The appeal of eating clean food is stronger than ever
Organic & Sustainable Agriculture market report
The COVID-19 pandemic has created shockwaves in the agriculture economy over the past several months. Consumers were concerned about the spread of the virus, so they shifted purchases away from restaurants and heavily toward the grocery store channel. As a result, the purchases of organic produce increased by more than 22% in March 2020 (data compiled by Organic Produce Network).
The food and agriculture supply chain has been severely stressed. Farms, processors, distributors, retailers and other industry participants have worked together to manage a myriad of operational issues to ensure that food is delivered from “farm to fork.” The M&A deal environment in the sector was strong for the five years ended December 2019. Deal volume almost doubled in this period, from 82 transactions in 2015 to 156 transactions in 2019. However, as the COVID-19 pandemic expanded globally, deal volume decreased. A total of 41 deals were completed during the first four months of 2020, a 33% decline compared to the same period of 2019.
With clean food being perceived as a “safe haven’, supply chains endeavored to work together to ensure the delivery of healthy foods. In this report, Doug Kravet, Oaklins’ organic & sustainable agriculture specialist gives us his expert opinion on where the sector will go and the likely outcome once the pandemic subsides.
Organic and sustainably-grown food has proven to be a safe haven, providing comfort for consumers in this turbulent economy. In the short-term, M&A activity has slowed considerably as firms responded to COVID-19. Once markets normalize, we expect firms to make major investments to address weaknesses and deficiencies that were exposed in the past several months.DOUG KRAVET, ORGANIC & SUSTAINABLE AGRICULTURE SPECIALIST, OAKLINS
Our case study features the sale of Stadtmühle Schenk, one of the three largest mills in Switzerland providing high-quality flours to companies in the baking and gastronomy industries, to Kowema, a group of companies owned by Swiss pension funds.
For more expert commentary in this sector, download a full version of this report below