Apr 26, 2023

Food Distribution Market M&A Update – April 2023

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Food Distribution Market Players Elevate Focus on Pricing Power and Channel Exposure

Capstone Partners latest Food Distribution Market Update examines how the persistent inflationary environment has made pricing power the leading determinant of performance in the broader Food & Beverage sector. Sector participants have been striving to maintain margins amidst soaring commodity and labor costs by passing on elevated prices to consumers, but have had varying levels of success.

In the face of these challenges, many food distribution players of scale have managed to maintain substantial sales and gross profit increases. However, sector participants—and those who have suffered significant margin compression in particular—are expected to shift focus towards case load growth, operational synergies, and inorganic strategies to drive growth moving forward.

Also included in this report:

  • Insights into how foodservice distributors can optimize their pricing strategies to drive revenue growth.
  • Examination of top acquirers in the space and their current criteria for identifying acquisition targets.
  • Analysis of sector M&A revenues, EBITDA purchase multiples, and key valuation drivers for middle market businesses.

As food distributors continue to navigate the ongoing inflationary environment, Capstone’s latest report provides crucial insights into the strategies employed by sector participants to maintain profitability and growth. With the focus on pricing power and channel exposure, businesses of all sizes can learn how to optimize their pricing strategies and target potential acquisition opportunities in the evolving market landscape. The report’s detailed analysis of sector trends and valuation drivers provides valuable information for investors, business owners, and industry professionals alike. Download the full report to stay ahead of the curve in the competitive Food & Beverage sector.

Capstone Partners’ Consumer Investment Banking Team provides M&A, capital formation, and financial advisory services to the owners of middle market businesses in the consumer and retail industries. Our team partners with leading mid-to-large sized consumer businesses that serve growing end-markets. For more information on the Food Distribution market trends featured in this report or to speak with one of our Consumer Investment Banking Team members about how to grow, value, and/or sell your company, we are here to help. Contact us today to start a conversation.

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