Temperature Check: Food and Beverage M&A

Even in the face of recessionary headwinds, consumer spending in the food and beverage sector has been robust throughout 2023. Much of this is driven by travel and leisure, an industry that tends to go hand-in-hand. Many companies in the space have been treading lightly around M&A dealmaking during 2023, but as recessionary fears subside, we expect them to give in to the pent-up demand for growth through M&A. At the same time however, inflationary pressure on both supply and labor costs have cut into profits in the food service space, which could soften the valuations of these businesses as we head into 2024, thereby spurring increased deal activity, or even lead to some distressed company sales.

Activity level: Full steam ahead