Private Equity Investment Trends in Food Companies
Investments in food companies, as a share of the overall private equity investment pie, has moved up and down a bit over time, but tends to hover around 4% of PE deals.
While the absolute number of PE investments in the Food sector has increased over time, this is largely because the private equity industry has grown considerably in recent years (more investors & larger funds). To isolate changes within a specific industry from the growth of the private equity industry as a whole, I looked at investments within an industry as a percentage of the total number of private equity portfolio company investments for each year.
Back in 2004, I was working on middle market M&A deals. At the time, I distinctly remember noticing an increased interest in the food sector by the private equity firms. Interesting that this observation also shows in the historical data… although I remain unsure why.
Also note that the food sector seems largely unaffected by the recession years. In fact, as a percentage of PE deals, the food sector actually increased during this time. Perhaps this is because it tends to be more recession resistant, given that people still need to eat.