Key Macro Trends Shaping the Landscape:

1. Sustainability and Ethical Sourcing – A Strategic Imperative

Consumers and investors now demand authenticity in sustainability practices. According to Hanna, at Power Sustainable Lios, “Sustainability is one of the tools to leverage in support of building attractive, resilient businesses in the food industry.” 



As transparency and responsible sourcing become non-negotiable, businesses can leverage sustainability practices through operational efficiencies and waste reduction to achieve long-term resilience and higher profitability. Sustainability isn’t just about the environment; it’s about creating sustainable business models and catering to the needs of the modern consumer, who often are making choices on who they buy from, based on aligned values—sustainability being one of them.

2. Strategic Consolidation and Succession Planning – Growth Through M&A

The food industry, characterized by fragmentation, presents unique opportunities for strategic consolidation. As Kahler, at e2p, articulates, “Succession has become a major catalyst for many family-owned companies to seek private equity partners who understand their unique needs, possess in-depth industry knowledge, and have a track record of successfully completing transactions. Further, they want a partner that will build on the family’s legacy and support the company’s continued growth.” Strategic consolidation unlocks growth opportunities, accelerates scalability, and facilitates product innovation. Further to that, Hanna, at Power Sustainable Lios states, “A significant driver in the food industry right now is succession planning within family-owned manufacturing businesses. Many of these companies are at a crossroads, facing increased regulatory pressures, quality standards, innovation demands, and the need for generational transitions. This creates ample opportunities for strategic consolidation and private equity partnerships.” However, many privately owned family companies may not be ready for a full complete exit, especially as different family members' objectives and timelines to either run the business or take on additional responsibilities may vary. In those cases, a flexible minority capital partner is an attractive option. 

“About two-thirds of our investments are family-owned businesses. For these companies, partnering with private equity offers flexible options—some family members can pursue a full exit while others stay involved, giving everyone the optimal outcome for their individual needs with optionality as the center.”

~Andrew Snyder, Managing Principal, Graham Partners, Newtown Square, PA

3. Consumer-Driven Investments – Aligning with Evolving Preferences

Today’s consumers increasingly seek health, wellness, convenience, and premium products, driving investment decisions. e2p’s Kahler notes, “We strategically avoid short-lived fads, focusing instead on sustainable, long-term growth areas such as better-for-you products, convenience solutions, controlled portions, and premiumization.” Manufacturers responsive to these evolving preferences are well-positioned for sustained growth. This means understanding the drivers behind some of the trends, and strategically adapting your business to align with the core consumer needs.



However, differentiation is a must. As Snyder of Graham Partners articulates, “We actively seek out food manufacturers delivering bold, innovative flavors with clear competitive advantages—whether through proprietary products, automation, or unique market positioning. These attributes create a substantial competitive moat, driving sustainable long-term growth."

4. Private Label Growth – Capturing Value in Uncertainty

Economic uncertainties have significantly amplified the demand for private-label products, presenting substantial opportunities for growth-oriented investors. The global private-label market, projected to reach $463.9 billion in 2024 and $662.8 billion by 2029, presents a substantial opportunity for PE firms. As Hanna at Power Sustainable Lios stated, “Inflationary pressures and economic uncertainty have reshaped consumer purchasing patterns, increasing the demand for private label products. Consumers are increasingly seeking value-driven solutions without compromising on taste or nutrition, leading to robust private label growth across numerous categories.” Companies positioned strategically to deliver high-quality, value-oriented products stand to capture significant market share in this expanding space. In many ways, wages have not kept up with inflation, causing additional pressures on consumers, thus, private label offerings and a move away from branded products have gained stream as they meet the needs and budget of the current consumer. 

"Private label has surged as major brands struggle to innovate swiftly and economic pressures mount. This shift has created considerable opportunities for private equity to support companies capable of rapidly scaling and effectively competing in value-oriented market segments."

~Andrew Snyder, Managing Principal, Graham Partners

5. Outsourcing and Contract Manufacturing – Strategic Flexibility and Scalability

The increasing preference of brands to outsource manufacturing underscores a strategic shift toward asset-light business models. According to Kahler at e2p, “CPG companies, large and small, prefer focusing investment in their brands and having increasingly worked with reliable co-manufacturers to support their supply requirements. Contract manufacturing provides the necessary agility, scalability, and innovation support, enabling brands to rapidly respond to market demands without incurring heavy capital expenditure.” Likewise, outsourcing production enable CPG’s to trial new products, capabilities, and new streams of revenue, making them more nimble, and quicker to market, which is why PE firms are looking at these contract manufacturing companies as an opportunity area in the market.

“We are seeing a significant trend toward outsourcing manufacturing. Brand owners increasingly prefer to outsource production, creating attractive opportunities for ingredient suppliers and contract manufacturers as these brand owners seek to refocus their resources on core competencies and brand-building activities.”

~Craig Hanna, Founding Partner, Power Sustainable Lios

So, how do you connect the dots and secure the funding and expertise required to either prepare yourself for a private equity investment or find the right partners, or strategic alternatives?

It all starts with having the right support. Navigating private equity engagements involves more than financial considerations—it requires strategic clarity, industry-specific insight, and a keen understanding of investor priorities. At Kinetic12, we specialize in guiding food manufacturers through every phase of the M&A process, from strategic assessment and market positioning to due diligence and deal execution. Our expertise ensures you clearly articulate your strategic vision, optimize performance, and effectively engage investors, enhancing your company’s value and ensuring a successful partnership. Alternatively, for publicly traded companies looking to expand, we help bridge the gap to understand untapped strategies to win in an ever-changing market.

“Success in today's rapidly evolving market requires partners who not only understand your business but can strategically position you for transformative growth. Kinetic12 delivers clarity, confidence, and unmatched strategic guidance every step of the way.”

~Tim Hand, Partner, Kinetic12

Implications – How to set yourself up for success:

For manufacturers, knowing what PE is looking for well in advance of a potential sale or investment is essential. As Kahler of e2p states, “Manufacturers aiming to attract private equity investment should focus on clearly articulating their competitive advantages, demonstrating sustainable growth trajectories, and ensuring strong, aligned management teams.” Understanding and proactively addressing these value drivers can significantly enhance your strategic positioning, competitive advantage, and growth trajectory. 

“We focus on investing in companies with strong, consistent long-term growth potential. A proven track record, combined with a strategic competitive edge, what we would call a ‘wind at their backs’— is essential for sustainable value creation.”

~Andrew Snyder, Managing Principal, Graham Partners

Likewise, for Private Equity investors, keeping a pulse on the latest foodservice and consumer trends, market dynamics, and leadership intel is paramount when evaluating investment direction, valuation, growth potential, and more. At Kinetic12, we help bridge the gap between manufacturers looking for investment and PE firms exploring opportunities –-helping with everything from strategic positioning, innovations, and long-range planning for manufacturers to market assessments, confidential memorandums, due diligence, valuation guidance, and post-transaction change management for PE firms. 

"The difference between a good deal and a great deal often comes down to preparation. At Kinetic12, we help clients identify hidden opportunities, align organizational capabilities, and clearly communicate their unique value."

~Gary Schachter, Partner, Kinetic12

Whether you are a manufacturer, distributor, retailer, operator, PE company, or venture capitalist, embracing these macro trends is essential for securing future success. Getting in early with potential investors can make all the difference in setting yourself up for success when the time comes.

Kinetic12 invites you to begin this important conversation today. Let’s explore how we can strategically position your business for growth, effectively manage your investment opportunities, and guide you to success in this dynamic private equity landscape.

Conclusion

This remarkable surge in private equity investment signifies more than a mere opportunity—it represents a decisive moment for food industry leaders. Embracing these transformative shifts demands courage and vision; maintaining the status quo risks leaving your business behind as competitors evolve and grow. Success in today’s complex M&A landscape requires bold, forward-thinking strategies, responsiveness to emerging trends, and the agility to pivot quickly amidst changing trade dynamics and economic realities. Kinetic12 is ready to partner with you, navigating these waters together and turning challenges into clear pathways toward meaningful, sustained growth. Take action now—your business's future leadership depends on the choices you make today.