In the last few years, multinational food giants and traditional meat companies have struggled to keep up with the growing number of consumers opting for a healthier and plant-based lifestyle. Consequently, these food processing companies are leaning towards adding plant-based products to their product portfolio. According to ConsumerIntel360, growth in the alternative protein sector is expected to results in several mergers and acquisitions between the established food processing companies and new age plant-based startups in the short to medium term.
Even though 2020 marked the biggest to date year for the plant protein industry, the alternative protein segment still lags behind the conventional meat and dairy industry. However, the global retail sales of plant protein alternative meat hit a record high in 2020. The industry recorded figures of US$4.2 billion as compared to US$3.4 billion a year before. Moreover, the industry raised more money in 2020 as compared to the past years.
Traditional meat companies acquiring plant-based brands to expand presence in the fast-growing segment
In April 2021, JBS SA announced the acquisition of Dutch-based Vivera BV, a plant protein brand. The acquisition of Vivera is part of the company’s expansion strategy in one of the fastest-growing segments. In a deal valuing at US$408 million, JBS SA will expand its plant-based product offering in 25 European countries. With three facilities and a research center in Europe, JBS SA will also have its own plant-based production line once the acquisition is completed. Thus, allowing the company to boost its presence in the meatless space in Europe.
Being the third-largest alternative protein producer in Europe, Vivera has a portfolio of 50 plant-based food items and overall revenue of 80 million euros. With the plant-based industry expected to reach US$290 billion by 2035, this acquisition of Vivera will add a lot of strategic value to JBS SA.
The meat producer has a sizeable footprint in the United States where the sales of its plant-based products rose 300% last year. Moreover, it also dominating the plant-based burger market in Brazil with a 57% market share. With the Western Europe plant-based meat market valued at US$1.8 billion, this acquisition of Vivera will now allow the company to expand its footprint in the European market where the industry is growing very rapidly.
Plant-based dairy market is attracting more mergers and acquisitions
Plant-based dairy alternatives are one of the fastest-growing sectors in the plant protein industry. In the United States, four in every 10 adults is regularly consuming plant-based dairy alternatives in their diet. With this trend only expected to increase going forward, traditional dairy companies are looking to expand their footprints in the plant-based segment to meet the changing consumer demands by acquiring plant protein dairy brands.
In May 2021, Saputo, the Canadian dairy giant, announced the acquisition of Scottish firm, Bute Island Foods, the manufacturer of vegan cheese brand Sheese. ConsumerIntel360 expects the dairy market to double at US$4.5 billion by 2025 from its current valuation of US$2.7 billion. With the vegan cheese market set to become the fastest-growing segment, this acquisition will help the Canadian dairy giant accelerate its growth globally.
In a similar deal, Organic Garage announced the acquisition of plant-based cheese brand, Future of Cheese Company Corp. The acquisition announced in February 2021, aims to boost growth for both companies. The Ontario-based company, Future of Cheese Company Corp, is engaged in the development, manufacturing, and marketing of high-quality plant protein products. Therefore, this acquisition by Organic Garage will help the plant-based brand to use the distribution channels of Organic Garage for getting their products out in the market.
Food processing companies are strengthening their plant-based portfolio through mergers and acquisitions
Major food processing companies are also expected to follow the trend and acquire plant-based brands to ramp up their sales in the growing industry.
In February 2021, Danone acquired Follow Your Heart, a plant protein brand based in Los Angeles, California. This acquisition from the global, multinational food giant is expected to help the company in reaching its ambitious goal of plant-based sales of US$4.5 billion by 2025. With almost all food majors such as Unilever and Nestle keen to boost their sales in the plant-based segment, this acquisition of Follow Your Heart will help Danone to accelerate its plant-based segment growth globally.
Merger and acquisition in the plant-based ready-to-eat category is rising
The plant-based ready-to-eat category is a new and under-explored segment. According to ConsumerIntel360, it is expected that more mergers and acquisitions are likely to take place in this category as big brands continue to strengthen their portfolio of alternative protein products in the next quarters.
For instance, in January 2021, Canadian plant protein brand Modern Meat acquired plant-based soup startup Kitskitchen. With a forecasted revenue of CAD 950,000 for 2021, Kitskitchen has a strong portfolio of ready-to-eat soup. Whole Foods and Fresh Street Market are some of the retailers where its product line is available for consumers.
Merger and acquisition to integrate other brands into existing distribution channels for driving growth and sales globally
Established plant-based companies are acquiring upcoming alternative protein brands to integrate their products into their existing distribution channels to garner higher market share. With an increasing number of new and innovative startups coming up in the alternative protein segment, ConsumerIntel360 expects the trend to continue over the next few years.
In January 2021, The Very Good Company, a Canadian plant protein brand, acquired vegan cheese startup, The Cultured Nut. Through this acquisition, the Very Good Company is also making its first moves in the plant-based dairy sector which is among the fastest-growing sector in the alternative protein industry. However, the plant-based brand is also aiming to integrate the Cultured Nut brand into its existing distribution network for scaling the operations globally and therefore, driving growth and sales for the company.
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