We analyzed where 14 of the top consumer packaged goods brands and investors are investing in private markets.

Dollar funding to private consumer packaged goods companies increased 8x from 2011 to 2015, as new product categories, consumer demographics, and lifestyle changes shake up the constantly-shifting CPG landscape.

Over the same period, corporate players focused on CPG, including The Coca Cola Company, Unilever, General Mills, and Anheuser-Busch InBev, have been placing bets on private companies or acquiring companies, as they search for innovation or new product lines and markets to exploit.

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We used the CB Insights’ Business Social Graph tool, which visualizes how investors and companies are related, to analyze the funding and M&A activities of 14 major CPG giants along with their venture capital arms. These 14 investors have been most active among CPG players in the private market space in the five years since 2011. The companies on the list include:

  • Unilever and Unilever Ventures
  • Anheuser-Busch InBev
  • The Coca-Cola Company
  • Danone
  • Nestle
  • General Mills and General Mills Ventures
  • The Estee Lauder Companies
  • ConAgra Foods
  • Campbell Soup Company and Acre Ventures
  • L’Oreal
  • Coty
  • P&G

Aggregate equity investments backed by the 14 corporates and corporate venture capital groups (CVCs) on the list reached a five-year high of 9 in 2015, nearly double the deal count seen in 2014.

In Q1’16 alone, these corporations backed 4 startups, including juice manufacturer Juicero and advertising startup MirriAd. (In the Business Social Graph below, investments are in blue, and M&A is in orange.)

BSG_CPG_new_April2016_1

Equity funding highlights

  • The most active investor over the last 5 years was Unilever Ventures, which participated in 18 equity funding deals to private companies. The CVC placed most of its bets on companies in the internet and mobile software industries.
  • The Coca-Cola Company participated in 8 equity funding rounds to private companies, and half of those deals were to food & beverage companies in various markets: two UAE-based companies, soda-drink producer Rani and malt beverage company Barbican; they also backed California-based juice manufacturer Suja Life; and Nigeria-based Chi.
  • In fact, food and beverage companies took the highest number of equity deals out of any specific industry, taking one-fourth of the over 35 deals visualized in the graph above. This year, Acre Ventures participated in the previously-mentioned Series B round raised by Juicero. General Mills Ventures backed cheese manufacturer Good Culture.
  • Around 25% of the deal share over the last five years went to early-stage startups raising seed/angel or Series A rounds. In comparison, mid-stage startups (Series B or C) accounted for 23% of the deals, and late-stage startups (Series D and E+) received 17% of the deals. In addition, there were over 10 rounds in which the CPG investors took a large minority stake in a company.
  • P&G participated in a round raised by Cintrifuse, a Cincinnati-based business accelerator focused on hig-tech companies and job creation.

Major M&A highlights

  • There were 60 M&A transactions in the 5 years, with 15 each in the last two years. Anheuser-Busch InBev was the most active acquirer, with at least 15 acquisitions, out of which the overwhelming majority were made since 2014.
  • Over 60% of the M&A activity was in the food & beverage sector. Just in 2015, Anheuser-Busch InBev acquired 6 alcoholic beverage companies — including Camden Town Brewery, Elysian Brewing, and Four Peaks Brewing — and took a majority stake in Virtue Cider. ConAgra Foods and General Mills made 5 acquisitions in food and beverage.
  • 23% of M&As involved other companies in other CPG categories (including personal care products and health and wellness). The Estee Lauder Companies made 5 acquisitions in the personal care products category, including Le Labo and GLAMGLOW. Coty acquired 3 companies in the same space, including Hypermarcas, Lena White, and Bourjois.

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  • Brendan DUNPHY

    Any evidence that these CVC’s are reducing internal R&D and product development i.e. is there a strategic shift away from internal innovation to external?

  • Xavi Ametller

    There are studies showing that corporations involved in CVC increase their internal R&D efforts as well.