Beverages - M&A Worldwide
Developments in Agri, Food & BeveragesApril 2017 editionIndustry Report, April 2017Industry Report& BeveragesIntroductionThe Agri, Food & Beverages industries are constantly evolving. This broad sector –whichemploys more than 20% of the world’s population–, is undoubtedly the most influential in theworld. Population growth, a rising consumer conscience and an increasing influence of bigdata are only some key trends driving this industry.For many years, M&A Worldwidehas been a dynamic player inAgri, Food & Beverages, advisingnumerous clients in various M&Atransactions.At M&A Worldwide, we areconstantly keeping up with trendsin the sector, which allows us toeffectively advise companies andentrepreneurs on M&A, strategicand business decisions, valuationissues, etc. We believe that bysharing our knowledge we canguidecompaniesandentrepreneurs to gain qualityinsights into the market and makebeneficial decisions to increasecompanies’ valuations.This report summarizes recentM&A deals in the Agri, Food &Beverages sector, as well asmarket outlook and perspectives.M&A WorldwideThe Network for Mergers & AcquisitionsEstablished in 2004, M&A Worldwide is a leading globalalliance of mid-market merger & acquisition specialists. M&AWorldwide has 42 member firms operating in 42 differentcountries. All members are closely linked in a global allianceto advise clients on mergers, acquisitions, divestitures, jointventures, capital raising, and other strategic transactions.In 2016, the members of M&A Worldwide closed 641 deals infor an aggregate value of over US 3.7 billion.M&A Worldwide is able to provide specialized M&Aconsultants in a variety of industries who are willing to sharetheir knowledge and insights on various sectors. For moreinformation, please visit www.m-a-worldwide.com1
Developments in Agri, Food & BeveragesIndustry Report, April 2017M&A in Agri, Food& BeveragesGlobal M&A ReviewThe global M&A market remainedresilient during 2016, reaching a totalvolume of US 3.9 trillion, making it thethird best year on record.Opportunities for geographic growth,expansion of product portfolio and knowhow, with low cost of funding as acomplement, drove much of the M&Aactivity, in a year in which globaluncertainty(geopoliticalchanges,increased regulatory scrutiny andspeculation around both Brexit andChina certainly did their part) created achallenging business environment thatreduced total deal value by 18% yearon-year.Cross-borderM&Aremainedanimportant feature of the market,accounting for 36% of total volumeversus 31% in 2015. A surge in Chinaoutbound deal volumes contributed tooverall cross-border M&A growth, asChinese companies sought attractiveopportunities abroad. China’s outboundactivity into the U.S. and EMEAincreased by 471% and 252% yearover-year, respectively.M&A Activity in Agri,Food & BeveragesThe most influential development in theAgri, Food & Beverages sector in 2016was Annheuser-Busch InBev NV’sacquisition of SABMiller Plc. for overUS 100 billion, revolutionizing the globalbrewery industry. The merger betweenthe first and second brewer giants islikely to stir the M&A activity in thesector, triggering several subsequentdeals due to anti-trust regulations.Following this megadeal came BayerAG’s acquisition of Monsanto Co. forUS 66 billion, forming an agribusinessbehemoth which will concentrate about aquarter of the world’s market for seedsand pesticides, with over 25 billion insales. As a result of the merger, totalsavings from synergies are expected toreach US 1.5 billion after year three.Nonetheless, this was not the onlyevidence of concentration in theindustry.Asresourcesbecomeincreasingly scarce and margins getthinnerandthinner,marketconcentrations tend to happen in orderto secure economies of scale. Forexample, seeking to achieve an estimateof US 500 million in savings, the PotashCorp. – Agrium Inc. merger with acombined market value of approximatelyUS 27 billion will employ 20,000 peopleand have investments in 18 countries.On the retail side, M&A activity was alsolarge, with Hormel Food Corp. acquiringJustin’s LLC, a producer and marketer ofpeanut butters and snacks, for US 286million and Country Pure Foods Inc.acquiring The Ridgefield’s Brand Corp.,a producer of fruit juice, for US 1.5billion.In addition to these high-value mergers,we are seeing increasing marketconcentrations industry-wide and allacross the globe. Buyers are not onlylooking to obtain economies of scale inorder to reduce inefficient coststructures, but also to incorporatetechnological know-how that allowsmaximizing agricultural productivity in a2
Developments in Agri, Food & BeveragesIndustry Report, April 2017M&A in Agri, Food& Beveragescontext of growing population for a fixedstock of land.The global Agri, Food & Beverages M&Aactivity reached 2,157 deals in 2016 (a20% fall from 2015). The sector wassomehow hit by the same challengesthat the entire M&A industry faced.There are several trends that areaffecting the industry today. How midand-large market players will face themmight affect M&A activity in the shortand long term.M&A RationaleAs mentioned before, M&A activity is animportant factor in the Agri, Food &Beverages industry. Mergers andacquisitions in this sector are beingdriven by a few key macro and microeconomic trends. The table on thebottom right summarizes the keyelements to look out for in 2017.Looking at the big picture, we can seeplayers trying to concentrate upstreamoperations into structures of massproduction in order to obtain economiesof scale, while also supplying theirincreasingly demanding end consumerswith high-quality specialty products.Limited ResourcesIt is no news that population growth is aconcern among policy makers all overthe world. By 2050, the world will have9.7 billion mouths to feed, and the sameprovision of land and resources to do so.This is already impacting M&A in severalways.secure access to primary resources aswell as productive operations thatensure food availability in the future.This is evidenced by repeated Chineseled acquisition in foreign markets,targeting agricultural companies ormeat, pork and poultry producers,mainly. Such was the case ofSmithfields Foods (with Chinese WHGroup as its controlling shareholder),which acquired several pork processingoperations from Hormel Foods for overUS 145 million, or another Chinesecompany, Foresun Group, purchasingEstancias del Sur S.A., an Argentinepork producer for US 75 million. Theseshould not come as a surprise given thatChina accounts for more than half of theworld’s pork consumption.Additionally, producers are trying tostretch this fixed amount of resources asmuch as possible and, in this context,technologies, products and know-howthat expand on agricultural yields arequickly appreciating in value. China,home to 19% of the world’s populationbut only 8% of its arable land is alreadytaking action in this aspect. The stateownedagrochemicalcompanyChemChina is acquiring Swiss seed andcrop protection giant Syngenta for overUS 43 billion, in what will be the largestacquisition evercompany abroad.foranyChinesePicky ConsumersThis increased competition for resourcesand production efficiency does not meanthat anything at the dinner table will getthe job done.Especially in developed economies, buta tendency that is becoming moreuniversal, consumers are becomingprogressively conscious about their dietsand the sustainability of the foods thatintegrate them. We are seeing severallarge Food & Beverage companiesacquiring players in healthy andenvironmentally friendly segments.In line with this, Nestlé’s newlyappointed CEO’s background is runninga large health-care group, indicating thecompany’s realization that, more andmore, consumers are starting to dropfoods that are high in sugars orpreservatives. The White Wave’s FoodCompany, which has been able tosuccessfully attract consumers withhigh-quality and healthy products, wasrecently acquired by Danone in aUS 12.5 billion deal.DriverSecuring ResourcesDetailAs population grows, natural resources (land and water, mainly) begin to feel scarcer. Weare already seeing countries (namely, China and Russia for example) acquiring companiesthat have access to food production to secure food for their population in the future.Economies of ScaleAchieving economies of scale as a driver for M&A is a common denominator across allindustries. This is especially the case in agriculture, as producers aglomerate increasinglylarger plots of lands to create more efficient cost structures.Big Data, Big YieldsAs resources start to tighten, players want to make the best use of their assets. Precisionfarming is becoming a tradition among all producers and companies providingagrochemicals that enhance agricultural production or know-how that provides bettertechniques are starting to dominate the M&A scene.Price VolatilityWe are currently in the finishing stages of a commodity slump, having seen some of thelowest prices of the past decades. In this context, specialized producers will start todiversify and hedge against future price fluctuations.Conscious ConsumersWe are seeing consumers become more demanding with respect to what they consume.In a context where people want to eat healthier foods and animal welfare is a growingconcern, governments are tightening regulations and labelling requirement are forcingproducers to inform exactly what is contained by every product that is sold.First of all, producers are trying toSource: JP Morgan: 2017 M&A Global Outlook; KPMG: Eight key trends driving M&A in Agribusiness; United Nations Department of EconomicAffairs: World population projected to reach 9.7 billion by 2050.3
Developments in Agri, Food & BeveragesIndustry Report, April 2017Countries on theRadarAustraliaArgentinaArgentina is a world leading foodproducer. Once known as the world’sbreadbasket, Argentina exports itsproducts all over the world. Meat, wine,soybeans and corn are only some of thegoods that generate over US 25 billionof export sales every year.Argentina’s recent M&A activity in theAgri, Food & Beverages industry hasbeen quite dynamic, with several highprofile deals having closed successfully.Los Grobo Agropecuaria S.A., a leadingagroindustrialcompany,hasincorporated a local private equity fund,Victoria Capital, as a controllingshareholder, resulting in a US 100million deal for 75% of the company.The assets of Rasic Hnos. S.A. (one ofthe most relevant poultry producers inArgentina) were acquired by a localconsortium for US 121 million in atransaction in which Finanzas & Gestión,M&A Worldwide’s member firm inArgentina, had a leading advisory role.Finally,MainProcessS.A.,amanufacturer of high-performance fruitpreparations, was sold to multinationalcompany Agrana Fruit S.A.S. for US 48million (Finanzas & Gestión was sellside advisor in the deal).Food and beverage is a major sector forthe Australian economy at circa US 100billion, with products processing beingAustralia'slargestmanufacturingindustry. A diverse range of produce isavailableduetolargeclimaticdifferences across the continent, fromthe tropical north to the temperate south.Australia also has a counter seasonaladvantage when supplying internationalmarkets in northern hemisphere.With a reputation as a producer of clean,green and safe food Australia hascreated high global demand for its foodproducts, exporting to over 200 markets.In 2016 M&A activity included: Allegroprivate equity acquiring Pizza HutAustralia from Yum! Brands andsubsequently adding the Eagle Boyspizza chain with an additional 114stores; Burra Foods, an Australianprocessor and exporter of premium dairyingredients, being acquired by China’sFuyuan valuing the business at approx.EUR 208m; and Freedom Foods GroupLtd acquiring 50% of Pactum DairyGroup for EUR 35m.BrazilMost commonly referred to as “the mostresilient sector of the country’seconomy”, Brazilian agribusiness hasnot only sustained growth during the2015-16 harvest, but has also been astrong source of M&A activity in 2016(promising opportunities lie ahead).This year s national harvest is deemedto hit a historical high, as agribusiness2017 GDP will grow at a 2% rate.Consolidation is expected to continuehappening in segments such asfertilizers (high correlation to harvestforecasts), animal health and nutrition(large national meat producers, such asJBS) and distribution (many Asiancompanies looking after agro supply,such as Hunan Dakang).DenmarkThe Danish food sector representsabout 25% of Denmark's total exportsand employs approximately 10% of theprivate sector employees. The industryfocuses on innovation through thedevelopment of new products, ecologyand production technologies includingrobots.Being Denmark's one of the world'slargest food exporters, and with a verysignificant position in the development oftechnology and robots for the foodindustry, the food sector is stronglycompetitive. This is supported by a goodbusiness climate.This has resulted in a large and growinginterest from foreign players for theacquisition of companies in the Danish4
Developments in Agri, Food & BeveragesIndustry Report, April 2017Countries on theRadar (cont.)food industry as ries. At the same time we arelooking into a further consolidation of theindustry. in 2016 Tulip / Danish Crownacquired the Danish Top Food A/S, andin 2017 Danish Crown acquired thecattle slaughterhouse Teterower Fleischin Germany. Amanda Seafood A/S wassold to Insula, Norway, DK Food wassold to Private equity fund and TicanSlaughterhouse was acquired by theGerman Tönnies.US 1.1 billion or Danone acquiringWhitewave in a 21x EV/EBITDA multipletransaction. MBA Capital, one of M&AWorldwide member firms in Franceadvised JPS Lait (organic dairyproducer) on the sale of the company toprivate investors.(France) by Campari Milano SpA forUS 720 million.For 2017, even though politicaluncertainties lie ahead, M&A activity inFrance and Europe is expected to grow.For the Agri, Food & Beverages sector,more than 15 deals have already beenannounced.NetherlandsApproximately 7.5% of global exportswithin the Agri, Food & Beveragessector is generated by the Netherlands.ItalyAccording to a report by Mergermarket,Italy has recorded 509 M&A transactionsfor a value of almost US 55 billionduring 2016.FranceWith over US 160 billion in deal volume,French M&A activity lost 9% ascompared to 2015. French companies,however, have been great targets forinternational investors.2016 was also a solid year for the Agri,Food & Beverages sector. According toCFnews, 2016 was marked by 40transactions closed and over 100 dealsdone if we take into account LBO’s andcapital raising. Among the majortransactions closed in 2016, we canmention Groupe Bel (leading actor in thecheese market) taking over MaterneMont Blanc (French leader in fruitscompote) for US 940 million; Agrial (anagriculture cooperative group) acquiringCoopérative Vergers du pays d’Auge(another cooperative group) for overThe Agri, Food & Beverages sector isone of the driving forces behind theDutch economy. The sector createsapproximately US 53 billion in addedvalue and represents almost 10% of thenational income and workforce.Transactions in the Agri, Food &Beverages sector over the last 12months were broadly in line with thelevels of previous years (US 7.7 billion).The sectors that will grow the most arethose producing vegetable products,particularly vegan and organic, snacks,sweets, chocolate, canned tomatoes,olive oil, mineral water, soft drinks andwine, specialty coffee, dry and freshpasta, cheese and dairy products.A recent transaction in the wine sectorworth mentioning is the acquisition ofSociété des Produits Marnier LapostolleFor 2017, the food sector is expected togrow marginally. Within the entire supplychain, the integration, the focus oneconomies of scale and a furtherconsolidation of the market will continueto influence and affect M&A activity.Recent deals worth mentioning areHeineken acquiring both a Brazilianbrewery (deal value: US 734 million)and a New Zealander brewery (TuataraBrewing Company).RomaniaRomania is one of the most dynamicmarkets in the EU, registering YoY GDPgrowths between 3.8% and 4.8% overthe last 4 years. Food consumption wentup 15.2% in 2016, and 8.5% in 2015.During 2016, foreign food retail networksopened close to 250 new stores, a figurethat is expected to grow to 300 in 2017.Partly thanks to the EU’s allocation of5
Developments in Agri, Food & BeveragesIndustry Report, April 2017acquirers, the majority of whom werebased in Europe or North America.Targets have included foodservice,retail, restaurants, agricultural productsbut the majority of the focus has been onfood and drink manufacturers.Countries on theRadar (cont.)over US 10 billion to the National RuralDevelopment Program, local food andbeverages production remains strong.M&A activity in the Agri, Food &Beverages was strong in Romaniaduring2016.Japanesebrewingcompany Asahi Group acquired UrsusBrewery, a local leading beer producer,andPremierCapitalacquiredMcDonald’s Romanian operations, whileOrkla, a top international FMCG player,consolidating its position in CentralEuropean markets, acquired Hame, aleading branded food company with astrong regional presence.bought Britain's GourmetKitchen for US 140 million.BurgerSouth African companies continue tolook offshore. The Global TransactionsForecast by Baker McKenzie haspredicted that the South African M&Amarket will grow by 66% in the next twoyears. South Africa is also included inthe 10 countries predicted to see themost growth in the M&A and IPOmarkets in the next two years.International players who see SouthAfrica as the entryway to Africa haveincreased their presence in the country.A recent McKinsey report highlights thatthe region has robust long-termeconomic fundamentals.South Africa22 deals were finalized in the Agri, Food& Beverages sector in South Africa in2016, to a value of US 1.2 billion. The largest deal by far was theacquisitionofSouthAfricanSABMiller by Anheuser-Busch InBevfor US 103 billion. It was the thirdlargest acquisition in history.Bidvest unbundled into Bidvest, amajor diversified industrial groupoperating mostly in Southern Africaand Bidcorp, a global foodservicebusinessoperatingonfivecontinents.Fast food group Famous BrandsUnited KingdomLate 2016 and early 2017 have shownconsiderable deal activity in the UK foodmarket, with several notable large dealsbeing completed. These include Tesco’sacquisition of foodservice firm, Booker,Amplify’s purchase of potato chip brandTyrrells and Nagatanien’s expansion ofits operation in the UK through healthyingredientsmanufacturer,ChaucerFoods.United StatesAgribusiness in the US has seenmassive consolidation. In 1940 therewere 6 million farms averaging 67hectares each while today there are lessthan 2 million farms averaging almost200 hectares each.Geographically, the US is a wealth ofregional agricultural production withCalifornia providing over US 45 billionor 11% of the agricultural productionfollowed by Iowa (8%), Nebraska (6%),and Texas and Minnesota (5 % each).Food production is also heavilyconcentrated in multinational companiessuch as Pepsico (over US 40 billion insales), Tyson Foods (US 34 billion),Nestle (US 28 billion), JBS USA (US 24billion) and at least nine morecompanies with over US 10 billion insales.These large food companies have beenactive acquirers of smaller producersover the last 10 years and are now bothexpanding and realigning their portfoliosof producers and brands.Despite the Brexit vote in June of lastyear deal activity in the sector has beenstrong with a continued high proportionof the deals being undertaken by foreign6
Developments in Agri, Food & BeveragesIndustry Report, April 2017Opportunities in Argentina’s Lemon IndustryLargest lemon and lemon sub-products exporter in the world attracts foreign investor interestIntroArgentina is the leading exporter oflemons and lemon sub-products, with amar
& Beverages ensure food availability in the future. secure access to primary resources as well as productive operations that This is evidenced by repeated Chinese-led acquisition in foreign markets, targeting agricultural companies or meat, pork and poultry producers, mainly. Such was the case of Smithfields Foods (with Chinese WH Group as its controlling shareholder), which acquired several .
beverages 14800 coca cola 500ml beverages 48722 coca cola light 500ml beverages 14801 fanta 500ml beverages 39977 appy fizz sparklin/apple drink 250ml can beverages 42176 e/h apple soda 1.5l beverages 5029827 twistee apple with green tea 350ml beverages 67101 lion club soda 500ml beverages 26901 kik c
Food and Beverage Department has duties in producing, serving and selling food and beverages to the guest in hotel. Food and Beverages is divided into tw o sections those are Food and Beverages Product and Food and Beverages Service. The main function from this department is food and beverages product as a major of producing foods and beverages
beverages so that we can decrease our reliance on imports from outside the province, and the country. This local food and beverages strategy was created, and will be implemented and measured, in a collaborative manner through a multi-departmental committee that includes government, representatives from the food and beverages sector and Indigenous community representatives. This will ensure .
The rapid uptake in plant-based foods and beverages is keeping manufacturers on their toes. Plant-based beverages and other dairy-alternative beverages are gaining a signifi cant consumer base, driven most recently by people’s increased focus on health and sustainability as well as the fact that there are simply more high-quality products available for people to explore and enjoy. What are .
BEVERAGES!!! Your beverage selection is an important complement to your menu. ! BEVERAGE SERVICE OPTIONS Beverage Package An all-inclusive price charged per guest inclusive of beverage service staff, glassware, ice & equipment.!! Consumption Basis! Beverages charged based on your guests’ actual consumption. When beverages are served on a consumption basis, staff service charges will apply on .
dairy beverages made from nut, potato, soy and rice. Flavoured and herbal teas, flavoured coffees, coffee substitutes. Cereal and malted beverages (e.g. Ovaltine , chocolate malt and those with malt flavour, Postum ), non-dairy beverages (nut, potato, soy rice) made with barley malt extract, barley-malt flavouring or oats. Alcoholic Beverages
a significant volume of traditional alcoholic beverages (Table1). About eight million hectoliters of Ethiopian traditionally fermented alcoholic beverages are produced yearly. Commercially and traditionally produced alcoholic beverages have an almost equal market share [4] and annual per capital pure alcohol consumption in the country is about .
2.10 Beverages (Other than Dairy and Fruits & Vegetables based) FOOD ADDITIVES PERMITTED FOR BEVERAGES The products as mentioned above may contain food additives as given in Appendix A (Table 2, 3, 8, 9 and 10). Generally, the additives that are allowed in Beverages are as follows:
