What's Happening?
The food ingredients sector is experiencing a record year for mergers and acquisitions (M&A), with 40 deals recorded so far in 2025. The total value of these deals has already surpassed the previous year's total, with most transactions falling in the €10-50 million range. Cross-border M&A accounts for over 65% of the deals, driven by the desire for geographical diversification, innovative assets, and sustainable operations. The sector is fragmented, with large players alongside smaller, specialized companies. Private equity plays a significant role, contributing to over two-fifths of the total deal output since 2020. Fast-growing ingredients include protein, cultures, and botanicals, expanding at rates of over 7% annually.
Why It's Important?
The surge in M&A activity in the food ingredients sector reflects the industry's dynamic landscape and the growing demand for innovative and sustainable products. The focus on geographical diversification and sustainable operations indicates a shift towards more environmentally conscious business practices. The involvement of private equity highlights the sector's attractiveness to investors seeking growth opportunities. The rapid expansion of certain ingredients, such as protein and botanicals, underscores the increasing consumer interest in health and nutrition, driving innovation and competition within the industry.
