M&A activity snapshot
Branded CPG deal-making is recovering in 2026 after a weak 2025. Capstone Partners reports branded food M&A has more than tripled (+210% year over year) to 31 deals in early 2026, following a retreat the prior year. Beverage was softer: beverage sector M&A declined 18.3% in 2025, though deals above $500 million made up their highest share of disclosed deals since 2019.
Across all consumer sectors, Capstone counted deals falling 18.9% in 2025 and the median multiple weakening to 9.2x EV/EBITDA.
Large strategics set the tone at the top. Ferrero agreed to buy WK Kellogg Co at a total enterprise value of $3.1 billion, and Kimberly-Clark agreed to acquire Kenvue at approximately 14.3x LTM adjusted EBITDA. Those deals are far above lower-middle-market scale, but they drive the portfolio reshaping that creates demand for smaller brands.
Who is buying
Large strategics buying growth brands. Incumbents are buying better-for-you brands to add growth. PepsiCo agreed to buy poppi for $1.95 billion and closed its acquisition of Siete Foods for $1.2 billion. Hershey bought LesserEvil as a better-for-you snacks platform that also brings additional manufacturing capabilities and capacity.
Strategics pruning portfolios. The same companies sell what no longer fits. Unilever agreed to sell The Vegetarian Butcher, a non-strategic asset, given its limited scalability, while buying premium personal care brands. Carve-outs like these become platform investments for private equity.
Private equity. Sponsors paid higher multiples than strategics in 2025, a 10.4x median versus 8.6x. They also need exits: in branded food, 56 platforms were formed between 2019 and 2022 against 24 M&A exits since 2023, so expect sponsor-owned brands to come to market and sponsor platforms to keep adding on.
What buyers look for
Category positioning comes first. Capstone found 21 of the 31 branded acquisition targets in early 2026 positioned in better-for-you, high-protein, international, and sustainability categories. Consumer buyers in 2025 gave elevated valuations to businesses with strong customer retention, clear competitive moats, pricing power, cash flow generation, and tariff-insulated supply chains.
Retail distribution and velocity are the proof of demand. All-commodity volume (ACV) is the standard distribution measure; The Honest Company's 10-K defines it as distribution weighted by the dollar retail sales of the stores carrying the product. Buyers want rising ACV and steady sales per store, not distribution bought with trade spend.
Customer concentration is a standard risk. Walmart accounted for approximately 29% of Conagra's fiscal 2026 net sales, and its 10 largest customers about 60%.
Supply chain and regulation get close review. Hershey guided to tariff expense of approximately $170 to $180 million for 2025, and Conagra warns that dependency on contract manufacturing arrangements could impact sales volume. Food brands face FSMA 204 traceability, which FDA proposed to push to July 20, 2028. Personal care brands face MoCRA, which requires facility registration renewed every two years and mandatory serious adverse event reporting.
What makes a strong company
A branded CPG company that draws competitive bids typically shows:
- Growth in a category buyers want, such as better-for-you, protein, or functional beverages, backed by scanner data rather than shipments.
- Rising distribution with stable or growing sales per store.
- No single retailer carrying an outsized share of sales, or a credible plan to reduce it.
- Gross margin that holds after trade spend, with tariff exposure mapped by ingredient and packaging source.
- A documented co-manufacturing agreement with backup capacity, or owned production a buyer values.
- Food safety, traceability, and labeling records ready for diligence.
Valuation and deal structure
Consumer multiples are lower than they were. Capstone's 2025 consumer median of 9.2x EV/EBITDA was almost half a turn below 2024's 9.6x, and the third straight year below its 10.5x long-run median. PE buyers paid more than strategics at the median.
Growth brands are often priced on revenue. Flowers Foods agreed to pay $795 million in cash for Simple Mills, which had estimated 2024 net sales of $240 million. At the largest scale, PepsiCo's poppi price included $300 million of anticipated cash tax benefits, for a net purchase price of $1.65 billion.
Structure often includes contingent payments. Hershey's 10-Q reports LesserEvil's initial cash consideration as $769,090 thousand (about $769 million), plus contingent consideration of up to $200,000 thousand if defined earnings targets are met. Smaller deals commonly use earnouts tied to net sales or distribution milestones to bridge valuation gaps. No public dataset breaks out earnout frequency for lower-middle-market CPG deals.
Outlook
Expect more branded CPG deals through 2027. The branded food rebound, the backlog of aging sponsor-owned platforms, and continued portfolio pruning by large strategics all add supply and demand. Capstone's 2026 food update ties branded deal flow to better-for-you and high-protein demand.
Watch two risks. Tariffs remain a priced cost line, and GLP-1 adoption is cutting indulgent volumes: Cornell researchers found savory snack spending dropped by about 10% within six months of a household starting the medication. Brands aligned with protein, functional, and better-for-you trends will hold their value best.
Own a branded food, beverage, or personal care company and want a market-data starting point? Run the valuation tool, or see the broader Consumer & Retail M&A overview. For how strategics and sponsors find founder-owned brands, read family office direct deal flow.