2026 M&A and Investment Trends in the UK Food & Beverage Sector

Lookback at 2025: A year of increased momentum

2025 saw increased momentum in the UK food & beverage sector, despite uncertainty across the sector following the introduction of US tariffs at the start of the year, with renewed interest from private equity investors, companies looking at strategic consolidations and bolt-on acquisitions, and new entrants investing in the sector. Notable 2025 transactions included the £3.3 billion acquisition of Britvic by Carlsberg Group, creating the UK’s largest multi-beverage business, and the £22 million acquisition by AIM-listed, Cake Box Holdings plc, of Asian sweets brand Ambala Foods Limited.

Fiscal and regulatory challenges persisted throughout the year, with major business rates reforms, increased people costs and tightened compliance expectations across the sector, impacting operations and profit margins. Throughout, our international team of food & beverage sector experts were on hand to guide clients through these opportunities and the myriad of challenges the sector continues to face. Some of our highlights from the year include:

• Advising long standing client, Puma Growth Partners, on its investment into LOVE CORN, a leading UK snack brand sold in over 20,000 stores across the UK and US.
• Advising AIM-listed, Cake Box Holdings plc, on its acquisition of Ambala Foods Limited, and Cake Box’s associated equity raising and new debt line.
• Advising long-standing client Stonegate, the largest pub company in the UK, on a range of acquisitions, investments and governance matters.
• Hosting clients and guests from the retail and food & beverage sectors at our ‘Retail Showcase 2025’ and ‘Retail Showcase – Festive Special’. These events served as a great opportunity for retailers of all sizes - from emerging start-ups to more established brands - to showcase their range of products, as well as bringing together clients and guests for a night of fun and interesting discussion.

Lookahead to 2026: Sub-sectors, PE investment and supply chain deals

Notwithstanding Coca-Cola’s decision to halt the sale of Costa Coffee, we remain optimistic about the state of UK M&A in the UK food & beverage market this year – with valuations across consumer-facing industries being tested, Coco-Cola’s move is likely a rational response to the shifting investment landscape rather than an indictment of the UK coffee market or wider UK food & beverage market. Much momentum has also continued from 2025 into early 2026. The Greencore Group plc acquisition of Bakkavor Group plc and the acquisition of Hovis Group by Associated British Foods, the owners of Kingsmill, are expected to complete this year; the latter being subject to ongoing review by the Competition and Markets Authority.

We expect key categories to benefit from demand shifts this year to include healthier snacking, plant-based proteins, functional food and drink, such as protein rich, gut health, energy and hydration products, no  and low alcohol alternatives, premium world flavours and performance private-labels. We also expect to see the use of weight-loss supplements and medications (including GLP-1) have an increasing influence on consumer demand, impacting the sector’s category mix and portion options.

Private equity investors remain active in the UK food & beverage sector and are focused on established brands and suppliers with steady sales and cash generation. We expect this momentum to continue into 2026. As the UK food & beverage market is highly fragmented, investors are seeing clear value in bringing businesses together to create scale. This is creating a squeeze in the middle: mid sized brands struggle to compete with the largest players and higher end independents, who benefit from more profitable price points. Larger groups can buy ingredients on better terms, run factories and warehouses more efficiently, and share central functions, which lowers unit costs. This is particularly evident among private label suppliers and contract manufacturers serving supermarkets and foodservice, where size and reliable service are critical to winning and keeping volume.

We also expect more deals across the supply chain to secure capacity and improve margins. Companies are buying or partnering with manufacturers, ingredients and packaging providers, and chilled logistics businesses to reduce supply risk, improve traceability and strengthen pricing with customers.

Outlook: A resilient and adaptable market

Despite continuing headwinds, the UK food & beverage sector has proved resilient and adaptable, and we remain optimistic about the 2026 outlook. As the market evolves, well prepared businesses will use selective acquisitions, partnerships and funding rounds to build scale, secure supply and unlock growth. Early planning, clear data and practical terms will help protect value and improve execution. We remain ready to assist our long-standing and new clients in this sector to achieve their strategic goals.