Tech evolves, ecommerce thrives and ‘healthy’ powers change
The M&A market in the consumer products and retail space is shaping up in ways that reflect a continuing evolution of data and technology use, and a continued trend toward health, wellness and convenience. At the same time, the uncertainty about the upcoming election has resulted in some dealmakers taking a wait-and-see approach while others are eager to get deals done. Valuations remain sky-high, but private equity (PE), venture capitalists (VCs) and corporate acquirers remain active and opportunities still exist to capitalize on trends in an industry that is experiencing significant change.
Key trends in the consumer products and retail space include:
- Technology upping the game in the supply chain and elsewhere
- Social media data usage increasing for marketing and market research
- Health and wellness products and services driving deals
- An apparel market that continues to decline driven by an ongoing shift to more casual attire; however, more private companies are reaching “unicorn” status with over $1 billion valuations
- A food industry that expects continued growth in natural, organic and plant-based products
A tech evolution
Amazon, a master of tech innovation, acquired nine companies in 2019, touching on mobile robotic order fulfillment as well as cloud computing, business computing software and streaming services. “Amazon has made over 100 acquisitions and investments in the past 10 years and continues to be aggressively acquiring businesses that help bring in new technologies and people talent, and to acquire potential competitors,” said Simon Jewkes, principal, Transaction Advisory Services, Grant Thornton.
Amazon is not alone in acquiring smaller brands to enhance products or marketing. “We see this trend across large retail and consumer products companies that are struggling to develop technologies and ecommerce capabilities in-house,” said Jewkes. Walmart acquired Aspectiva in early 2019, an Israeli-based company that specializes in machine learning and natural language processing capabilities. Aspectiva will be joining Walmart’s Store No. 8, the incubation arm launched by the retailer in 2017 to uncover ideas that will transform the future of commerce.