CHICAGO, ILLINOIS – AUGUST 09: Grocery items are offered for sale at a supermarket on August 09, … [+]
A stream of high-profile M&A deals recently, coupled with robust private equity (PE) activities, has indicated a heightened investor appetite in the U.S. food and beverage sector. However, analysts caution that potentially imposed tariffs, along with economic and labor policy changes during President-elect Donald Trump’s second term could still dampen enthusiasm in certain subcategories.
The latest PitchBook report tracking PE buyouts, growth rounds, and exits in food and beverage CPG revealed that deal activity has remained remarkably resilient. 2024 is on track to approach the 2021 annual peak of 531 deals globally with alcohol, baked good, and celebrity brands dominating transactions.
The U.S. mirrors this global trend with an estimated 44 PE deals in food and beverage counted in Q3 of 2024, compared to 45 deals during the same period in 2021. Overall, 2024 is projected to see a total of 131 transactions, a decline from 164 deals last year, according to data.
Several large M&A deals have also made headlines in early Q4, including PepsiCo’s $1.2 billion acquisition of Siete Foods, Keurig Dr Pepper’s over $1billion deal with Ghost Energy, to Molson Coors’ acquisition of Dwayne ‘The Rock’ Johnson co-founded ZOA Energy. These moves position 2024 as a strong year for the industry.
“These are pretty high-profile acquisitions by CPG giants,” said Alex Frederick, senior emerging technology analyst at PitchBook. “I think PE sponsors will also increasingly focus on trendy consumer segments like energy drinks and fast-growing innovative brands to expand their portfolios.”
Key Investing Areas
Frederick identified three core segments for food and beverage CPG investors in 2025: domestically produced, sustainable, and healthy products, influenced by President-elect Trump’s proposed policies and senior staff appointments.
Trump confirmed plans to impose more than 60% tariffs on Chinese goods, and up to a 20% tariff on other imported goods, which could significantly raise costs of U.S. CPG companies reliant on international sourcing.
“[This would] potentially dampen investor enthusiasm for import-dependent brands, while favoring domestically sourced alternatives,” Frederick explained.
Additionally, there is sustained interest in eco-friendly products and health and wellness offerings. Public figures such as Robert F. Kennedy Jr., recently appointed to lead the Department of Health and Human Services, have fueled this sentiment, aligning with movements to prioritize wellness and environmental impact. Kennedy’s “Make America Healthy Again” pledge aims to tackle chronic health issues among Americans, highlighting concerns such as the harmful effects of artificial ingredients in cereals like Froot Loops on children.
If such themes gain regulatory or public health backing under the Trump administration, Frederick believes, consumer awareness and demand for cleaner food ingredients could further intensify.
However, Trump’s stringent immigration policies could result in labor shortages, posing a major challenge to food production and processing. “So it’ll either constrain supply or massively drive up costs for consumers,” Frederick said. “I don’t see any indication that grocery prices will decline. Consumers will probably use more coupons, shift to budget private-label brands, and look for any strategies to stretch their dollars.”
Fundraising Advice For CPG
Despite global trade complexities, regulatory uncertainties, and evolving consumer demands, the food and beverage space continued to be a fertile ground for investment. Frederick offers a four-pronged approach for CPG brands aiming to navigate a competitive fundraising landscape:
“Companies really need to focus on selling high-margin products, increasing the minimum order quantities and continuously evaluating and improving costs,” Frederick advised.
Brands should also improve their cash flow management and assess profitability across various sales channels. “I recommend startups analyze their profitability by sales channels — direct-to-consumer, retail, or Amazon — and optimize or even eliminate underperforming channels to focus on the most profitable ones.”
Additionally, data-driven decision making is key to the profitability of CPG businesses. “There’s so much data available now,” Frederick said. “Companies can use analytical tools to inform pricing, promotion, inventory strategies, and ensure they’re data driven with all their decisions.”
