The holiday season is upon us, which means traveling to see family, making memories, and reveling in cooler temperatures (at least for the Northern Hemisphere). For many, it also means the chance to try out new holiday recipes, splurging on expensive cuts of meat, or an excuse to have a slice of pie at every meal.
Now that you're hungry for food as well as deals, it's time to look at the industry that makes all those tasty treats possible: food and beverage. If your firm is hungry to add a sweet new deal to its portfolio, we're detailing the overall trends affecting this sector and dishing out its fastest-growing private companies. Let's dive in!
Despite recent challenges including COVID-19, supply chain delays, and global unrest, the food and beverage industry continues to grow in size each year and is expected to hit $9.36 trillion by the end of 2023. In fact, the industry is forecasted to grow at a 6.74% compound annual growth rate (CAGR) and hit nearly $13 trillion by 2028.
A practice that entered the limelight during the pandemic, direct-to-consumer (DTC) stuck around and is here to stay. Instead of visiting physical big box and retail stores, more people are ordering directly from producers and wholesalers, or online from grocery stores. Plus, DTC offers many benefits for sellers: lower costs and higher potential profit, more direct control over marketing and messaging, and the ability to collect first-party consumer data. It's no wonder DTC is one of the larger food and beverage trends affecting the industry.
In addition to DTC sales, many grocery stores and independent businesses have started offering grocery sales online. In the UK, 12.6% of grocery sales were made online, and $460 billion of the $760 billion generated by the global food delivery market is from the grocery delivery segment alone. Further, it's expected that in just 10 short years, the food delivery market will have grown nearly 8x from $240 billion in 2017 to $1.65 trillion by 2027.
Sustainability has permeated nearly every industry over the last several years, and food and beverage is no exception. Already a major issue, water scarcity will only become a larger problem as the world's population grows, according to the UN. Nearly half the world (47%) lives in locations that suffer from water scarcity at least one month a year, and it's estimated to grow to 57% by 2050.
Companies that offer and leverage new technology and farming methods, such as vertical farming, are poised to grow at astounding rates as the world seeks to be more sustainable and eco-conscious. But it's not just water usage. Efforts to reduce the materials used in packaging, create and utilize plant-based plastics, and reduce food waste are sure to capture public interest. Businesses that recognize these food and beverage trends can carve out their niche in the industry.
While plant-based meat and dairy options aren't quite as novel as they once were, consumers' focus on alternative, plant-based, and health-conscious food is still a strong food and beverage industry trend. An ADM report found that 77% of consumers are trying to choose healthier food options.
According to Nielsen, more than half of global consumers (52%) are adding more plant-based food to their diet. Twenty-nine percent (29%) are actively being more thoughtful about their meat intake, according to the Food Marketing Institute. In a separate report, Nielsen also found that demand for plant-based products increased by 12% between 2020 and 2021, with meat alternatives making a similar jump at an 11% increase.
The food and beverage industry is large and diverse, with thousands of companies offering a smörgåsbord of different options, ranging from craft breweries to coffee roasters to gourmet cookies. While understanding the macro food and beverage trends that are affecting the entire industry is key, it's also helpful to know what types of companies are quickly gaining traction.
To find out, we used Sourcescrub's deal sourcing platform to source the top 50 fastest-growing private food and beverage companies in the world based on their recent 3-month growth:
Over three-quarters (76%) of the top 50 fastest-growing private food and beverage companies hail from the United States. The United Kingdom, usually a smaller percentage in our Sector Investing series breakdowns, comes in second at 18%, while Canada rounds out the headquarters locations at 6%.
The spread of companies' founding years was also relatively homogenous, with 72% of the companies in the list having been founded between 2010 and 2019. The previous decade, 2000 - 2009 came in second-most populous at 22% and the youngest companies, founded between 2020 and 2023, were the smallest percentage at just 6%.
Most (86%) of the companies in the top 50 are small, with only 11-50 employees. The next range up, 51-200 employees, comes in second-most populous at 10%, and both of the largest ranges, 201 - 500 employees and 501 - 1000 employees, claim just 1 company each.
With how small the organization sizes are, it's no surprise the estimated annual revenue for the top 50 fastest-growing private food and beverage companies is similarly small. Nearly two-thirds (64%) of the list have an estimated revenue of under $1 million USD, a statistic we've not seen before in this series. The next-largest category, $1 million - $10 million, accounts for 34% of the list. The last company on the list is an outlier and estimated to make more than $50 million annually.
518 Kitchen, based in New York's North Country, provides frozen keto, low carb, and paleo meals directly to consumers. Its products are chef-prepared and backed by nutritionists to assist people in achieving their desired nutritional goals.
Daydream Dessert Co. provides the natural food industry with better quality desserts that are made with organic, real, and nourishing ingredients that actually taste good. The company's products are made with organic, whole, nutrient-dense, plant ingredients and are free from grains, gluten, dairy, egg, soy, and white sugar.
Daylight Donuts is an all-American donut shop. Serving scratch-made yeasted and raised donuts, cake donuts, long johns, kolaches, boozy donuts, milkshakes, frozen custard, and so much more, they serve the Chesterfield, MO area with tasty treats daily.
Enlightened offers delicious, good-for-everybody frozen options to satisfy both sweet and salty cravings. The company creates products with nutritious, delicious flavors that will make you rethink what ice cream can be.
Island Olive Oil Co. offers the finest selection of extra virgin olive oils, flavored oils, and balsamic vinegar available. Based out of Hawaii, the company ships to many global locations and offers certain spices, gourmet pantry items, and housewares and Hawaiian-made goods to their customers.
Nonna Pia's Gourmet Sauces makes balsamic glaze and apple cider vinegar for marinades, dressings, salads, grilled meats, vegetables, and even fresh fruit. In addition to their online store, Nonna Pia's products are available in many retailers across the US.
Peaks Coffee Co. turns coffee beans into roasted, ground, and flavored coffee products, as well as coffee concentrates, extracts, flavorings, and syrups. They offer both a direct-to-consumer online store as well as wholesale for cafes and coffee shops.
A plastic-negative chocolate bar company, Prodigy Snacks offers dairy-free, gluten-free, vegan-approved, refined sugar-free, plastic-free, and palm oil-free chocolate. The UK-based company focuses on plant-based products and climate-neutral operations and is one of UK's 800+ B-Corps that meet high standards of social and environmental performance, transparency, and accountability.
Skuta offers special dry roasting that brings out the ultimate nutty richness and toasted crunch of pumpkin seeds. The Canadian-based company focuses on bringing farm-to-table healthy snack options to their customers through Amazon.ca and select Canadian retailers.
Spier's Salads is a food delivery and catering business that offers colorful salad, skewer, and fritter platters for corporate meetings and private events, including weddings. Originally making a name for itself by selling salad out of a London telephone booth, the company has since expanded and now serves its customers in the greater London area.
Now that you’re full of knowledge about food and beverage industry trends, it’s time to find your next opportunity. Our deal sourcing platform, Sourcescrub, has the scoop on not only the top 50 fastest-growing private food and beverage companies but also millions more in every industry. Get a jumpstart on your research by downloading the list today and seeing what Sourcescrub can do for your firm.