European food & beverage market update

The European food and beverage sector is entering a new phase of transformation. Following years of volatility, from inflation to geopolitical tension, the market is showing signs of resurgence. Strategic repositioning, health-driven innovation, and renewed investor confidence are setting the stage for a more dynamic M&A landscape.

Key consumer trends shaping the market

Consumers are embracing food-as-medicine, driving demand for clean-label and functional products
Global flavours and culturally rooted cuisines are gaining traction across Europe
Private-label offerings grow, but strong brands remain synonymous with quality and resilience
Convenience-led formats like frozen and ready-to-eat foods are thriving amid busy lifestyles

Market outlook

Despite macroeconomic headwinds, optimism is returning. Deal volumes dipped in early 2025 due to new trade tariffs, but the UK and Ireland bucked the trend with a 50% year-on-year increase in Q2. Strategic buyers are leading the charge, while private equity is cautiously re-entering as conditions stabilise.

Looking ahead, activity is set to remain strong in health-aligned categories, corporate carve-outs, and cross-border expansion. Flexible deal structures, like earnouts and deferred considerations, are helping bridge valuation gaps in an uncertain environment.

Subsector spotlights

Buoyant categories attracting hot interest

Investor interest is clustering around high-growth categories aligned to health, convenience, and strategic value. Functional beverages and VMS are booming, food ingredients are attracting private equity for their pricing power, and bakery and dairy are consolidating rapidly, with whey emerging as a key value driver. Frozen formats continue to gain ground, supported by evolving consumer habits and sustainability appeal.

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