Overview

Beverages market has been among one of the hottest by number of completed M&A deals in F&B industry and during last five years it consisted around 18-23% from total completed F&B deals. Therefore, in this F&B report we will cover M&A trends in Beverages around the world.

Global M&A trends
During the first 3Q of 2019 there were completed 85 transactions in beverages industry compared to 95 deals during the same period of 2018. Europe was the most active scene for M&A in beverages industry with around 50% of total completed deals (Western Europe 38% and Eastern Europe 12%), followed by North America with 13%. However, the largest transaction in whole F&B industry this year was announced in Australia. Asahi Group Holdings (Japan) announced about decision to acquire the leading Australian beer and cider producer – Carlton & United Breweries from Anheuser-Busch InBev for USD 11.3 billion. Asahi Group rationalizes their decision for this acquisition seeking to bring together some of Australia’s best known and most loved brands across the alcohol and non-alcohol categories, including Schweppes, Solo, Asahi and Peroni along with Carlton Draught, Victoria Bitter, Great Northern and Pure Blonde. This would lead to potential cross-selling possibilities in different regions and possibility to distribution and logistics costs due to synergies and scale.

Top brand are challenged by newcomers
Asahi and CUB mega deal is similar to visible trends in smaller size M&A as well. Members of M&A Worldwide in coverage of their countries, reports that largest beverage brand producers are challenged by newcomers, which allows for craft and other premium producers increase their market share. The largest beverages producers are looking ways how to fight declining sales, improve their EBITDAs and consolidation is one of the best cures both for sellers and buyers due to potential synergies in manufacturing and distribution.

The line between alcohol and soft drinks’ producers is further disappearing
It’s already normal that alcohol producers own soft drink producers and soft drink producers are going into alcohol market to fight for the market share. Coca Cola is very good example of it, as they launched Lemon-do an alcoholic soft drink in Japan. They are also launching Coca cola with coffee this year.

Non-alcohol beer, cider, wines and other premium drinks are booming
It is influenced by changing lifestyle of consumers which are choosing more healthy drinks and food. The other trend we see is that countries are trying to solve social problems by prohibiting alcohol advertisements in mass & media. Therefore, alcohol producers started to advertise non-alcoholic versions of beer, cider, wine, cocktails mixes and other premium non-alcoholic drinks, which are now growing fast in many markets. Therefore, it is expected that this segment should continue to grow in future and gain much bigger market share, which is now considered still very low.

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