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For most of the last decade, the food and beverage buyout playbook was simple. Buy a decent brand, hold it while cheap money lifted valuations, and sell later at a fatter multiple. The business barely had to change. That zero-interest-rate policy era is over.
With the cheap money gone, sponsors are finding new ways to create equity value.
Between 2013 and 2018, multiple expansion drove about 58% of buyout equity gains, according to SPI by StepStone data. For deals struck from 2021 to 2025, that figure is down to roughly 16%. Entry prices hit 12.5x EBITDA in 2021, and no higher exit multiple waits on the other side. Future returns must come from improving the business, mostly by growing revenue.
Sponsors are buying assets that can drive top-line growth, and Q2’s two largest deals were both in the ingredient and manufacturing layers. CVC Capital Partners agreed to a $3.45 billion secondary buyout of IRCA, the Italian bakery and confectionery ingredients business, and Europastry picked up US-based Highland Baking Company for about $810 million.
Ingredient makers fit that model neatly. When a brand wants to cut sugar, drop a synthetic dye, or put a clean-label claim on the pack, it usually can’t make the new input itself. So it buys it.
The supplier that owns the enzyme, the natural color, or the functional blend gets paid, and it can sell that same claim to a dozen brands chasing the same health-and-wellness demand. The result is recurring, higher-margin revenue and a deeper bench of potential buyers than any single brand. That second point is why these platforms trade so easily from one sponsor to the next.
Public food companies are reshaping portfolios and shedding assets, from Keurig Dr Pepper’s planned beverage-and-coffee split to simplification at Conagra and Hormel. We will be watching whether that carveout supply pushes more ingredient-layer platforms to market over the next two quarters.
Download our Q2 2026 Food & Beverage CPG Report for more insights and outlooks on the sector. |
