Mergers and Acquisitions in 2025: Trends Driving the Latest Deals

Food and beverage M&A activity is gearing up for a busy year in 2025 after a quieter 2024. Geoff Coltman, an expert at Catena Solutions, a food and beverage consulting firm, predicts a surge in acquisition activity driven by regulatory changes, economic relaxation, and a focus on snapping up innovative brands.

With a new administration in office, companies in the food and beverage industry are expected to be on the lookout for strategic acquisitions. Political shifts, like expected regulatory leniency and potential interest rate drops, are creating a favorable environment for deals to happen.

One trend to watch is the interest of larger companies in acquiring smaller, niche brands with unique products. For example, PepsiCo’s recent acquisition of Siete Foods for $1.2 billion highlights the value that innovative brands can bring to industry giants. Smaller brands may not prioritize profitability, but they offer larger companies an entry into new customer segments and product categories.

In the coming year, we can expect companies to focus on their “SKU heroes” – the products that bring in the most revenue and profit. This means we may see companies shedding products that don’t align with their core strategy. For instance, Unilever’s decision to spin off its underperforming ice cream business is a strategic move to streamline its portfolio.

As the year unfolds, we may see more strategic moves like this as companies reassess their portfolios to better align with their goals. For example, Mondelēz International’s unsuccessful attempt to acquire The Hershey Company could lead to potential shifts in the industry. While Mondelēz is known for its global snack brands, Hershey’s focus on chocolate could present an opportunity for collaboration or acquisition.

Food safety will also be a crucial factor in the success of M&A activity. Ensuring that quality standards are met and maintained during acquisitions is key to preserving the value of acquired brands. As companies integrate new acquisitions, they must pay close attention to ingredient sourcing, product quality, and consumer preferences to avoid any missteps.

In summary, the food and beverage industry is gearing up for an exciting year of mergers and acquisitions fueled by a combination of political, economic, and strategic factors. Keeping an eye on industry trends and staying nimble in response to market shifts will be key for companies looking to thrive in this dynamic landscape.