Food and drink sector M&A activity has surged as food groups and private equity snap up fast-growth wellness and functional food brands.
The number of deals in the UK sector shot up 18% in the financial year to March 2026, reaching 78 deals total. Disclosed deal values rose 25% to £5.5bn, up from £4.4bn in 2025.
The number of deals in the sector has now grown 52% over the past two years, according to the research from law firm Pinsent Masons.
Functional foods and healthy ‘lifestyle’ brands were in particularly hot demand in the 2025 financial year, according to Pinsent Masons, with the calendar bookended by Müller’s purchase of kefir brand Biotiful Gut Health and Danone’s €1bn (£865m) acquisition of Huel.
According to McKinsey, products linked to energy, gut health, immunity, weight loss, muscle support and nootropics are the most sought-after products in the functional market.
Businesses in these categories that have proven they have sustainable, resilient growth are those attracting bidders, according to Pinsent Masons head of retail and consumer Tom Leman, as companies fight to beat an otherwise limp market.
“Whether through significant deals that consolidate global platforms, or targeted acquisitions that extend into adjacent categories, activity is increasingly trending toward building portfolios that can absorb volatility and respond quickly as consumer preferences shift.”
Leman pointed to Carlsberg’s £4.1bn mega-deal to buy Britvic as an example of large corporates broadening their portfolio to grab growth.
“Large groups are increasingly using M&A to blur traditional category lines, bringing food, beverage, snacking and wellness propositions together into portfolios that can flex in response to consumer demand,” he said.
“Acquiring established brands with loyal customer bases allows buyers to pivot faster as consumer preferences shift.”
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