Park Street Insider Podcast
What's Trending— Tracking Spirits in the Modern M&A Market
Jul 24, 2024
In this insightful discussion, Emmett Strack, an M&A expert in the beverage alcohol sector, breaks down the dynamic landscape of mergers and acquisitions post-2020. He explores how consumer behavior and pandemic innovations have shaped investment trends. The talk dives into Black Button Distilling's investment journey with Constellation Brands and the increasing prominence of ready-to-drink cocktails, revealing how craft spirits are navigating market shifts. Strack's analysis provides a compelling look at what drives investors in 2024.
35:27
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Quick takeaways
- The beverage alcohol M&A landscape has shifted from high growth to cautious investment due to inflation and rising interest rates in 2023.
- Craft brands must prioritize sustainable practices and positive cash flow over aggressive expansion to navigate the changing market dynamics.
Deep dives
Current State of M&A in Beverage Alcohol
The beverage alcohol industry is experiencing a complex M&A landscape shaped by recent economic changes and consumer behaviors. During the pandemic, brands that thrived were those with products available for off-premise retail, as consumers shifted to home consumption, leading to increased innovation and brand launches. Acquirers took notice, driven by low interest rates and abundant consumer spending, resulting in numerous high-profile acquisitions between 2020 and 2022. However, with the onset of inflation and rising interest rates in 2023, the market saw a decline in M&A activity as businesses faced cautious financial environments and uncertainty.
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