1. From a Global Perspective
The global landscape of the Food, Consumer Packaged Goods (CPG), and Technology sectors is undergoing significant transformation. These industries are increasingly interdependent, impacted by various global factors such as demographic shifts, political changes, environmental concerns, technological advancements, and cultural dynamics. Executives in these sectors are facing increased stress due to challenges like record inflation, supply chain issues, labor shortages, and potential recessions【19†source】.
To stay ahead, leading companies are focusing on five key areas: embracing changing consumer behaviors, competing for market share, transforming creatively, implementing data-driven supply chains, and prioritizing Environmental, Social, and Governance (ESG) factors【20†source】. This approach, based on a Deloitte survey of 150 consumer products executives, highlights the shift towards a more dynamic and responsive industry framework【21†source】.
2. From an Investor Perspective
Investment trends in these sectors for 2023 are shaped by several themes: synthetic biology, healthier options, sustainability, and digitalization【27†source】. Investors are particularly interested in healthier foods, precision fermentation, and sustainable production. For instance, Rich Product Ventures focuses on early-stage food startups that specialize in nutrition and sustainability, while Novozymes Investments is exploring synthetic biology-based technologies and precision fermentation-based innovation【28†source】.
However, the global economic slowdown poses significant risks to these investments. The International Monetary Fund's prediction of a global growth decline to 2.7% in 2023 impacts the flow of capital into companies, especially startups with large upfront setup costs. This situation makes raising follow-on funding challenging, and may affect early-stage companies if existing portfolio companies consume significant capital【29†source】.
3. From Future M&A and Venture Deals Perspective
The future of Mergers and Acquisitions (M&A) and venture deals in these sectors is leaning towards alternative deals such as partnerships and corporate venture capital (CVC). A survey by Bain & Company found that most consumer goods companies expect an increase or maintenance of the current level of deals, including alternative deals, over the next three years【35†source】.
Companies are increasingly eschewing traditional scale M&A for alternative deals due to a strict antitrust environment. For example, Kraft Foods has partnered with food tech startup NotCo for plant-based products, and AB InBev has created the BEES platform for e-commerce and distribution【36†source】. These alternative deals allow companies to explore a broad range of growth options without major investments, mitigating risks inherent in traditional scale M&A【37†source】.
Large consumer goods companies are also turning to CVC to address digital disruption, e-commerce evolution, and fast-changing consumer trends, such as in health and wellness【38†source】. However, nearly 40% of such partnerships and CVC investments underperform, indicating the need for companies to adapt their M&A strategies, ensure clear mandates for partnerships and CVC teams, and develop the necessary corporate culture and skills for these complex deals【39†source】.
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In conclusion, the interplay between the Food, CPG, and Tech sectors is characterized by an evolving global landscape, shifting investment priorities, and a trend towards alternative M&A and venture deals. Companies and investors navigating these sectors must adapt to changing consumer behaviors, economic challenges, and the complexities of new deal structures to stay competitive and successful.
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