Case Study: Food and Beverage
Engagement Overview
Fulcrum Consulting Group was engaged by a buyout client considering an investment in a co-packer of condiments, drink mixes, and seasonings.
Client
Private Equity Buyout
Engagement
Market Diligence
Industry
Food & Beverage
Target Company
Condiment Co-packer
Key Diligence Issues
In order to inform deal team understanding of business risks and opportunities, the project scope included a market assessment and expert network interviews with the following areas of focus:
Market Assessment: Characterize how retailers decide which brands of products to carry on their shelves and understand how specific foods performed relative to their category and to target growth. Identify required certifications and role in decision criteria when selecting a supplier. Determine health and trajectory of key brands for customers and their retailers.
Competitive & Supply Chain Assessment: Develop the competitive landscape based on certification requirements and manufacturing expertise. Determine what may cause branded food companies to change suppliers or disruptions in the supply chain.
Approach
Fulcrum leveraged its relationship with a leading expert network to engage with professionals in the food and beverage industry. Interviews were conducted with respondents at key national retailers with current or recent experience in product purchase decisions to understand supply chains, distribution dynamics, and retailer decisions on which products to stock on their shelves.
Additionally, on a blind basis, Fulcrum sourced and interviewed other current product procurers to strengthen its understanding of these important market dynamics.
Desktop research was conducted to characterize the current market landscape and to determine size and growth rates of target product categories, segments, and retailers in the U.S. In addition, the relevant competitive landscape was determined through analysis of certification data.
Impact
Fulcrum determined the stability in relationships between copackers and branded food companies and between retailers and relevant food brands. Fulcrum also identified the key performance criteria for the target company to focus on with its customers and identified future capabilities that would be important to have going forward.
Finally, although outside of the original scope, Fulcrum identified high growth sub-segments of key importance to the business.
Fulcrum consultants are skilled at conducting primary research to inform deal considerations and amplify the work of your team and other advisors.