Private equity in food and beverage – summary
- Private equity is reshaping food and beverage through deals and consolidation
- Despite growth, strategic buyers dominate around 88% of transaction activity
- Higher interest rates and inflation are slowing deals and tightening valuations
- Firms target health-focused brand and ingredients, and carve out opportunities
- Private equity will expand influence but not fully dominate sector
Private equity is tightening its grip on food and beverage, driving change through strategic investments, acquisitions and operational overhauls.
Firms are targeting everything from emerging challenger brands to established legacy companies, attracted by steady consumer demand, strong cash flow potential and opportunities for value creation.
And their influence extends beyond capital injection alone – private equity investors are driving consolidation, accelerating international expansion, and pushing for efficiency gains, digitalisation, and portfolio optimisation across the industry.
What’s more, shorter investment timeframes can intensify pressure for rapid growth and profitability, influencing product strategies, pricing and innovation pipelines. This can create tension between short-term performance targets and longer-term brand building, sustainability investment and product development priorities.
As a result, private equity is not only changing ownership structures but also actively shaping how food and beverage companies compete, scale and respond to evolving consumer trends.
“Over the past five to 10 years, private equity has become increasingly active across food and beverage sectors, evolving from broad consumer-focused buyouts to more targeted investments in specialty brands, ingredient platforms and corporate divestitures,” says Shivya Puri, senior research analyst at market intelligence firm Mordor Intelligence. “Recent examples include the approximately $4.3bn (€3.7bn) acquisition of IFF’s Food Ingredients business by CVC Capital Partners in May 2026, illustrating how sponsors are increasingly acquiring non-core assets being sold by large food and ingredient companies.”
So is private equity’s influence on food and beverage becoming too powerful?
Private equity in food and beverage
While its strength and influence might be growing, private equity accounts for far less M&A in food and beverage than strategic buyers, says Mordor Intelligence’s Puri.
In fact, a recent food & beverage M&A report by CLA Meridian Capital shows strategic buyers account for around 88% of transaction activity, including private equity-backed companies.
Added to this, private equity is facing several headwinds that are slowing its momentum in the industry.
Interest rates, says Puri, remain a significant factor in private equity activity. Although financing conditions have improved, borrowing costs remain well above pre-2022 levels in the US and Europe.
As a result, private equity firms are prioritising food and beverage businesses with stable cash flows, strong margins and clear opportunities for operational improvement, while applying more rigorous due diligence and underwriting standards.
“Inflation and consumer affordability pressures are also reshaping investment priorities,” says Puri. “While global inflation has moderated from 2022 highs, it’s expected to remain around 3% in 2026, according to the IMF World Economic Outlook and the OECD Economic Outlook, which will keep pressure on food input costs and consumer spending.”
At the same time, valuation gaps persist as sellers continue to seek multiples based on stronger pre-2022 market conditions, while buyers apply more conservative assumptions reflecting higher financing costs. This, says Puri, has contributed to longer deal timelines and increased use of earn-outs and retained-equity structures.
These more complex structures also reflect the need to balance risk between buyers and sellers in a more uncertain economic environment.
The upside of private equity
One of the biggest themes in Big Food over the past year has been portfolio simplification.
“Large corporations are increasingly divesting slower-growth or non-core businesses to focus capital and management resources on categories with stronger long-term growth potential, including health and wellness, nutrition, specialty ingredients and premium products,” says Puri.
And private equity is helping them do it.
“Private equity firms have emerged as preferred buyers because they’re often willing to acquire standalone brands that require focused management attention, operational improvements or repositioning,” she says.
General Mills, for example, recently sold its Muir Glen organic tomato brand to Violet Foods, backed by Amphora Equity Partners, and Nestlé sold Blue Bottle Coffee to Centurium Capital.
Most attractive sectors for private equity
“Health and wellness remains the most attractive investment theme across the food and beverage sector,” says Puri.
Consumer demand is increasingly focused on nutrition, ingredient transparency, functional benefits, protein content and preventive health.
In July 2025, Butterfly-backed Generous Brands acquired Health-Ade, a leading kombucha brand focused on gut health, in a transaction valued at around $500m. The deal expanded Butterfly’s portfolio of health-oriented beverage brands and demonstrated continued private equity interest in functional products.
Beyond consumer brands, private equity firms are increasingly targeting ingredient platforms that support health and wellness innovation. In September 2025, Apheon acquired Cain Food Industries and merged it with portfolio company Millbio to create a larger platform focused on clean-label bakery ingredients, natural preservation systems and functional food solutions.
Private equity’s future in food and beverage
Private equity, says Puri, will continue to expand its influence in food and beverage, particularly through carve-outs, specialty brands and growth-oriented platforms.
“Large food companies continue to face pressure to improve growth rates, optimise portfolios and focus on core competencies, which is expected to create a steady pipeline of divestiture opportunities,” she explains. “Private equity firms possess both the capital and operational expertise needed to reposition these assets and unlock value.”
Though she expects strategic buyers to remain the dominant acquirers of large-scale food assets as they “can generate synergies unavailable to financial buyers”.
The most likely outcome, she says, is not a private equity-led takeover of the sector but a more balanced ecosystem in which strategic acquirers drive major consolidation, while private equity firms increasingly serve as “portfolio transformation specialists, acquiring, improving and repositioning assets” before returning them to the market through strategic exits or public offerings.
However, questions remain over whether this model prioritises financial returns over longer-term resilience, including investment in sustainability, supply chains and workforce stability.
