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Analysis

Consumer Products M&A update: Q1 2017

Consumer packaged goods (CPG) companies are increasingly investing in experimental startups and developing technologies to meet the demand of shifting consumer demographics and behaviors. This Consumer Products M&A update provides Deloitte Corporate Finance LLC insights and market data analysis that shed light on M&A trends in the Consumer Products industry.

Consumer Products trends

  • Snacking becomes the norm1: Snacking has become more purpose-driven with consumers looking to fulfill nutrition, convenience, and/or indulgence needs, even replacing entire meals on occasion. Ninety-one percent of consumers report snacking multiple times a day and 8 percent replace meals altogether with all-day snacking. Food producers should consider developing premium snacks to address the increasing need for nutritious, convenient, and tasty products on-the-go.
  • CPG venture funds2: CPG companies are creating venture funds to invest in experimental, innovative startups while reducing risks associated with developing technologies internally and full strategic acquisitions. For example, Tyson Foods recently announced the creation of a $150 million venture capital fund called Tyson New Ventures, which has already invested in alternative meat start-up Beyond Meat.
  • Online groceries3: As consumers shift toward online options and household shopping trips decline, many brick-and-mortar food retailers are expanding their digital presence and capabilities to remain competitive. Nielsen research forecasts e-commerce food sales to grow at a 12.2 percent compound annual growth rate (CAGR) from 2015 to 2020 compared to 1.9 percent for traditional supermarkets.
  • Multicultural millennials4: Approximately 42 percent of the 75 million Millennials living in the US are multicultural. Spending more than $65 million each year and influencing over $1 trillion in total consumer spending, multicultural Millennials represent significant opportunity for consumer products companies that are willing to connect to the cultural trends interwoven into all facets of their lives.

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References

1 “Forecasting the Future of Snacking,” Food Business News. March 7, 2017.
2 “Tyson Foods Launches New Venture Fund to Back Food and Agriculture Startups,” TechCrunch. December 5, 2016.
3 “Dilemma in the Meat Department,” Food Business News. February 6, 2017.
4 “Multicultural Millennials: The Multiplier Effect,” Nielsen. January 18, 2017.

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