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Writer's pictureTodd

Five Key Food and Beverage Value Enhancements That Prospective Buyers Look For

Updated: Aug 8, 2022

Selling a business in the food and beverage industry - in already saturated market - has its fair share of complexities. But generating interest from highly motivated prospective buyers doesn't have to be difficult.


The U.S. food and beverage industry generated an estimated whopping $1,005.53 trillion billion in revenues in 2021 annually. In such a competitive market, food and beverage industry owners interested in selling their businesses are concerned about maximizing their company's valuation.

Whether your company is on the production or distribution side of the industry, strategic implementation of key food and beverage business enhancements specific to your operations can add substantial value to your assets.


Buyers seek growth opportunities


Opportunities for growth are essential in attracting prospective buyers for your company. Food and beverage companies can demonstrate the prospect of growth opportunities in the existing distribution or production market.


First, perform a market analysis to identify trends and areas for growth. Next, develop a strategic plan to exploit those opportunities. Finally, implement and monitor the growth strategies' progress.


According to the National Restaurant Association, trends such as plant-based proteins, ESG practices and healthy foods are all the rage in the food and beverage business. Look into these compelling growth trends and how they are beneficial for your business.


Innovative products sell


Food and beverage company buyers and investors are drawn to companies with a business model driven by product innovation and by infusing technology into their operations.


Innovations around the production and distribution of health-centric foods and beverages are indicative of forward-thinking businesses. They create short- and long-term business value by reducing costs and increasing profitability.


Revenue streams are highly valued


Evidence of multiple revenue streams is crucial in food and beverage businesses. A company with the ability to generate consistent revenue is highly prized among buyers.

The expansion of revenue streams can originate by offering variations in products, raw materials sourcing, distribution channels and geographical regions. For example, Burger King not only offered its plant-based protein twist on the classic burger, but also went on to introduce multiple variations on the Impossible Whopper.


The lesson: have more than one product at hand, even if it's a variation of a primary ingredient.


Supply chain strengthens value


After reviewing the Q1 2022 data, businesses that found solutions to the global supply constraints are again garnering a valuation premium compared to their peers. According to global consultancy firm Deloitte, following the latest supply chain trends shows prospective buyers that you adhere to regulatory compliance mandates.

Implementing digital supply chain management solutions for CAPA (corrective action/preventative action), food safety auditing processes, recall management, records management and traceability all contributes to this approach. It also means that you prioritize food safety, food quality, and awareness of costs.


Putting stock in sustainability


As more people become aware of the importance of global environmental risk, sustainability has become a significant driver in food and beverage business enhancements.

Companies that engage in sustainability in the value chain are commanding higher valuations.


Best of class


A strategic upgrade to a food and beverage organization on the production end of the industry isn't necessarily a suitable or sufficient strategic upgrade to one on the distribution side of the sector.


For example, a food and beverage production company implementing a new process method or investing in new equipment differs from a food and beverage distribution company deploying enterprise resource planning (ERP) software to improve its processing, scheduling and tracking.


To learn how your company can benefit and best position itself within the M&A landscape, call or email me now to receive 3 hours of free consultative analysis. Our analysis offers clarity, based on your objectives, if a full or partial exit, recapitalization, divestiture, acquisition or pre-sale exit strategy provides the greatest benefit to you and your company.


Vercor has been delivering M&A expertise for over 25 years. We serve as a trusted partner to help build long term, iterative strategies that ensure you are positioned to meet your unique personal and financial goals whether it is selling, recapitalizing, acquiring or divesting of a division. Now is the time to evaluate, strengthen, prepare and increase the market value of your company regardless of your timeframe.

Todd Cummiskey

Vercor

704-926-6564

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