Industry Update: Food Manufacturing

By: Edward Hamilton | Dan Peterson | Larry Van Kirk

VRC is proud to release its latest Industry Report, which includes a concise, insightful update on the Food Manufacturing industry including recent transactions, market multiples, company performance and purchase price allocation percentages.

Read the full report: Food Manufacturing: March 2019

March 2019 Industry Highlights

  • One of the more surprising developments in the food industry has been Kraft Heinz’s $15 billion impairment of some of its key brands, a dividend cut of 30%, and an inquiry into its procurement by the SEC. Brands including Kraft and Oscar Mayer saw their goodwill value reduced, which only added more pressure to the packaged-food giant after disappointing fourth-quarter earnings.
  • As consumers’ tastes and expectations advance over time so too will the variety of brands and products offered by leading manufacturers. This is evident among transactions including Flower Food’s acquisition of gluten-free baking company Canyon for $205 million, and Mondelez’s acquisition of high-quality Tate’s Bake Shop for $528 million.
  • Compared to previous updates our most recent PPA analysis points to a modest increase in goodwill and brand-related allocations, 43% and 28% respectively. Customer-related allocation has remained near expected levels of around 10%.

Past Industry Updates:

Food Manufacturing: July 2017