There is safety in numbers, profits too it seems as 2018 looks to be the year of mergers and acquisitions.
Continental kicked off the year with its acquisition of Brighton, MI-based 24 Hr. Vending LLC. As part of the acquisition, the entire 24 Hr. Vending LLC staff joined the Continental team. This was the second acquisition for Continental since late 2017 contributing to its proclaimed status as Michigan’s largest food management company. It also had one of the last acquisitions of the year (as of press time) with United Vending, its largest acquisition to date.
ending giant Five Star Food Service continued its buying spree in 2018 with Mid South Services and Eagle Vending. Both were Canteen franchises that brought micro markets, vending and office coffee service to the business.
Coffee plays big role
Operations weren’t the only businesses affected by consolidation. In 2018, there were a number of large mergers and partnerships among manufacturers and suppliers of products and equipment. One the biggest was the merger of Keurig Green Mountain and Dr Pepper.
On January 29 of this year, Dr Pepper Snapple Group, Inc. and Keurig Green Mountain, Inc. announced that the companies had entered into a definitive merger agreement to create Keurig Dr Pepper, a new beverage company of scale with a portfolio of iconic consumer brands and unrivaled distribution capability.
This wasn’t the only soda giant to align itself with the coffee segment. Late in the year, The Coca-Cola Company announced it was acquiring Costa,a well-known coffee brand in Europe, Asia Pacific, the Middle East and Africa. Not only did it gain the brand and various cafes around the globe, it also now likely owns the Costa coffee vending machines which provide the smells and sounds of a coffee shop while brewing the user’s coffee.
Let’s not forget that in March the EVOCA group bought the assets of VE Global Solutions, LLC, which was already promoting EVOCA products in the North American market including Necta, Wittenborg and SGL machines. The agreement stipulates that all VE employees be transferred over to EVOCA USA and that EVOCA USA would operate from the VE site. It is a sign EVOCA believes in growing its presence in the North American coffee market, especially in office coffee service.
Fast forward to October when Lavazza made a move that would surprised many. It purchased the Mars Drinks Business, which includes the Flavia and Klix single cup brewing systems, from Mars, Incorporated. Single-cup business in office coffee service (OCS) and vending has been increasing and this acquisition is a way for Lavazza Group to strengthen its position within the convenience services market through existing equipment lines.
Pay to partner
What’s in a name? If the name is Starbucks, it’s $7.15 Billion dollars. That is how much Nestlé agreed to pay for the perpetual rights to market Starbucks consumer and foodservice products globally, outside of the company’s coffee shops. Nestlé plans to use this partnership to continue its growth in North America with leadership positions in the premium roast and ground and portioned coffee businesses.
Looking back, 2018 was filled with change, but much of it to create stronger companies. They see opportunity in the U.S. market, much of it around coffee, and that’s a positive sign for 2019.
