Page 9 - Food&Drink magazine July 2022

INDUSTRY REPORT
GEOGRAPHIC
An acquirer may look for a strong business in a particular location, such as premium foods from Tasmania, or wines from a specific region. Conversely, the acquisition of Select Fresh Group by Costa Group gave the company access to West Australian markets and state of the art warehouses in Perth.
CONSOLIDATION
This is when achieving economies of scale through cost savings and revenue synergies are the goal. For example, Nature One Dairy’s acquisition of Nepean River Dairy provided much greater capacity.
MARKET SHARE
This is attractive for an acquirer looking to sell a broader range of products to its existing client base, as well as selling existing products to new clients. Recent acquisitions by Lion have provided brands such as Little Creatures and Four Pillars access to a wider market.
CUSTOMER/CHANNEL
An acquirer may be keen to purchase a business in a different part of the supply chain to ensure greater control through vertical or horizontal integration. The merger of Oceanic Agencies, a major player of seafood packaging, into the Close the Loop Group allows the group to provide end to end packaging solutions.
KEY PEOPLE
Acquiring a business and securing the specialist skills of its personnel can count for a lot, particularly in the food and
beverage industry where a founder’s reputation, or the charisma and technical skills of key employees can be a major selling point.
PRODUCT EXPANSION/ DIVERSIFICATION
This is when an acquirer is looking for the opportunity to diversify or expand their current product offering. Aaron Zerefos’acquisitionof
OPPOSITE: Openway Food Co. started with more than $100m in turnover and
150 SKUs by acquiring three companies with backing from Five V Capital. Pictured is CEO Andrew Loader with some of the products acquired.
LEFT: The Arnott’s Group acquisitions of Freedom Food Group’s Snacks & Cereals division and snack manufacturer Diver Foods provided the biscuit maker with the foundations of an entire new business unit, Good Food Partners.
DrinkScene enabled the alternative milk distributor to diversify into broader non- alcoholic beverages, while pie manufacturer Patties Food diversified into health food by purchasing Fitness Outcomes.
DEFENSIVE
Acquiring a competitive threat can strengthen the buyer’s position in a market.
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acquisitive focus on product and brand innovation, particularly in plant-based food products, healthy snack foods, ready to eat meals, and even high quality “human grade” pet food.
The buyers can be broken down into four main cohorts.
1LARGE FOOD AND BEVERAGE BUSINESSES They could be Australian owned or subsidiaries of overseas businesses. With the primary goal to grow shareholder value, these companies are constantly looking to innovate and extend. Their main buying motives are:
INTELLECTUAL PROPERTY
Purchasing innovative products and brands from existing businesses rather than risking the time, cost, and resources of developing competing products themselves. Recent sale transactions and capital raises in “hot markets” such as plant-based foods and regenerative farming methods bear this out.
www.foodanddrinkbusiness.com.au | July 2022 | Food&Drink business | 9