Food industry finds recipe for success as mergers soar 32pc
Published 31/01/2013 | 05:00
MERGERS and acquisitions in the food industry surged by almost a third last year as the sector continued to thrive.
A report from the accountants Grant Thornton says dealmaking in the food and beverage sector rose 32pc to €726m last year.
The report argues that Irish food companies must continue to invest, maintaining a "robust and safe supply chain" to protect the reputation of an industry that contributed €9bn in exports last year. That is a much bigger proportion of the economy than the UK, for example.
There, exports are worth about €400 per capita, but in Ireland the figure is closer to €2,000.
Commenting on the report, Ciara Jackson, head of food at Grant Thornton Ireland, said: "The level of deal activity shows the food sector had a very strong year, but the recent 'horsegate' controversy is a cause for concern.
"The reputation of Irish produce has its foundation in high standards of regulation and food safety, and our natural green environment," she added.
"It is vital that the industry collaborates to create a resilient supply chain that can minimise costs whilst ensuring Irish produce maintains its international standing."
The report indicates the growing interest in the Irish food sector coming from the US, where New York-based Hain Celestial forked out €10m for the Cork-based ready meals maker Cully & Sully. Spirits giant Beam, meanwhile, paid more than €70m last January for John Teeling's Cooley Distillery.
"We've noticed a big increase in activity between the US and Ireland," continued Ms Jackson, "with 10 deals in 2012 compared to just two in 2011. Companies such as Glanbia and Kerry Group have had tremendous success due to strong business and cultural synergies and both managements understanding of the opportunities and the scale that the American sports nutrition and food ingredients market has to offer," she added.
Crossing the Atlantic in the opposite direction, cider maker C&C paid €235m for the Vermont Hard Cider Company, while Glanbia paid €49m for sports nutrition business Aseptic Solutions.