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Why 2024 might be a better year for private equity funding in food, beverage

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With the debut fund, Forward Consumer Parterns is looking for food and beverage companies in a whitespace and which have a sustainable business, Leeds said.

“What we’re looking for is the ability to take some of the whitespace that’s left in [the consumer market]. As the larger investment firms who have been incredibly successful have scaled up, they’ve left some white space for people like us, for Forward, who can come in and partner with brands who are not these brand-new venture capital growth equity 300% growth style companies, that’s not who we are, what we do. We’re looking for assets that are and brands that are proven and enduring, powerful across not just years, but hopefully decades as well.”

How food, beverage companies can assess what type of funding is best for them

While the capital crunch of 2023 impacted a number of food and beverage company, 2024 may be a better environment for funding, as interest rates are set to decline and inflation slows, Leeds explained.

“From what I have observed, it feels like the worst is behind us from where the market has been. 2022 was a very challenging year with supply chain, inflation, out of stocks, and lingering effects of COVID and Omicron, and all of these ripples that just it felt like there was never a moment where you could get a clean 30-day look at just having a business and having a plan and operating. It was curveball after curveball, [but] ‘23 had still some curveballs but felt more manageable.”

As capital markets open up, food and beverage companies that are interested in funding need to evaluate their options and understand what might be the best fit for their business, whether that be more traditional commercial loans or a private equity partnership, Leeds said. While acknowledging it might not be right for every company, Leeds highlighted that private equity provides two things that can be helpful in scaling a business: capital and a partner.

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