Major transactions in the Agri-food sector in 2022

A sector hit hard by inflation and geopolitical tensions

Having just emerged from the supply crisis caused by the Covid pandemic, the agri-food sector was again disrupted by a number of events in 2022: firstly, the energy crisis and the increase in raw material costs caused by the war in Ukraine, which gradually spread to the entire industrial landscape and caused an inflationary surge, exacerbated by labour shortages in certain sectors (notably transport). Finally, the animal health crisis (with recurrent outbreaks of avian flu) and an unprecedented drought in Western Europe contributed to spectacular increases in the prices of certain commodities and agricultural products.

In December 2022, food prices are estimated to have risen by 12% compared to January 2021, with peaks in certain product categories: +60% for oils, +20% for pasta, +16% for poultry, etc.

The latent energy crisis combined with the war in Ukraine has indeed had a direct impact on energy prices. As the price of electricity continues to rise, the French government has taken measures (price caps for companies) to limit this increase (+120%), which would otherwise have led to an even steeper rise in companies’ energy bills (as in England). As for natural gas, its price has doubled (+103%) between the first half of 2021 and the first half of 2022. Packaging is also not immune to price rises. There is an average increase of +9.3% since the beginning of 2022. Lastly, supply difficulties (e.g. sunflower oil for fried and breaded products), combined with costly logistical adjustments, have exacerbated the cost increase and weighed heavily on the profitability of the agri-food sector, with EBITDA falling by -16%, while that of the agricultural sector has risen by +12% as a result of the increase in selling prices.

This rise in prices has an impact on consumer behaviour. In 2022, 8 out of 10 French people have adapted to the inflationary context. This adaptation is reflected in an increase in sales of retailer brands – +0.7% in August 2022 compared to August 2021 – and a decrease in sales of organic products of -10.1% over the same period compared to the previous year. These trends, confirmed at the end of 2022, are expected to continue in 2023.

Protein price competition benefits poultry sector

2022 will be a year of raw material cost increases and a second year of avian flu in the poultry sector. The increase in the price of grain needed to feed poultry – due to the war in Ukraine – combined with a second outbreak of bird flu, which reduced the amount available, and the increase in the price of packaging, inevitably affected the industry’s selling price. Thus, despite a -3% drop in household consumption in 2022, poultry processors increased their turnover by 8% over the same year. The sector is also facing a labour shortage. In June 2022, 70% of the managers surveyed said they were facing a shortage of applicants and qualified staff.

Sources :

1. Inflation in food prices
2. Rising food prices
3. State aid
4. Behaviour of the French
5. Gas and electricity prices
6. Rising prices for poultry packaging

Review of mergers and acquisitions

Auris Finance has identified 130 transactions in the agri-food sector in 2022 involving at least one French party (acquirer or target).

Of the 130 transactions identified, 19 were carried out by foreign buyers (the acquisition of BZ Groupe by the American Bunge, the acquisition of Louis François by the Swedish Novax or the sale of the Picon brand by the British Diageo group to the Italian Campari group), representing 15% of the total number of transactions.
French companies acquired 24 foreign companies in 2022, such as the Leduff group’s acquisition of the American company Lecoq cuisine, PAI Partners’ acquisition of a stake in the Austrian company Savory Solution and Sodiaal’s acquisition of a majority stake in Yoplait from General Mills. These transactions represent 18% of the transactions carried out during the year.

The remaining 87 transactions were all between French companies, such as the acquisition of Matines by the LDC group, the acquisition of Keranna Production, a subsidiary of the Agromousquetaires group, by Cité Marine, the sale of Pêcheurs de saveurs by the NICOT group to the Guyader Gastronomie group and the acquisition of Oberti by the Alliance group. AURIS Finance advised on the sale of these last three transactions.

Of the 130 transactions, 62 involved at least one investment fund, representing 47% of the transactions. This proportion, which is higher than last year, demonstrates the continued interest of funds in the agri-food sector, even in a period of economic uncertainty.

The most dynamic sectors are: bread, biscuits, pastries and confectionery (e.g. Groupe Gozoki – Sectal, Sagard’s investment in Novepan, etc.), which accounted for 11. 5% of the transactions carried out in this sector, followed by alcoholic beverages with 8.5% (e.g. Artemis domaines – Maisons et domaines Henriot, Famille Moitry – Château Climens…), then the savoury products sector with 7.7% (e.g. Olives et co – Ansolive, Artisan gourmet – Charpalor…)

In conclusion, AURIS Finance confirms four major trends:

• 2022 has seen the highest inflation rate since 1980 with an average inflation of +5.2%. This significant increase in prices has influenced consumer behaviour, as consumers have turned away from more expensive organic products in favour of cheaper products such as retailer brands.
• Despite a difficult context for the agri-food sector (war in Ukraine, energy crisis, etc.), the interest of investment funds in the sector is not diminishing and is confirmed with 24 more deals than in 2021.
• The alcoholic beverages sector remains one of the most dynamic. The wine sector is more active than ever, with 9 out of 11 alcoholic beverages deals including at least one wine-related transaction (81%).
• For the second year in a row, French poultry consumption has fallen (-3% in 2022). This decline, initially due to consumer awareness of the need for more responsible production, is now linked to a rise in prices. With the war in Ukraine affecting grain prices, the energy crisis and avian flu limiting production volumes, processors are passing on part of the price increase.