Investment in the Food and Beverage Industry

Published on: July 26, 2019

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Individuals and groups who seek opportunities to invest their millions of dollars are increasingly turning their attention towards the food and beverage industry. Not only because no one can do without food and beverage, but because the future projections of the returns on their capital is mouth-watering. According to reports, a 34% increase in funding was recorded against the previous 1.08 billion dollars in 2017, with the new figure now a little shy of 1.5 billion dollars. Food and beverage deals also hit an all-time 338 deals as more investors are getting attracted.

What the future holds

The world’s population is expected to increase by 1 billion over the course of 15 years according to reports from PwC. The corresponding significance of this increase is that there will be 35% increase in food consumption.

The concerns about the possibility of food scarcity and focus on sustainability has led to the increased awareness of start-up’s adopting several measures to heed the warnings. It’s however important to mention that the driving factor behind the recent capital influx in the food and beverage industry isn’t only sustainability. A critical understanding of what the future holds in the industry can only be achieved by unraveling what drives investment decisions. This goes side by side with the role played by the present changes in the industry.

Jordan Gasper, co-founder at a venture fund that invests in top-notch packaged food and beverage companies, AccelFoods, gives some insight. AccelFoods is currently operating out of its third fund, managing over 90 million dollars’ worth of asset and a portfolio with active companies – up to 36. In an in an interview, Gasper revealed how she met co-founder Lauren Jupiter. She said her transactional experience in her previous life as a corporate lawyer has helped AccelFoods participate in in tens of financing. Gaspar further mentioned that there is no better time to invest in food and beverage. More highly skilled entrepreneurs and innovative products are entering the industry daily. As the times move she said, consumer interest and demand in smaller competing brands that meet their specific feeding habits is on the rise.

A substantial amount of purchasing power is now being directed towards these food and beverage. Millennial parents prefer channeling their household spending towards healthy-living products while the younger generation is also focused on quality ingestible as well as transparent items that meet their diverse needs.

Determining the perfect capital to invest
Several manufacturers in the market still find it difficult to cope with the increasing demands of consumers. The quest for an authentic, better-for-you and healthy product that align with consumer lifestyles has opened the window for young entrepreneurial brand to operate. Evaluating how much a company should invest usually based on approachability, product quality, opportunity, potential market as well as revenue metrics. These factors ultimately determine how accessible a product is to the larger number of consumers. At the early stage of the investment cycle, it is often a smart move to identify trends and latch onto them before they have reached the broader retailer space.

 

Saxe, Lizzy. “Is AccelFoods’ $85 Million Fund Ushering In The Foods Of The Future?” Forbes, Forbes Magazine, 14 Nov. 2018, www.forbes.com/sites/lizzysaxe/2018/11/13/is-accelfoods-85-million-fund-ushering-in-the-foods-of-the-future/#33b0ddd8299d.

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