high at 58 deals. This resurgence indicates increasing secondary market activity, with PE firms opting for sponsor-to-sponsor sales and private transactions over more volatile public market exits.

• Acquisitions Lead as the Preferred Exit Strategy: With 98 deals in 2024, acquisitions continue to be the dominant exit route for PE-backed food & beverage companies. Strategic buyers and corporate players remain highly active in the sector, targeting well-established brands and scalable food assets to enhance their portfolios.

• Public Listings Losing Momentum: Despite a peak of 20 IPOs in 2021, public exits have declined significantly, with just 5 in 2024. This sharp downturn highlights a more challenging IPO environment, where investors are favoring proven, cash-generating assets over riskier new listings.

• M&A Remains the Most Reliable Liquidity Pathway: The dominance of acquisitions and buyouts suggests that PE investors are leaning toward faster, more controlled exits, as opposed to navigating the unpredictable public markets. This trend is likely to persist, especially in an environment where interest rates and valuation expectations are still stabilizing.

• Strategic Buyers Driving Deal Flow: The high volume of acquisitions suggests that food conglomerates, consumer goods giants, and cross-sector investors are aggressively pursuing PE-backed food and beverage brands. These buyers are particularly interested in high-growth categories such as premium food brands, health-conscious products, and sustainable packaging innovations.

• Future Exit Outlook: With M&A activity remaining strong and IPOs subdued, PE firms will likely continue leveraging buyouts and acquisitions as primary exit strategies in the coming years. If equity markets stabilize, we may see a gradual return of IPOs, but in the near term, secondary buyouts and corporate acquisitions will remain the key focus areas for food and beverage exits.

Regional analysis

The global food and beverage (F&B) mergers and acquisitions (M&A) landscape continues to be shaped by regional economic conditions, shifting consumer preferences, and strategic capital deployment. As private equity firms and corporate investors navigate these dynamics, regional trends offer a clear perspective on where deal activity is most concentrated. 

North America and Europe continue to dominate the F&B M&A space, collectively accounting for over 75% of global transactions, while Asia-Pacific remains a critical growth market. Meanwhile, deal flow in South America, Africa, and the Middle East remains limited but presents emerging opportunities.

A breakdown of F&B M&A activity by region underscores North America's leading position, with 39.2% of global deal volume, driven by strong corporate consolidation, private equity interest, and high levels of consumer demand. 

Europe follows closely at 36.8%, benefiting from a mature market structure and cross-border investment activity. Asia-Pacific, accounting for 21%, continues to see rising deal flow, fueled by growing middle-class consumption and investor interest in scalable F&B businesses. In contrast, South America (1.8%) and Africa/Middle East (1.2%) remain smaller players in the global M&A landscape, constrained by economic volatility and limited deal-making opportunities.

Key takeaways from chart

• North America Leads Global F&B M&A Activity (39.2%): The region's dominance in deal flow is driven by a combination of private equity-backed acquisitions, strategic corporate consolidations, and the strong financial ecosystem supporting deal-making. Categories such as health-conscious foods, plant-based alternatives, and premium beverages remain hot investment targets.

• Europe’s Strong Position in Cross-Border M&A (36.8%): European food & beverage deals remain robust, supported by a high concentration of multinational food giants, regulatory stability, and strong private equity activity. Cross-border transactions remain a key trend, as firms look to scale across EU markets and beyond.

• Asia-Pacific Emerges as a Growth Hub (21.0%): While North America and Europe lead in deal volume, Asia-Pacific is witnessing an increasing share of F&B M&A, particularly in China, India, and Southeast Asia. This growth is driven by expanding consumer spending, urbanization, and demand for international food brands. Investors are targeting high-growth segments such as convenience foods, functional beverages, and e-commerce-driven food distribution.

• Limited but Noteworthy Activity in South America (1.8%): While the region accounts for a smaller share of global M&A, strategic acquisitions in Brazil, Argentina, and Chile have been notable. Investors are particularly drawn to agribusiness, premium exports (e.g., wine, coffee), and regional food brands with international appeal.

• Africa & Middle East (1.2%) – A Frontier Market with Long-Term Potential: Though currently a minor player in F&B M&A, Africa and the Middle East present long-term opportunities, especially in food security investments, supply chain infrastructure, and sustainable agriculture. Gulf-based investment funds are showing increasing interest in food-tech and alternative protein ventures.

• Future Regional M&A Trends: As global capital flows evolve, expect continued dominance from North America and Europe, while Asia-Pacific accelerates as an investment destination. South America and Africa/Middle East may remain niche markets, but with selective investment opportunities in agriculture, specialty foods, and export-driven brands.

Conclusion: The Future of Private Equity in Food & Beverage

As the food & beverage sector continues to evolve, private equity investment is expected to follow a trajectory of consolidation, innovation, and strategic capital deployment. The recent resurgence in deal activity—especially in high-growth subcategories such as sustainable foods, premium packaged goods, and food technology—underscores the sector’s long-term attractiveness. Investors are increasingly drawn to brands with strong consumer loyalty, pricing power, and scalable business models, positioning F&B as a core investment theme in the coming years.

While challenges such as valuation recalibrations, inflation-driven cost pressures, and shifting regulatory landscapes remain factors to watch, the fundamentals of the F&B sector remain strong. Private equity firms are expected to accelerate deal-making in fragmented sub-industries, target category leaders for acquisition roll-ups, and explore new exit strategies to maximize returns. With global M&A trends indicating strong investor confidence, the F&B sector will remain a prime destination for private capital, offering resilient returns, strategic expansion opportunities, and long-term market value. Investors who adapt to consumer shifts, leverage operational efficiencies, and deploy capital effectively will be best positioned to capture value in the next wave of food & beverage innovation.

Sources & References

S&P Global. Private equity food and beverage drops to below $B in aggregate value https://www.spglobal.com/market-intelligence/en/news-insights/articles/2022/12/private-equity-food-and-beverage-deals-drop-to-below-10b-in-aggregate-value-73498256

Pitchbook. Health focus drives PE Food & Bev. https://pitchbook.com/news/articles/a-health-focus-drives-pe-deal-growth-in-food-beverage-in-2024#:~:text=PE%20investment%20in%20food%20and,deals%20thriving%20and%20exits%20surging&text=The%20food%20and%20beverage%20sector,growth%20despite%20a%20slow%20Q4.

Charter Capital Partners. Food and Beverage Industry Update. https://www.chartercapitalpartners.com/food-and-beverage-industry-update-q3-2024/

PMCF. Food & Beverage Pulse Q4. https://pmcf.com/industry-updates/food-beverage-ma-pulse-q4-2024/