Ready-meals, functional foods, food safety and packaging technology are highlighted as the key areas of interest for private equity investment in a report to be released next week.

The report, produced by 3i in co-operation with the Economist Intelligence Unit, says these are areas of dynamic growth that fit the goal of private equity houses whose criteria include high non-cyclical growth, steep margins and multiple markets.

According to the report, the ready-meal sector could be one of the most active categories for consolidation and development, while functional foods is an area where private equity can bring skills for transferring technology and research into commercial products.

“Given well-managed businesses, with good functional food products and an educated consumer base, the concept will cross into all food categories, far beyond the current focus,” said Keith Ellis, 3i global head of food and drink.

Private equity investment in Europe’s food and drink sector jumped last year from E2.7bn in 2001 to E4.5bn while overall investment volumes fell.