& Beverages
Developments in Agri, Food & BeveragesNovember 2016 editionIndustry report, November 2016& BeveragesIntroductionAgriculture- & food related industriesare booming. Business activities andeconomic development in the Agri &Food markets contribute significantly toour country’s economies, GDP andemployment. For many years, M&AWorldwide has been a dynamic playerin the Agri & Food market. We haveadvised numerous clients during M&Atransactions We are constantly keepingup with trends in the sector and adviseentrepreneurs on M&A, strategic andbusiness valuation issues. We believethat by sharing our knowledge we canguide entrepreneurs to gain qualityinsights into the market and makebetter decisions to increase companyvalue. This industry report summarizesand further builds on our knowledgeand expertise of the Agri & Food sector,recent M&A deals and the appetite ofinvestors in the sector.M&A WorldwideThe Network for Mergers and AcquisitionsEstablished in 2004, M&A Worldwide isa leading global alliance of mid-marketmerger & acquisition specialists. M&AWorldwide presently has 40 memberfirms operating in over 40 differentcountries. All members are closelylinked in a global alliance to adviseclients on mergers, acquisitions,divestitures, joint ventures, ctively, we closed 293 transactionsin 2015.M&A Worldwide has specialized M&Aconsultants in a variety of industries whoare willing to share their knowledge andinsights on various sectors. For moreinformation about its sector specialismsand related industry reports, please visitwww.m-a-worldwide.com1
Developments in Agri, Food & BeveragesIndustry report, November 2016M&Ain the Food IndustryFood companies, faced with new andchallenging market forces, are changingtheir strategic approach to growth.According to a published article fromPWC (2015) the retail landscape ischanging rapidly and small companieswith niche products are able to intensifycompetition with the large, diversifiedfood companies.Consequently they see many industries,including the food industry, reorganizingtheir business models around specificcapabilities.M&A ActivityThe Food industry merger andacquisition activity reached 355 deals in2015. According to the next table, this issomewhat lower than 2014. However2015 is still remarkably higher than theprevious decade displays. This level ofM&A activity confirms that mergers andacquisitions in this industry is ‘’hot’’.The list of top M&A deals in 2015includesthebeforementionedcompany Kraft, responsible for thelargest merger in 2015. On March 25,2015, H.J. Heinz Company, jointlyowned by Berkshire Hathaway and 3GCapital,announcedamutualagreement to merge with Kraft FoodsGroup, Inc., to create a new food andbeverage giant operating as the KraftHeinz Company.Kraft, one of the larger players in thefood market and a strong ‘’acquirer’’ inthe market, have decided to split intotwo separate focus areas based on thiscapabilities argument.This also has an effect on howcompanies view their M&A strategy.Food manufacturers pursue mergersand acquisitions for a variety ofreasons, which will be addressed in thenext paragraphs in more detail.2
Developments in Agri, Food & BeveragesIndustry report, November 2016M&Ain the Food IndustryM&A RationaleAs already mentioned in the firstparagraph, M&A activity is an importantfactor in the food industry. Foodmanufacturers pursue mergers andacquisitions for a variety of reasons, ofwhich the most important drivers aredisplayed in the table besides:A few of these rationales are discussedin more detail hereafter, based onrecent publications related to the foodindustry.ConsolidationThe Financial Times (January 2016)says that, the food industry will facemore and more M&A activity in searchfor economies of scale, sales growthand margin improvement: ‘’We expectconsolidation to accelerate, especiallyin the US, where a number of legacybrands and categories are growing lessfast. Capital markets and, in selectedcases, activists, are putting pressureon these companies to manage theircost base more efficiently and increasecash flow generation, which manybelieve can be better achieved throughgreater scale.’’InnovationThe larger food firms have developedan appetite for innovative start-upcompanies. Coca Cola acquired aminority stake in Suja Juice in 2015, aninnovativeorganicjuice-maker;Unilever acquired two ice-creammakers next to their large Magnum andBen & Jerry brands, to further diversifyand innovate their product portfolio.Other reasons for M&A activityAnother trend is driving M&A and thisis ‘’the snacking trend’’. This is thephenomenon where people start toabandon the traditional three-meal perday structure and move more towardssnacking throughout the day. Stated isthat ‘’the generational shift is causingmore than just changes to traditionalsocial and workplace environments. It’salso transforming the landscape of thefood and beverage industry. Sales ofsnacks accounted for approximately40% of the North American packagedfood market, with continued growthexpected. This is largely due tomillennials, who are snacking morethan any other group in history.’’This fact has caused the large foodplayers to develop an interest for thisniche market. An example is cerealcompany Kellogs, that has seen itssnack portfolio grow to almost 50% oftotal business, compared to only 20%in 2000. Even soft drinks players suchas Coca Cola and PepsiCo haveshown interest in a Greek-yogurtproducer, as yogurt being consideredas a healthy snack.Another,thoughmacro-economicrelated, aspect of the rationale behindM&A is the fact that currently we aredealing with low interest rates andeconomic recovery. This suggests that2016 and 2017 will be strong years forfood deals again, as these factorsmade 2015 a record year for globaldeal making in general: 2015 had atotal of 4.6tn of M&A activity across allindustries.3
Developments in Agri, Food & BeveragesIndustry report, November 2016CountriesOnTheRadarUnited KingdomFood M&A in the UK had a strong startin 2016, with Sysco’s acquisition ofBrakes, a large foodservices group andEquistone’s purchase of Argentinianrestaurant chain, Gaucho. This hascontinued throughout the year, mostrecently with Amplify Brands acquiringcrisp manufacturer Tyrrells. Privateequity has continued to be attracted tohigh quality opportunities with adifferentiated brand and high growthforecasts. Despite the Brexit resultearlier in the year, the food industry isexpected to be relatively well insulatedin the short term due to it’s low-cyclicalnature, the longer term outlook reliesheavily on the ultimate form the UK’spost-Brexit relationship takes.MexicoArgentinaThe processed food industry in Mexicorepresents 4% of total GDP (US 1,144billion in 2015), with continuous growthsince then due to an emerging middleclass and low manufacturing costs onaccessible raw materials. With aforecast value of US 169 billion in2016, this sector has been highlystimulated by foreign investors in thepast years.Argentina is a world leading producerand exporter of foodstuffs. Argentineproducts, which are available inmarkets on six continents, continue toearn the country the highest accoladesbased on a wide range of attributes,including innovation and quality, andbring in annual export sales of overUS 25 billion.The foodservice sector Mexico has atotal revenue of US 1 billion. Casualdining and fast food represent 5% dueto the arrival of big international namesto the market. Foodservice has beingactive in the past years with severalM&A transactions happening.Argentina’s recent M&A activity in theAgri, Food and Beverages industry hasbeen quite dynamic, as exemplified bySanCor, one of the leading local dairyproducers, selling its yoghurt businessin a deal worth US 100 million, or byArcor, the world leading candyproducer, acquiring Mastellone Hnos.for US 75 million.Several international players haveincreased their presence in the countryrecently. Coca Cola acquired a regionalbrand of soy milk-based beveragesfrom Unilever for US 575 million andBrasil Foods acquired Avex, a leadinglocal poultry producer, Campo Austral,a meat processing company, andFrigorífico Calchaquí, a pork processingcompany.4
Developments in Agri, Food & BeveragesIndustry report, November 2016Strong private equity funds (Unigrain,Cerea among others) listed groups(Danone, Pernod Ricard), family groups(Bonduelle, Lactalis) and cooperatives(Tereos, Invivo) are leading the M&AFood & Beverage market in France.CountriesOnTheRadarThe NetherlandsThe Agri, Food & Beverages sector isone of the driving forces behind theDutch economy. The sector createsapproximately 48 billion euros in addedvalue and represents almost 10% of thenational income and workforce.FranceThe last study of German BusinessGroup (PwC France) points 2015 as arecord year in number of transactions inFrance on the market of M&A. IndeedFrance reached for the first time itslevel since the crisis of 2008 its toplevel of M&A activity.In 2015, the processed food industry inFrance stayed at the top of the Frenchindustrial sectors with a stable turnoveraround representing EUR 170 billion.This sector is the largest in France andrepresents 7.8% of the national GDP.Driven by origin labels (AOC, AOP),quality labels (Label Rouge), bio labels(Ecocert), The French food industry hasmanaged to turn premium and highquality in traceability which allowed togrow sales and export.Rabobank, one of the largest banks inthe Netherlands and traditionallyinvolved in Agri, Food & Beveragesbusiness, confirms that M&A activity inthe Netherlands has increased recentlyWith respect to financing transactions inthe food industry, Rabobank states thatsufficient liquidity is available to furtherboost M&A activity in the near future.The Netherlands has a leading positionwithin the international Agri, Food &Beverages sector.Approximately7.5% of the global export within theAgro & Food sector in total is generatedby the Netherlands, placing theNetherlands in second place, precededonly by the United States. TheNetherlandsexports primarily toEuropean countries (80%), as well as toemerging markets such as Asia and theMiddle East.One of the recent deals in the foodindustry in the Netherlands involvesBurger King. In February 2016, aprivate equity fund announced that theywill acquire 27 restaurants, including1400 employees.ItalyShort facts about the Agri, Food andBeverage sector in Italy: Total sales EUR 130 Bln43 M&A deals in Food & Beveragemarket (2015)Italian acquisitions abroad involved thesame number of companies operatingin the Consumer Markets (29 dealseach against 25 in 2014). Conversely,in terms of value, Consumer Marketsjumped to the top of the list with EUR6.0 billion, accounting for 59% of overallactivity.A special mention for Ferrero Groupabout the acquisition of the Britishchocolate maker Thorntons Plc, anothermention should be made for the transferof 25% of Canadian Club Coffee andthe entire share capital of CostaricanCeca SA to Massimo Zanetti BeverageGroup SpA ( 17 million and 4 million,respectively).Sligro Food Group has a rich history ofacquisitions. Also recently, Sligroacquired companies, ranging from foodwholesale companies to a developer ofindustrial kitchen equipment.5
Developments in Agri, Food & BeveragesIndustry report, November 2016The French Wine IndustryA dynamic and attractive market for all kinds of investorsFrance is one of the countries with along history of making wine. With over38,000 wine-producers (“Châteaux”) inFrance - of which 8650 in the Bordeauxarea, including some of the mostprestigious ones in the world such asPétrus,Yquem,ChevalBlanc,Margaux, Latour, Ausone, LafiteRothschild, Mouton Rothschild-, and300 wine-trading firms, France is one ofthe best places for investors.AccordingtotheInternationalOrganisation of Wine (OIV in French),France is the second wine producer ofwines in volume (behind Italy), but thefirst business dealer of wine in valuewith a worldwide market share of 29%.This 29% is equivalent to 8.2 billion.Far behind, we find the second dealerof wine in value, which is Italy, with amarket share worth of 5.3 billion andat the third place, Spain with 2.6billion.Chinese InvestorsFrance has been an attractive marketfor investors for many years. Theseinvestors basically fall into 2 main verydifferent categories: the first categoryconsists of patrimonial investors,interested in securing patrimony over along period and often interested in themost renown chateaux, and the secondcategory consists of industrial playerswho look for industrial synergies andeconomies of scale for distribution, orfocusing on market segments.Most noticeable in the last few years isthe booming interest from Chineseinvestors.Nowadays we count more than onehundred Bordeaux chateaux beingbought out by Chinese groups orwealthy individuals; some for purepatrimonial stake, others with acommercial view. For instance, at thevery end of 2015, the Chinese familyinvestor CHANGYU purchased 90% ofChâteau Mirefleurs from the Frenchwine market leader, CASTEL Group. InFebruary 2016, “Les Domaines CGR”(Château La Cardonne, ChâteauRamafort and Château Grivière), whichrepresents 125 hectares of vineyards,was purchased by the Chinese HUANGfamily for several millions. This lastoperation has been done through theirholding Hong Kong Funshare LifeGroupe Share and it was the largestChinese acquisition in Bordeauxvineyards. These operations show theinterest of Chinese investors to acquirewine real estate for patrimonialpurpose.Other investors and a few Chineseinvestors are not interested inpatrimonial investments. This is thecase of the second richest Chinese inthe world, Jack Ma, the Alibaba’sfounder. Indeed, after his first purchasein Château de Sours, an 80-Hectarevineyard in the Entre-deux-Mers area,Jack Ma carried on his shopping buying2 vineyards in Bordeaux for 12 Million.These last strategic investments areChâteau Pérenne (64 hectares in“Première côtes de Blaye”) andChâteau Guerry (« Côtes de Bourg »).These Châteaux are not Grands CrusClassés and the stated objective ofJack Ma is to dramatically increase theirbusinessleveragingitsinternetdistribution arms on the Chinesemarket.6
Developments in Agri, Food & BeveragesIndustry report, November 2016For Bernard Magrez, the selling ofsome of his assets are strategic.Indeed, the French man who boughtout c. 40 Châteaux wants to sell hisentry-level Châteaux, and to focus onlyon “Grands Crus Classés”. As aconsequence, Bernard Magrez iscurrently looking for a famous Châteauof Bordeaux to ex prestigious ChâteauxlikeChâteauFombrauge,PapeClément or La Tour Carnet.Wine-making Group ADVINIAmong the industrial players that arevery active on the French market is theFrench wine-making group ADVINI.Founded in 1870 in the South-East ofFrance, ADVINI is a publicly listedcompany with a 2015 turnover of EUR240.5 Million. Nowadays, ADVINI owns2195 hectares of vineyards in France,among them, Clos de l’oratoire despapesàChateauneuf-du-Pape,Château Capet-Guillier in Saint-Emilion,Château de Chambert in Cahors. Thecompany also owns vineyards in SouthAfrica and Chile.In October 2016, ADVINI purchased “LaMAISON CHAMPY” based in Beaune inBurgundy (Bourgogne) which owed 22hectares of vineyard. ADVINI investedfor strategic reasons: to start a financialschedule in this vineyard and itsvinificationtools.ADVINIalsopurchased BEJOT in 2016; a winedealer mainly based in Burgundy.BEJOT VINS & TERROIRS founded in1891 is composed of 530 hectares ofvineyards over the world from France toChile, by way of South Africa. Thisworldwide player exports in more than100 countries.TrendsDynamic marketAnother new trend that has been takingforce in the last years is the making oforganic wine and the “biodynamic” vinecultural methods. For the first time, thefamous Château Montrose, bought outby the millionaire entrepreneurs Martinand Olivier Bouygues, is now producingorganic wine. This famous Châteaujoins a group of 88 Châteaux of“Grands Crus classés” who has chosento produce organic wine. Indeed, 75%of “Grands Crus Classés” are currentlytesting organic ways of making wine inorder to respect the environment. Thistrend will get even stronger in the futureaccording to Philippe Castéja, theChairman of the 1855 Grands CrusClassés Council.The wine market has become a verydynamic in the past few years, partiallythanks to both the Chinese investorsand booming consumer markets, butthose are not the only reasons. Thistrend will certainly continue in thefuture. As an evidence, the very recentChinese meetingon the 20th ofOctober, 2016 in Bordeaux organizedby the Chinese billionaire Xijian Zhou,Chairman of Daohe Group, whichgathered at least 80 Chinese investorsto visit Vineyards in the Bordeaux area.Sir Zhou wants to attract its fellows toinvest in French terroir, with a clearobjective of making business and notonly patrimony.There is another trend which could bepointed out, the modernization of thewine distribution. Customers look formuch more entertainment activities thanever. This is why wine shops (“caves àvins”) want to modernize theircommercial concepts in interesting andpleasant places with bars andrestaurants. This new concept allowsstrengthening the client’s purchaseexperiment and attracting youngercustomers. For instance, Cavavin withits 140 business profits purchased “laWinery” which is a pub restaurantwhere customers can chill out andsocialize around bottles of wine incommercial centers.Isabelle ARNAUD-DESPREAUXMBA Capital - France (Bordeaux)7
Developments in Agri, Food & BeveragesIndustry report, November 2016Beer: From Global Brands to Craft BrewersThe Consolidation of GlobalLeadersThe beer production faces a high levelof producer concentration. Each countryhas its «local champion», like Heinekenin the Netherlands, Carlsberg inDenmark,GuinnessinIreland,Budweiser in the USA, or Corona inMexico.The beer market has been owned andis currently dominated by big groups,the three most important being ABInBev, Heineken and Carlsberg. Theseone keep on increasing, in particularwith the acquisition of SAB Miller, theformer second world leader, by ABInBev in September 2015, at anacquisition price of EUR 96 billion. ABInBev now controls more than one-thirdof the beer worldwide market, a marketcapitalization of close to EUR 265billion and generate 23 billionEBITDA margin (36%) and 63 billionrevenue.The Birth of Craft BrewersNot withstanding, the beer market hasfaced a reversal in the last two years. Inthis capsizing trend, the “craft brewers”phenomenon – small, independent andtraditional brewer – made in the USA,took a central place. The craft brewersare growing, sometimes in the veryheart of cities. So this beer industry hasto adapt to this market evolutioncharacterized by the atomization of thebeer player and the recipe research.In the USA, the craft beer salesincreased by 22% in 2014 while thebeer market stagnated ( 1%). The craftbeer market share has reached 11% oftotal beer market (sources: BrewersAssociation). In the European Union,the number of craft breweries increasedby 106% between 2008 and 2013.There are now 800 craft breweries inFrance, versus 700 in 2015. Craft beersrepresent only 5% to 6% of the Frenchbeer market, but they face anexponential growth. Finally, innovationsteers growth against sales decrease.Africa is also an important growthplatform. The main players are settledthere: AB InBev/SAB Miller establishedtheir African center in Johannesburg,and Heineken and Carlsberg settled inAfrica as well.The Response of the WorldLeadersThe craft brewer trend has a promisingfuture, because of few barriers to entry:when a craft beer is sold another one iscreated. On the whole, there are somany acquisition opportunities in thebeer market as well either in largebrands or in craft breweries.In the context of revenues going dowm,the craft beer activity is the only oneevidencing growth. This is why themarket eaders developed superpremium b
Developments in Agri, Food & Beverages Industry report, November 2016 displayed in the table besides: in more detail hereafter, based on Consolidation sho producer, as yogurt being considered believe can be better achieved through s food market, with continued growth made 2015 a record year for global M&A Rationale paragraph, M&A activity is an important makers next to their large Magnum and .
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:
