"M&A Valuation Guide" 5: Transaction Valuations and Segmental Analysis of the Food & Beverage Industry

Spotlight Cases

• China: In June 2025, Yili Group (600887.SH) announced the acquisition of the remaining equity in regional dairy firm Junlebao, strengthening its foothold in North China’s low-temperature fresh milk market.
• United States: PepsiCo acquired plant-based protein beverage brand Suja Life for $1.9 billion, setting a record for the highest valuation multiple in the segment for the year.
• India: Unilever completed the controlling stake acquisition of local spice brand Eastern Condiments, accelerating its dominance in South Asia’s condiments market.

1. Global M&A Landscape: Regional Divergence in Scale and Valuation

Geographic Dimensions

Strategic Focus

• China: Premiumization & Efficiency Revolution
  M&A priorities target:

1. Healthy Snacks: Low-sugar and functional foods
2. Cold Chain Integration: Prepared meal firms acquiring regional processors
3. Spotlight case: Nongfu Spring acquired frozen food supply chain leader Xianshenghuo at a 3.5x premium multiple.

• India: Foreign Rush on Essential Consumption
  Driven by policy incentives (FDI in food processing now 100% open):

1. Grain & Oil Supply Chains: ABCD majors (Archer Daniels Midland, Bunge, Cargill, Louis Dreyfus) scaling investments
2. Condiments & Instant Foods: Unilever and Nestlé acquiring local brands (e.g., Eastern Condiments)

• United States: Tech-Driven Premiums
  High valuations concentrated in:

1. Food Tech: Lab-grown meat and precision fermentation companies
2. Sustainable Packaging: Ball Corporation (NYSE: BALL) acquired plant-based packaging firm at 4.1x premium multiple.

2. Segment Focus: Deal Activity vs. Valuation Inversion

High-Volume & Low-Multiples Segments: Commoditized Categories in the "Scale Trap"

• Packaged Foods & Meat (73% deal share | Multiples: 0.5x–2.3x)

Overcapacity & Homogenized Competition: Despite frequent M&A among meat giants (e.g., WH Group’s acquisition of Spain’s Argal prepared meat business), industry gross margins averaged <15% in North America (2024).  Expanding capacity eroded pricing power: Shuanghui’s meat product margins fell 2.3 p.p. YoY in 2024.

Cost Squeeze: Global feed costs surged 30% in 2025 + rising cold-chain logistics expenses compressed profits.  EV/Revenue multiples stagnated at 1.8x–2.2x for meat processors.

• Agricultural Products & Services (15% deal share | Multiples: 0.8x–3.9x)

Cyclical Price Volatility Suppresses Valuations: Commodities (sugar, corn) exposed to climate/policy shocks: HongMian Co. reported 21.9% revenue decline in sugar refining (2024), with margins at 2.4%, highlighting sector fragility.

Dairy Consolidation Stalls: Lactalis acquired General Mills’ North American yogurt unit for $2.1B, but at just 1.7x multiple (vs. industry avg. 2.2x) due to underutilized capacity (65% avg. plant utilization).

Low-Volume & Premium-Multiples Segments: Value Breakout of Scarce Assets

• Breweries & Wineries (15% deal share | Multiples: 3.3x–6.9x)

Scarcity Premium of Aged Cellars: Bordeaux Premier Cru estates transacted at 8-10x EV/Revenue.  Pernod Ricard acquired U.S. craft whiskey brand TX at 6.2x multiple (2024), driven by Asia’s expanding collector market (Chinese whiskey collectors grew 35% YoY).

Capitalization of Cultural Symbols: Japanese sake producer Takara Shuzo achieved 200%+ acquisition premium via anime IP collaborations targeting Gen Z.  Century-old European vineyards attracted PE bidding wars for their cultural-tourism integration value.

• Functional Foods (not tracked separately)

Technological Edge in Health Concepts: Electrolyte/probiotic beverage segment grew 18% (vs. industry avg. 5%).  Cinven acquired Swedish functional brand Vitamin Well at 5.8x multiple, valuing its proprietary bacterial strains.

Conclusion

The "volume-valuation inversion" in food & beverage M&A reflects capital’s repricing of growth quality—premium segments build moats through scarcity + asset-light models + pricing power, while commoditized categories must break valuation compression via tech-driven cost reduction or business model innovation. Investors should:

1. Prioritize scarce assets in beverage alcohol and functional beverages;
2. Identify integrators within packaged foods with supply chain reinvention capabilities.

(The data and analysis in this article are for reference only.  Due to selective data screening and limitations in market and data collection, not all transaction scenarios are covered, and there may be incompleteness.  Please exercise caution when using this information for decision-making in critical processes.)