Study reveals growth in craft meats
The craft meats concept attracts investor interest in line with favorable demand trends.
The protein industry is experiencing extra "bite," as the concept of "craft meats" takes hold, according to the Consumer & Retail Insider, an industry report released by Brown Gibbons Lang & Co. (BGL), Chicago.
Macro trends of population growth and rising disposable income have contributed to an increase in meat consumption. Rising demand, coupled with healthy living trends and a craving for all things natural and organic, are refining palates for artisan meats. As quality, authenticity and transparency gain increasing appeal among today's discriminating consumers, changing food preferences are taking niche protein markets mainstream.
The craft meats concept attracts investor interest in line with favorable demand trends, illustrated by recent transaction activity in the space:
- Natural and grass-fed beef producers have been acquisition targets. In fact, the grass-fed beef market has sustained double-digit growth with rising demand projected to propel market penetration.
- Hormel Foods set its sights on charcuterie-style meats with the $850 million acquisition of Columbus Manufacturing, paying a premium valuation at approximately 13-15 times projected 2018 EBITDA, including synergies. The deal marks the largest in Hormel's history. Artisan cured meats have been cited as a thriving niche market and appealing to today's Millennial "foodie" culture.
- Direct-to-consumer platforms in craft meats are attracting investor capital. The growing e-commerce startup sector pledges quality and transparency, delivering premium grass-fed beef from farm to fork through innovative crowd-sourcing models.