What’s driving the food ingredients M&A surge? A summary
- M&A for food ingredients expected to break records this year, with 40 deals recorded so far
- The deals’ total value already exceeds that of 2024
- Most deals fall between the €10–50m range, rather than under €10m
- Cross-border M&A makes up more than 65% of transactions
- Protein, cultures and botanicals are growing over 7% annually
This year is expected to be a record one for M&A deals in the European food ingredients sector.
With 40 deals so far, 2025 is on track to beat existing records, according to a new report by Oghma Partners, a UK financial advisor.
Record number of deals
Since 2019, the European food ingredients sector has recorded 305 M&A transactions, collectively worth €87.3bn.
The value of 2025’s M&A deals to date is €3.87bn, already exceeding the total value of 2024’s deals.
While in terms of value, it is far outdone by 2019 (which included the merger between IFF and Dupont’s Nutrition and Biosciences business) and 2023 (which included both the Novozymes and Chr. Hansen merger and the DSM and Feremich merger), in terms of number of deals it is expected to break records.
Unlike in the previous three years, where the largest category of deals were those under €10m, in 2025 more deals hit the €10-50m range.
Most deals are driven by the desire for geographical diversification, innovative assets and sustainable operations, Oghma Partners’ report suggests.
Deal activity is still resolutely international as well, with cross-border M&A accounting for more than 65% of transactions. The most attractive geographies for deals include Spain, France and the UK.
The market for M&A is fragmented, dominated by larger players worth at least €50bn. These exist alongside specialised ingredients companies, often worth less than €30m.
This creates “a dynamic landscape where smaller innovators and start-ups are winning market share with sustainable and differentiated offerings,“ says Mark Lynch, partner at Oghma Partners.
Private equity is a key player within food ingredients M&A as well, making up more than two-fifths of the total deal output since 2020.
While the majority of reported acquisitions took place in Western Europe, growth is expected to increase in Portugal, Turkey and the Nordics going forward.
Turkey is expected to have the highest growth in volume between now and 2029, at more than 23%.
Fastest growing ingredients
The trends that are driving the ingredients sector are, in part, classic ones, such as health, clean-label, sensory experience and sustainability.
However, other trends are also playing a key role. For example, the demand for dual-functional ingredients – ingredients that provide both sensory qualities and practical functions – is significant.
Demand is also increasing for alternatives to ingredients being hit by climatic pressures and geopolitical instability. And it’s not just coffee and cocoa. For example, the supply of gum Arabic has been hit by the civil war in Sudan, forcing manufacturers to look for alternatives.
While the Western European ingredients market is growing at an annual rate of 1%, some sectors are outpacing it significantly.
Protein, for example, is expanding at a rate of more than 8%, with botanicals and cultures at more than 7%
Additives, blends and distribution have been the most active subcategories of ingredients.
Distribution made up a fifth of deal volume since 2019, followed by additives at 15%, then blends at 10%.
In many areas, but in these especially, the growth of food ingredients continues to go strong.
