Acquisitions among foodservice players is an area to watch for an impact on suppliers.
“Mergers and buyouts in foodservice will continue,” says David Kraus, senior vice president of custom distribution at Produce Alliance, LLC BB #:159218 in Chicago, IL.
“The industry will get smaller and smaller, in foodservice and also convenience. In quick-serve restaurants especially, there will be fewer and fewer independent 300- to 500-unit chains.”
“The trend in the past few years has been consolidation,” says Craig Fields, director of account management for the Northwest at RPE, LLC BB #:105471 in Bancroft, WI.
“I don’t see that going away, especially after the difficult times endured because of Covid. The companies that have weathered the storm seem to be looking to expand.”
Steve Grinstead, CEO of FreshEdge, LLC headquartered in Indianapolis, IN, sees many mergers and acquisitions in the future. “All of the indicators point to strong M&A activity for the next few years.”
He describes several significant factors: “Aging ownership of many companies with no or little succession plan; significant capital on the sidelines needing to be deployed; and far too many competitors in the industry causing them to all cannibalize each other for anyone to grow.”
Last, but not least, he adds, “The table stakes in this space keep going up, making it harder for smaller entities to compete.”
This is an excerpt from the cover story in the July/August 2022 issue of Produce Blueprints Magazine. Click here to read the whole issue.
