Heading into 2025, the food and beverage (F&B) industry is set up for a surge in mergers and acquisitions (M&A), and as companies look to consolidate and expand their market presence, the effective use of consumer insights will be a critical factor in achieving successful deals. This is in part due to the notion that in recent years, the F&B industry has seen significant changes in consumer preferences, driven by factors such as health consciousness, sustainability concerns and innovation. These trends have reshaped the F&B landscape, creating both challenges and opportunities for companies striving to adapt to these shifts.
At the same time, M&A strategies within the industry have evolved, reflecting a growing emphasis on integrating consumer-driven values into long-term business goals. Strategic decisions now go beyond traditional financial and profitability assessments to consider how businesses resonate with evolving market demands. Notable M&A events such as PepsiCo’s acquisition of Siete or Danone’s divestiture of Horizon Milk reflect the industry’s pivot toward innovation and brand diversification while aligning with consumer trends. By understanding evolving consumer behaviors and preferences, companies can identify opportunities, mitigate risks and unlock the full potential of their acquisitions.
Using consumer insights to inform M&A strategies
To successfully navigate the complexities of aligning M&A activity with consumer preferences, companies must build a strategy rooted in data-driven insights. This involves identifying key F&B trends that resonate with consumers—such as trending shifts toward health and wellness, sustainability, cultural diversity and convenience—and evaluating how target brands align with them. Companies should analyze customer bases, financials and competitive landscapes, and assess long-term growth potential based on shifting consumer habits. By leveraging data analytics throughout this process, organizations can make informed decisions that not only enhance their portfolios but also position them for sustainable success within the continuously changing marketplace.
What to watch out for in 2025
As companies navigate these evolving consumer demands, nothing is off the table in the quest to stay competitive and relevant—whether divesting brands that no longer align with market preferences or pursuing acquisitions that cater to emerging trends. Going into 2025, the current M&A landscape presents a perfect storm of policy, politics, innovation and decisive consumer insights, presenting a crystal ball vision for companies to make informed acquisition decisions. Health and wellness remain at the forefront of the F&B industry, driven by consumers’ ongoing demand for health-conscious eating and functional foods, and companies are increasingly drawn to independent, boundary-pushing brands to maintain a competitive edge in the space. The rising popularity of probiotic beverages highlights this trend, raising the question of whether companies will acquire existing brands or develop their own offerings. Simultaneously, sustainability remains a key focus, with consumers favoring brands that prioritize eco-friendly practices and sustainable sourcing.
The biggest M&A deals of 2025 won’t just be about market share; they’ll be about market foresight. Looking ahead, M&A activity across the F&B industry will continue to evolve, heavily influenced by shifting consumer preferences. Health-focused brands are expected to lead the way, reflecting an ongoing demand for natural products, while sectors like meat and proteins may face challenges in adapting to these changes. Additionally, political factors, including potential regulatory shifts under a new Food and Drug Administration, could significantly impact consumer behavior. For instance, initiatives aimed at eliminating artificial dyes and aligning ingredient standards more closely with European norms may reshape consumer expectations. As these policies gain traction, they could drive a more mainstream acceptance of clean-label products, further influencing consumer preferences within the industry. Understanding the interplay between politics and consumer insights will be vital for identifying the right targets and making informed M&A decisions moving forward. Overall, consumer insights and trends serve as the lifeline for the future of M&A, emphasizing the importance of understanding what drives consumer behavior in order to identify suitable targets and make strategic decisions in the F&B industry.
