Gary Nield talked about opportunities in foodservice at the recent Canadean Soft Drinks Strategy Congress in Paris. He bought into the Purity Soft Drinks business last year: “Observing the trends driving M&A, these hit an all-time high in 2007 when there were 160 deals averaging just under £1m per deal. We have seen a pattern of a large number of companies buying smaller ones and improving their supply chain.”
He explained that this is the number one driver in the food and beverage sector, with a growth in interest from private equity delivering as much as 20x profit.
“Another growth driver has been online sales,” he said, “particularly for those with a good website (eg Wiggle). I only have to watch my daughter shop in the supermarket today to know that this is the future. She only buys thing when she can scan the data and check the calorie content.
“We are also looking at portfolio refinement. Will Britvic and AG Barr still have all their brands in three years’ time with the current focus on efficiency? Beverage companies will have to be innovative, that’s for sure. Take a look at Wimm-Bill-Dann and Lebedyansky, GSK buying MaxiMuscle and Eckes-Granini buying Pago. It’s definitely the time of David versus Goliath, with small, niche exploitation high on the agenda and chillers controlling impulse sales.”
“In the drinks sector, Europe is a billion-litre marketplace, and we are determined to take our share using augmented reality with Blippar technology.
“Take the UK, where the top five brands have 70% of the impulse sector market – TCCC, Danone, Red Bull, GSK and AG Barr – while small companies such as Fentiman’s and Fever Tree have great potential. Private Equity is looking at this sector with a great deal of interest, and distribution is key to increasing sales. But who in the end benefits? Hopefully the consumer!
“There are certainly lots of people out there with great ideas, which explains the current boom in co-packing.”
At FoodBev Media, we are looking forward to seeing the entrants to this year’s Beverage Innovation Awards at Drinktec – from small, innovative companies to contemporary thinking multinationals, there are bound to be plenty of surprises and some long runners.
You can also read more about Blippar labelling technology in the March issue of Beverage Innovation out in digital and print format next week.
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