Evolving consumer preferences and rapid technological change are transforming the food supply chain, according to the “Consumer Insider,” an industry report released by Brown Gibbons Lang & Co. (BGL), Cleveland, Ohio. In fact, food distributors are refining offerings to capture on-trend products and capitalize on changing market dynamics, thus accelerating acquisition-driven growth.
Changing demographics, rising disposable income and the pursuit of healthy living are reshaping consumer demand for specialty, better-for-you and sustainable food options. Purchasing behavior is favoring premiumization and authenticity over cost, and more consumers are spending on food outside the home. Technology and e-commerce are blurring traditional channels, fueling growth in new delivery methods. Food distributors are also broadening portfolios in line with these consumer shifts.
Corporate buyers are hungry, with marquee acquisitions setting the stage for continued consolidation. Serial acquirers are aggressively seeking acquisitions to broaden specialty offerings, build private brand portfolios, gain access to independent restaurants and retailers and expand geographic reach.
Private equity funds are equally active. Industry fragmentation is conducive to acquisitive growth, with sponsors looking to create consolidation platforms on a regional and national scale.