november 2019 sector snapshot - clairfield international · while other consumer sectors are taking...
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INSIDE: Market highlights · Deal volumes · Key players · About Clairfield
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FOODSERVICE
November 2019 sector snapshot
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FOODSERVICE SNAPSHOT JULY 2019
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ALBERT SCHANDERSECTOR HEAD
2019 summary
Foodservice, defined as the industry serving food outside the home, as well as theservice providers – food wholesalers, logistics providers and the like – that cater tothese establishments, is a thriving sector everywhere in the world even while beingaffected by major worldwide trends including digitalization. While other consumersectors are taking a beating from the Amazon model and other consumer trends,the foodservice market is growing at a healthy clip worldwide.
The consumer foodservice market grew 4.2% in value from 2017-2018 and isforecasted to grow another 3.2% in 2019. The most rapid growth in the foodservicemarket is seen in Asia Pacific, while the US, Canadian, and European markets areexperiencing more measured but steady growth.
Restaurant sales have grown steadily over the past nine years, benefitting fromworldwide economic growth, the decline in wholesale food prices, and the increasein tourism. Rising labor costs are a risk, but these can be addressed together withthe challenge of digitalization. As technology continues to be integrated witheveryday tasks, restaurants have started to leverage it in order to maintain or evenincrease sales. Digital menus and variable pricing are restaurant features thatresonate with consumers. Digital ordering now accounts for 6.9% of all consumerfoodservice sales.
WHAT’S NEW IN THE FOODSERVICE SECTOR
M&A highlights
Deal activity remains strong in 2019 and most deals continue to be driven bystrategic buyers.
In Q1 2019, global food service deals were valued at EUR 110 million.
The success of the franchisee model for quick-service restaurants have primedthe industry for M&A, as target companies are easy to integrate.
Large companies such as Yum! Brands and McDonald's have shown thatsynergies exist and can help long-term growth.
Generally, larger chains are most prevalent in M&A deals but smallercompanies are starting to think strategically in order to increase efficiency andput their footprint on the map.
Source: Passport; Consumer Foodservice Industry
GARY ECOBSECTOR HEAD
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FOODSERVICE SNAPSHOT JULY 2019
3Source: The Business Research Company; Just-Food.com
KEY MARKET TRENDS
Customization is a staple in many successful foodservice companies. Theidea of making something on your own appeals to consumers since theyare creating their ideal dish. The increase in dietary restrictions andhealth-conscious consumers only reinforces the value of being able tocustomize food choices.
Accessibility and convenience are driving factors in the foodserviceindustry. Consumers demand ways to receive food other than thetraditional restaurant method. The efficient nature and high popularity ofdelivery services will cause some restaurants to evolve into “cloudkitchens” with no physical access for customers. This will reducenecessary space, overhead costs, and create a more efficient businessmodel using more technology and less labor.
Blockchain Technology is being increasingly used to improve logistics. Thetechnology’s ability to trace products in less than three seconds helpsprotect companies from risks associated with recalls which can cost closeto €9 million.
Healthy and conscious dining have been huge trends and will only becomemore important. Healthy options are now available at most restaurantsand even at fast-food chains. Consumers are willing to pay a premium forhigher quality food. Plant-based food is becoming mainstream as peoplebecome more environmentally aware. Meat production is expected togrow by around 1% but diets consisting of large quantities of meat arestarting to decline. This trends encompasses not only human health butalso the sustainability and well-being of the planet.
Transparency is a huge issue in the foodservice industry, as companies areconstantly scrutinized about their practices and food processing.Consumers and the entire supply chain demand improved quality ofproducts and that companies reduce waste, plastic use, and disposableitems. Eventually, businesses will move towards zero waste practices dueto the looming concern of sustainability and climate change.
Touchscreen ordering kiosks, mobile apps for custom ordering andpayment, and digital entertainment, are the top digitalization trends.
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FOODSERVICE SNAPSHOT JULY 2019
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FOODSERVICE IN NUMBERS
Market trends
MARKET DRIVERHealthy food & digital services
MARKET CHALLENGE
Client expectations & labor shortages
257Number of worldwide deals
made in the food service industry in H1 2019
Leading Players
Source: Factset; Just-food industry report; The Business Research Company Global Outlook 2019
€ 2.9 TrillionIn market value in 2018 for consumer foodservice
Asia Pacific
North America
Europe
Largest foodservice markets
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FOODSERVICE SNAPSHOT JULY 2019
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FOODSERVICE MERGERS & ACQUISITIONS
Strategic78%
Financial22%
M&A deals in foodservice worldwide (March 2018 – March 2019)
€ 0.57bn€ 0.89bn
€ 1.87bn
€ 0.1bn € 0.18bn
€ 5.48bn
€ 0.52bn
€ 1.82bn
€ 1.42bn
€ 3.9bn
€ 1.06bn
€ 0.09bn€ 0.11bn
€ .000
€ 1.000
€ 2.000
€ 3.000
€ 4.000
€ 5.000
€ 6.000
0
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3
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5
6
7
deal volume deal value
Note: Comprises M&A deals in the foodservice industry based on verdict foodservice classification; Not all companies disclose a deal value;Up to Q1 2019.
Deals by acquiror type
Source: Clairfield Analysis of GlobalData; Note: not all deals include public deal values.
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FOODSERVICE SNAPSHOT JULY 2019
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Selected recent M&A deals in foodservice & valuation multiples
Source: Clairfield analysis of Factset data; “DV” = Deal Value; Note: not all deals include public deal values.
Announ. Date Target Target
country Acquiror Acquirorcountry DV (EUR m) Revenue Multiple EBITDA Multiple
06/2019 Del Frisco’s Restaurant Group, Inc. US Catterton Management Co. LLC US 728 0.7x 35.9x
06/2019 METRO AG DE Metro AG/Private Group DE 8,386 0.2x 56.2x
06/2019 Red Robin Gourmet Burgers, Inc. US Vintage Capital Management LLC US 1,038 0.4x 10.6x
04/2019 Papa Murphy’s Holdings, Inc. US Papa Murphy’s Holdings, Inc. US 175 0.9x 9.8x
03/2019 CEC Entertainment, Inc. US Leo Holdings Corp. UK 1,302 0.5x 8.6x
03/2019 AmRest Holdings SE ES Fcapital Dutch BV NL 310 1.9x 21.7x
03/2019 Areas Restauration Services SAS FR PAI Partners SAS ES 1,542 0.9x 7.7x
03/2019 Wessanen NV NL PAI Partners SAS ES 702 1.3x 13.5x
03/2019 Postifruits SASU FR Orsero SpA IT 7.9 18.6x 16.6x
11/2018 Kotipizza Group Oyj FI Orkla ASA NO 156 1.5x 11.8x
09/2018 Sonic Corp. US Roark Capital Group US 1,878 3.7x 15.8x
08/2018 Zoe’s Kitchen, Inc. US The Invus Group LLC US 259 0.8x 14.0x
08/2018 Jamba, Inc. US Roark Capital Group, Inc. US 167 2.6x 167.0x
06/2018 Bev.Con ApS DK Royal Unibrew A/S DK 47 1.8x 11.3x
06/2018 Pinnacle Foods, Inc. US Conagra Brands, Inc. US 9,236 2.6x 15.9x
05/2018 Pamapol SA PL Amerykanka Struktura Sp. zo. o. ska PL 2.3 0.1x 8.9x
05/2018 Barteca Holdings LLC US Del Frisco’s Restaurant Group, Inc. US 272 2.5x 16.3x
01/2018 Hugli Holding AG CH Bell Food AG CH 30.9 0.2x 3.6x
Mean 1,458 2.27x 24.7x
Median 291 1.1x 13.8x
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GERMANY
FOODSERVICE
acquired
ITALY
FOODSERVICE
acquired a majority stake of
ITALY
QUICK-SERVICE RESTAURANTS
was sold to
FRANCE
FRANCHISED RESTAURANTS
NORWAY
CAFÉ CHAIN
was sold to was sold to
FRANCE
UNIQUE DINING
SWEDEN
OFFICE COFFEE SOLUTIONS
NETHERLANDS
EVENT CATERER
was sold to
RECENT FOODSERVICE TRANSACTIONSFOODSERVICEDEAL SPOTLIGHT
Richard Wellock & Sons Ltd supplies high-qualityfruit, vegetables, dairy, meat and dry ingredients toa UK customer base of Michelin-star restaurants,premium casual dining chains, 5* hotels andpremier league football clubs. Wellocks, whichemploys around 470 people, operates from fourbusiness units and makes over 6,000 nationwidedeliveries a week with its own fleet oftemperature-controlled vehicles.167-year-old family business William Jackson is aGBP 300m+ turnover diversified food groupsupplying into both the retail and foodservicemarkets through brands including online organicgrocery delivery business Abel & Cole, Jackson’sBakery, The Food Doctor, and MyFresh.
FOODSERVICE SNAPSHOT JULY 2019
GOPIN & PARTNERS
sold its 8 franchised restaurants
BFC PARTNERS
was sold to
Valedo Investment Fund II
UK
FOOD DISTRIBUTION
was sold to
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6SECTOR TEAMS OF SPECIALIZED EXPERTISE BACKED BY
DISCLAIMER: No part of this report may be reproduced without the written permission of Clairfield International. The information herein has been obtained from sources that we believe to be reliable, but we do not guarantee its accuracy orcompleteness. Much of the information contained in this report is subject to variation due to changes in market conditions, legislation or regulatory matters and Clairfield International does not undertake to notify any recipient of the report of changesto the information contained herein. This report is not to be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. Additional supporting information is available upon request. Contact: Press office, ClairfieldInternational, Tel: +41 22 518 0242, [email protected]
Albert [email protected]: +49 69 707 969 20
Contact: 11 Rue du Conseil-Général1205 Geneva, Switzerland
Tel: +41 22 518 [email protected]
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www.clairfield.com
80% OF OUR MANDATESARE INTERNATIONAL
Top 20IN WORLDWIDEMIDMARKET RANKINGS
Top 10IN EUROPEANMIDMARKET RANKINGS
Leading independentM&A advisor formidmarket deals
Clairfield International was founded in 2004 by four EuropeanM&A boutiques and has since expanded to encompass all majoreconomies worldwide with the addition of knowledgeablepartners in key markets.
Our strengths are our entrepreneurial spirit, local expertise,industry know-how, and close bonds among all team membersspanning the globe.
300+ TEAM MEMBERS 30%
DEALS CLOSED WITHINTERNATIONAL BUYERS
70INDUSTRY ADVISORS
22COUNTRY TEAMSACROSS THE WORLD
130+DEALS CLOSED ANNUALLY
EUR 20 billion
CUMULATIVE DEAL VALUE LAST 5 YEARS
Gary [email protected]: +44 121 234 6070