Our take: Aaron Goldstein is an investment banker at Lincoln International. This interview with Food Dive explores which attributes of a food and beverage brand really drive value... | ---------------
In 2018, there were more than 600 mergers and acquisitions in the food and beverage sector. A lot of buzz is created when a food or beverage brand is acquired for a big valuation. Owners of other brands want to know how they stack up.
Ultimately, crafting the brand story is a significant part of achieving a premium value and positioning the brand as well as articulating the future growth potential.
Brands that command high multiples often have nine core attributes in common. These are the key ingredients for maximizing value.
- 1. Strong sales velocity: Retailers curate their shelf space with products that sell-through the best and generate the highest sales and profit per linear inch of shelf space. Sales velocity, measured as units sold per SKU per store per week, is one of the most important metrics for a brand because it validates performance at the point of sale. A brand generating sales velocities above its competitive set will be viewed as a strong performer and is likely to win more shelf space and greater distribution. The combination of high velocity and significant distribution whitespace is compelling for acquirers.
- 2. Brand equity: Consumers want to feel good about the brands they purchase. Brands that sell for big valuations often have an authentic founder's story, a clear mission...
thumbnail courtesy of fooddive.com