You want to sell your fresh produce store? Then it's good to know what the takeover market in the field of fresh produce stores looks like. The fresh produce industry is facing some challenging years. Cooperating, merging or being acquired may be a future-proof solution.
The number of mergers and acquisitions of fresh produce stores fluctuates between 10 and 20 transactions annually. However, Grant Thornton does see an upturn: 'Looking purely at international transactions, we see strong interest from foreign buyers for businesses active in agriculture, bakery products, fish/meat/poultry, restaurants/pubs, dairy products, beer, crop processing and food ingredients,' says Grant Thornton M&A manager Evert Everaarts.
There are many ways to value a business. A common method of expressing the value of a business is "a factor x gross annual profit." This factor is also called multiple and another designation for gross annual profit is EBITDA (Earnings Before Interest Taxes Depreciation and Amortization).
In the retail sector, the sector to which fresh food stores belong, an indicative EBITDA multiple range of 1.9 to 3.0 currently applies, according to the Brookz Takeover Barometer. The average EBITDA multiple across all SME sectors is 4.90.
The valuation of a business is often the starting point for negotiations between buyer and seller. The outcome of these negotiations is the final sales price. So valuation and price are two different quantities. Besides valuation, the price is also determined by possible scarcity in the market, bargaining power of the parties, the strategic value of the business for the buyer and possible synergy effects for the buyer (cost savings, purchasing advantages).
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Want to buy a business or sell a business in the retail sector? With this Brookz Sector Monitor we want to present buyers and sellers with facts, figures and an outlook that provide insight into the number of transactions, the value development of businesses and the latest trends and developments in the retail sector. Because in any buying or selling process, thorough preparation provides peace of mind, overview and structure.
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For a number of years in a row, the fresh produce store, such as the artisan baker, greengrocer or strokes, has been losing market share to the supermarket. Competition is cutthroat and supermarkets are investing massively in the quality of products, fresh concepts and food service. Because supermarkets have a much better purchasing position, they are able to compete with the fresh specialty stores on price. The challenge for specialty stores is to counter this with a distinctive offering in terms of concept, assortment, service and knowledge.
In figures, the number of fresh food specialty stores in 2024 looked as follows(CBS):
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A number of trends and developments will inevitably cause changes over the next few years, but they also offer fresh produce stores many growth and acquisition opportunities:
The corona virus outbreak has provided specialty stores with an excellent opportunity to bring in new customers. Thanks to consumers being more at home and falling back on nearby stores, bakers, butchers, greengrocers and other specialists are realizing sales growth of 9 percent, according to ING.
Online providers such as HelloFresh and Willem&Drees are bringing the "specialty food experience" to the home kitchen with non-ordinary dishes and products. In short: food offerings are growing and the boundaries between channels are blurring. The term "specialty store" is becoming synonymous with concepts that respond quickly to the needs of discerning consumers.
Local organic and sustainable regional products with a recognizable origin strengthen the bond with the region. According to ABN Amro, the shorter the chain between 'ground' and 'mouth' and the more visible the craftsmanship, the greater the consumer confidence. Speciality food stores are stronger through increased cooperation with farmers and manufacturers: it provides them with the calling card par excellence for the agri/food sector. But cooperation is also possible with other specialty stores, restaurants or even supermarkets. In this way, entrepreneurs can jointly create a food destination with a complementary (convenience) assortment.
The moment of purchase increasingly coincides with the moment of consumption. Smaller packages, ready meals and take-away products are gaining market share. Experiences and reviews are shared via social media. What is becoming decisive is communicating with the customer via the right devices (omnichannel service), optimizing distribution (home delivery) and using and analyzing the right data (know your customer).
