Food, beverage and agribusiness M&A set for an even stronger year

Fewer, but bigger, deals in FY24 7 min read

Despite economic headwinds and geopolitical challenges, 2024 remained a strong year for investment in the food, beverage and agribusiness sector, with a significant rise in deal value offsetting a drop in deal volume. This Insight explores the key M&A trends shaping this sector, including resilient investment in core consumer products, continued interest from private equity investors, growing public market activity and the increasing role of environmental, social and governance (ESG) related matters in driving future opportunities.

Key takeaways

• M&A activity in the food, beverage and agribusiness sector dropped 36% in FY24, but deal values rose 13%, as investors zeroed in on high-value, strategic acquisitions, in part due to continued interest in the sector from financial sponsors and private equity.
• Public market activity in this sector continues to be an attractive option for businesses and investors, with standout deals such as the Guzman y Gomez (GYG) IPO signalling investor optimism.
• Full-service restaurants, especially pubs, remain investor favourites, driven by resilient consumer spending and steady gaming revenues.
• Australia’s new Sustainable Finance Taxonomy is set to drive green investment in agriculture, with ESG factors a continued focus for dealmakers.

Who in your organisation needs to know about this?

Legal counsel; ESG and governance teams; Strategic management.

A resilient 2024 for the food, beverage and agribusiness sector

M&A activity in FY24 faced notable headwinds, with a 13% decline in the overall number of deals across Australia, and a sharper 36% drop in the food and beverage sector, compared with FY23.¹

Ongoing geopolitical tensions, inflation and persistently high interest rates for much of the financial year created an uncertain trading and funding environment, dampening deal flow. These factors contributed to a more cautious investor approach and lack of appetite for smaller or mid-market deals. However, despite these hurdles, there was still significant appetite for high-value transactions. Total deal value across all sectors in Australia rose by 31%, and within the food, beverage and agribusiness sector, deal value increased by 13%. This shift highlights a focus on large, strategic, long-term acquisitions that promise sustainable growth. This trend is illustrated by high-profile deals such as the $2.5b Costa Group take-private by a consortium lead by Paine Schwartz Partners, KKR's disposal of Australian Venue Co. and a consortium of international institutional investors' acquisition of Accolade Wines. 

These deals also demonstrate the continued interest in this sector from financial sponsors and private equity firms. Another deal highlighting this trend was Macquarie Asset Management's recent acquisition of a controlling stake in Fresh Produce Group, one of Australia’s largest fresh produce providers, for a reported $175 million.

Despite the slowdown in the number of overall deals within the sector, it’s encouraging to see a broad mix of industries staying on investors’ radars. Long-time favourites such as Aussie-grown seafood (with the Huon and then Tassal transactions in recent years), eggs and alcohol continued to draw foreign interest, but this year also brought big moves in other areas. Pet food stood out as a key growth sector, alongside fresh produce such as fruits and vegetables, sushi and dairy. Livestock and agricultural products also saw solid investment, demonstrating how consumer trends and a push for innovation are shaking up the food, beverage and agribusiness space.

What's trending in the food and beverage sector?

Public market activity continues to ride a wave of momentum

As predicted in our previous Insight, public M&A activity within the food and beverage sector continued to rise in FY24. Headlined by the A$2.5 billion take-private of ASX-listed Costa Group in February, FY24 saw several key public transactions driving activity, including:

• Yumbah Aquaculture Ltd, which manages a diverse portfolio of aquaculture projects, acquiring by way of takeover East 33, Australia’s largest vertically integrated producer, processor and supplier of Sydney rock oysters;
• Elixinol Wellness Limited, a company that specialises in innovating, marketing and selling hemp and other plant-derived nutraceutical, food and topical products, acquiring all the shares in Sustainable Nutrition Group Ltd, a specialist in hemp farming and hemp processing, via scheme of arrangement; and
• Avatar Industries Pty Ltd acquiring approximately 25% of Seafarms Group Limited, an operator of aquaculture seafood production platforms.

The public market's standout transaction in FY24 was the GYG IPO. The Mexican-inspired, made-to-order restaurant listed on the ASX in June, raising approximately $242.5 million. Despite reports that 2024 has seen the lowest number of IPOs since the global financial crisis of 2009, GYG’s debut highlighted strong investor demand and optimism, with its shares surging from the $22 offer price to $30 on the first day of trading, after the GYG CEO pledged to expand into Asia and the US. In December, shares were still trading well, with GYG's share price sitting at around $43 per share.

It remains to be seen if GYG’s strong performance will pave the way for food and beverage companies alike to consider public listings. Duxton Pubs, led by Ed Peter, is reportedly exploring an ASX listing next year, seeking to raise $35 million from investors. Similarly, SPC, the century-old agribusiness group, is aiming to return to the ASX through a reverse takeover of Original Juice Co., potentially reflecting renewed interest in public markets as a viable fundraising option. There has also been recent media speculation about a potential takeover of Retail Food Group, the Australian listed food franchisor behind brands such as Donut King and Gloria Jeans.

Full-service restaurants thrive as pubs attract investors

Pubs keep attracting investor attention, with the full service restaurant sub-sector continuing its popularity this financial year.

The key deal within this sub-sector was leading global investment firm KKR's sale of the hospitality business Australian Venue Co. (AVC) to Asia Pacific-focused alternative investment firm PAG, Allens having advised on the deal. The deal underscores private equity's optimistic outlook on growth in the sub-sector. AVC is PAG's latest venture into the Australian food and beverage landscape, having previously acquired Patties Foods, known for its iconic Four’N Twenty meat pies, from Pacific Equity Partners, and is now speculated to be exploring an exit of Craveable Brands, the owner of the chicken chain Chargrill Charlie’s.

A strong start in FY25 for Australian beer and wine brands

As highlighted in our 2022 Insight, Australian craft beer and wine brands have steadily gained traction, drawing significant interest from both domestic and international investors. FY24 was another strong year for this sub-sector, as headlined by the sales of Black Hops Brewing, Tribe Breweries, Never Never Distillery and Ampersand Projects. FY25 is shaping up to be an even bigger year for this sub-sector, with several high-profile deals already completed or in the works, including:

• Perth’s Nail Brewing and investors acquiring Feral Brewing Co from Coca-Cola Europacific Partners; and
• the Australia-based online wine retailer Just Wines having acquired Beer Cartel Pty Ltd, the local craft beer bottleshop with over 1,100 different craft beers, growler fills, beer club, and tasting events.

Perhaps the biggest deal within the subsector was the decision of Accolade Wines, one of Australia's largest wine producers, to create a more diversified portfolio of brands by agreeing to purchase Pernod Ricard's Australian, New Zealand and Spanish wine businesses (which includes brands such as Jacob's Creek and Stoneleigh) from the consortium backed by Bain Capital Special Situations, ICG, Capital Four, Sona Asset Management and Samuel Terry Asset Management, Allens having advised on the deal. ASX listed Treasury Wine Estates has also kicked off the sale process for its commercial wine portfolio, including well-known brands such as Wolf Blass, Lindeman’s and Yellowglen.

New taxonomy to drive ESG investments in Australian agriculture

Governments, shareholders, regulatory bodies and other stakeholders are increasingly urging Australian businesses to embrace their ESG responsibilities. The Australian Government recently launched Australia's first Sustainable Finance Taxonomy (the Taxonomy). The primary aim of the Taxonomy (at present) is to mobilise private capital towards activities in Australia that can significantly decarbonise the economy and support the transition to net zero emissions by 2050. In particular, the Taxonomy is intended to facilitate sustainable development and boost investment in the agriculture sector (among other sectors).

The Taxonomy provides borrowers, investors and lenders with a framework for identifying environmentally sustainable assets and making investment decisions that align with sustainability goals easier. By establishing common standards for sustainable and transitional finance, it is intended to enhance transparency around sustainability outcomes, helping to combat greenwashing and enabling investors to pinpoint genuine sustainable opportunities.

While the Taxonomy is expected to impact various industries, its focus on agriculture is particularly pronounced, as it aims to promote sustainable farming, lower greenhouse gas emissions and enhance biodiversity. As ESG considerations remain a focus for dealmakers, we expect the Taxonomy to continue driving substantial investment into the food, beverage and agribusiness sector in Australia. For more information, please refer to our Insight.

Looking ahead, with FY25 starting strong and the Australian Government actively pushing investment in agriculture, there is reason to expect renewed momentum in M&A activity—especially if interest rates ease and consumer spending rebounds, opening up more opportunities for strategic growth across the sector.