According to new research from multinational law firm Pinsent Masons, the number of M&A deals in the UK food and drink sector jumped 18% year on year to 78.
This increase is primarily driven by growing interest in fast-growing lifestyle and functional brands from larger food groups and private equity investors.
Recent major deals in the space include Danone’s acquisition of plant-based supplement and meal replacement brand Huel, as well as Müller’s purchase of kefir brand Biotiful Gut Health and healthy snack brand Graze.
The research also revealed that disclosed deal values rose 25% to £5.5 billion, up from £4.4 billion the previous year.
Private equity firms backed 16 deals, representing 20% of transactions, compared with 18 deals, or 27% of transactions, the previous year.
These figures highlight the rapidly growing interest in health-focused and functional food brands, reflecting increasing health consciousness among UK consumers.
This growth has been primarily driven by younger generations, according to Pinsent Masons, whose figures indicate that around two-thirds of Gen Z and millennial consumers purchased functional nutrition products in the last year.
Tom Leman, head of retail and consumer at Pinsent Masons, says: “Recent transactions show that buyers are prioritising existing scale and resilience.
“Whether through significant deals that consolidate global platforms, or targeted acquisitions that extend into adjacent categories, activity is increasingly trending toward building portfolios that can absorb volatility and respond quickly as consumer preferences shift.”
He continued: “Large groups are increasingly using M&A to blur traditional category lines, bringing food, beverage, snacking and wellness propositions together into portfolios that can flex in response to consumer demand. Acquiring established brands with loyal customer bases allows buyers to pivot faster as consumer preferences shift.”
