Now is the time to prepare for the next wave of beverage mergers and acquisitions, whether it's lining up targets, getting finances in order, or identifying the biggest long-term trends that you need to lay the groundwork for now, Jim Watson, RaboResearch senior beverage analyst, says in a new report.
The next round of beverage mergers and acquisitions will be impacted by several changing variables – higher operating costs and interest rates, inflated supplies costs, declining real wages and consumer sentiment, and a potential recession.
Overall deal flow in the U.S. has come down slightly from recent highs, but remains in line with the last 15 years. "Buyers are becoming much more disciplined about valuations they are willing to pay, but will need to be patient until the market undergoes a reset. Deals should be focused on scale, efficiency and risk reduction where possible," he adds.
Vertical integration and nearshoring can help reduce deal risks, as energy costs and the supply chain continue to post challenges in the food and beverage industry.