The agri-food sector is undergoing profound change. In addition to uncertain macroeconomic conditions, there are strong demands for environmental responsibility. What changes will allow sector players to maintain their margins? Here are some explanations and analyses from the experts at AURIS Finance, a consultancy specialising in mergers and acquisitions.
Social and environmental responsibility
Meeting the growing demand for sustainable production is the main challenge facing the agri-food sector. This applies to all stages of production: animal feed, resource management and limiting the use of chemical fertilisers. In 2024, the agri-food sector is the third largest energy consumer in French industry. A number of regulations are now in place to provide a framework for the environmental transition. Businesses in the industry are faced with rapidly changing legislation and standards. These include the Climate and Resilience Act, which requires companies to reduce their greenhouse gas emissions, improve energy efficiency and increase transparency about the origin of products. In addition, the Anti-Waste Act and pesticide norms are increasing production and supply chain management requirements for all companies in the sector. Lastly, more than ever, food safety is at the heart of the challenges facing the industry. This means strict regulatory compliance, effective allergen management, and adaptation to emerging risks.
Innovation and technology
To meet these various challenges, the sector’s professionals are committed to more responsible supply chains thanks to technological innovation. Artificial intelligence systems, sensors and drones are now making it possible to optimise crop management, reduce resource use and increase yields. Smart agriculture, or ‘precision farming’, can increase yields by 15% while reducing pressure on resources by 20%. Robots are also being integrated into production processes to improve operational efficiency and reduce labour costs. Finally, when applied to the agri-food sector, blockchain now makes it possible to store all the information about a product (origin, place of farming and production method), guaranteeing optimal traceability.
Mammoth companies
The agri-food sector alone accounts for 17% of France’s GDP and generates a turnover of €198 billion. Despite the large number of players (16,000 companies in the sector in 2024), the market remains highly concentrated. The 23 largest companies in the sector generate 43% of total sales, 40% of added value and the largest share of export sales. In terms of revenue, the top three French agri-food groups are Danone, Lactalis and Pernod-Ricard. In order to implement technological innovations that significantly increase yields while minimising the impact on resources, industry players are increasingly looking to merge.
Our experts at your side
In 2024, the French agri-food sector is at a crossroads, facing major environmental challenges and driven by promising innovations.
The industry giants are constantly looking for new opportunities. At the same time, smaller companies are looking to join forces to implement structural changes and achieve economies of scale. AURIS Finance’s experts are specialised by sector. They will assist you in your search for financing and will be at your side during your fundraising, buy-out and divestment operations.
