L.E.K. Consulting, in a report on the food and beverage industry earlier this year, noted that there is a fight for consumer dollars in the industry amid an improving economic environment, rising consumer confidence and bullish expectations for growth.
The consulting firm further notes in its report that the industry is seeing interest from unlikely places such as Silicon Valley venture capitalists and private equity players. International companies targeting the U.S. market are also looking at the industry, according to the L.E.K. Consulting report.
The report also notes that 2014 was an interesting year for the food and beverage industry, with several brands taking the market by storm. Another major theme of 2014 was consolidation.
According to L.E.K. Consulting, consolidation affected every part of the food value chain. The trend has continued in 2015 as well.
Indeed, companies are looking to capitalize on the strength of their balance sheet to make these acquisitions. Another factor that has contributed to rising M&A activity is low interest rates.
In fact, there had been expectations of a rate hike in the second half of this year and therefore several companies completed deals before an anticipated rate hike to take advantage of favorable funding terms available.
Going forward, the ongoing improvement in the U.S. economy augurs well for the food and beverage industry. This morning, an emerging player in the beverage industry reported some positive news.
Based in Denver, Colorado, The Pulse Beverage Corporation (OTCQX:PLSB) is an emerging beverage company, offering beverage brands that are great in taste but low in calorie. PLSB is the maker of Natural Cabana(R) Lemonades, Limeades, and Coconut Waters and PULSE(R) Heart & Body Health functional beverages.
This morning, PLSB announced that it has secured distribution of all Natural Cabana(R) products through Mahaska Bottling Company, a major beverage brand bottler/distributor based in Iowa. Mahaska distributes in 157 counties in Nebraska, Iowa, Kansas and South Dakota. The counties have a total of four million consumers.
Commenting on the development, Robert E. Yates, CEO of Pulse Beverage, said that the company is extremely pleased to expand its distribution system through an established, well-respected, major beverage brand bottler/distributor. Yates further said that Mahaska will deliver the company’s brands to many new retailers within its large geographic area to include chain stores that it could not previously deliver to.
Even with the positive news, shares of PLSB are down on the day and stuck near the bottom end of their 52-week range trading at $0.09725 per share in mid-afternoon trading on Tuesday.
