All data gathered from PitchBook Data, Inc., as of Jan. 14, 2026 

While 2025 began more cautiously than anticipated due to headwinds from tariffs and geopolitical uncertainty, deal momentum in the manufacturing and distribution (M&D) industry pushed past these challenges, resulting in many large successful closes, driven most notably by strategic acquisitions. Debt financing also continues to play a meaningful, if more measured, role in 2025 like it did in 2024. 

M&D Capital Invested & Deal Count

Top 10 M&D Deals

Among the top 10 M&D deals that closed, five were mergers/acquisitions. Other significant debt transactions included Mars (Food Products) ($26 billion), Quikrete Holdings ($10.9 billion), and Ford Motor ($10 billion). 

Venture capital remained active in the M&D industry, with LvlUp Ventures, Alumni Ventures, Morrison Seger, SOSV, and Andreessen Horowitz leading in deal volume.

Capital Invested by Primary Industry Sector  

Industry trends driving M&D M&A activity

M&D deal activity is increasingly shaped by structural shifts in the industry. Reshoring, labor constraints, and automation are not isolated trends – they are interconnected forces influencing valuations and strategic priorities. Buyers are placing a premium on businesses that demonstrate resilience through localized production, operational efficiency, and technology adoption. In short, companies that can navigate labor shortages and leverage automation to grow sustainable earnings are the more attractive targets in today’s market. 

Reshoring sparks labor challenges 

Manufacturers are bringing production back to the U.S. to strengthen supply chain resilience and reduce exposure to geopolitical risk. This move toward localized production is especially pronounced for high-value, complex goods where control and reliability matter most. 

While reshoring improves security and responsiveness, it also creates a new challenge: labor shortages. Many manufacturers struggle to find skilled workers as the talent pool shrinks due to an aging workforce, tighter immigration policies, and changing preferences for flexible work arrangements – conditions that traditional factory roles cannot easily accommodate. 

Labor shortages accelerate automation 

As companies compete for limited talent, automation and AI have moved from “nice-to-have” to mission-critical. Manufacturers are investing in robotics, industrial AI, and digitalization to maintain productivity and reduce dependency on manual labor. Industry 4.0 technologies – such as IoT-enabled equipment, digital twins, and predictive maintenance – are enabling smarter, more agile operations. 

Insights from our State of AI in Manufacturing Report 2025 reinforce this trend: over 70% of surveyed manufacturers indicated that AI adoption is primarily driven by workforce constraints and the need for predictive capabilities. The report highlights that AI is no longer experimental – it’s being deployed at scale for quality control, demand forecasting, and process optimization, making automation a cornerstone of competitive advantage. 

Workforce development: A strategic imperative

Technology alone isn’t enough. Companies are also prioritizing upskilling initiatives to prepare workers for advanced manufacturing environments. Investments in training programs and digital infrastructure reflect a broader commitment to align talent strategies with automation-driven processes. The goal: ensure that people and technology work hand in hand to sustain competitiveness. 

Together, these trends reshape not just how manufacturers operate, but how they create value. As reshoring, automation, and workforce shifts redefine operational strength, investors increasingly look to the commercial engine – pricing discipline, cost visibility, and sales execution – to turn that strength into predictable, scalable growth. This makes commercial excellence the essential next lever for value creation.

Commercial excellence in PE-backed manufacturing 

Private equity-backed manufacturing businesses face a unique challenge: driving profitable growth while building a platform that can scale through add-on acquisitions. In this environment, commercial excellence is not just about winning deals; it is about pricing discipline, cost transparency, and execution rigor that enable predictable margins and repeatable integration. 

When managing $25 million and more in revenue, and planning to double or triple that revenue through M&A, informal processes and institutional knowledge no longer scale. Without margin visibility and standardized commercial processes, every acquisition adds complexity instead of synergy. 

To succeed, businesses need to make several core shifts:  

• First, quoting and pricing discipline must evolve from static models and intuition-driven decisions to data-informed execution. Material, labor, overhead, and capacity assumptions should be embedded directly into the quoting process. Standardized margin targets and approval workflows help protect EBITDA while allowing flexibility for strategic customers, products, or end markets. 
• Second, cost accounting must provide true clarity. Manufacturers need accurate cost allocation by product family, customer segment, and production environment. Reporting should enable visibility into margin performance at the quote, order, and customer level – not just at the plant or P&L level. This insight directly informs pricing decisions, mix optimization, and capital investment priorities.  
• Third, sales operations must become the backbone of commercial excellence. Clear ownership of pipeline management, pricing governance, forecasting, and quote-to-cash processes improves predictability and accountability. Standardized sales playbooks –covering forecasting cadence, territory design, and incentive structure – reduce variability across sites and business units. Importantly, incentives should reinforce profitable growth, not volume at any cost.  

Fourth, CRM should serve as the integration engine, not just a repository. Deploy a platform like HubSpot not just for contact management, but as the single source of truth for quoting, pipeline, and customer data. Integrate CRM with ERP for real-time cost and inventory visibility, and use CRM workflows to enforce standardized processes across legacy and acquired businesses. 

Commercial excellence in manufacturing is not about adding layers of complexity; it is about building systems that enforce discipline and scale with growth. When pricing, cost accounting, sales operations, and CRM are aligned, manufacturers unlock predictable margins, faster integration, and a platform built to grow without operational strain.

Food and beverage M&A activity 

The food manufacturing sector has been a consistently active segment within M&D. In 2025, much of the deal activity was comprised of debt refinancings.

Top 10 F&B Deals

Notable food and beverage transactions during this period include the following: 

• Kellanova and Mars (as mentioned above) (Dec. 25): The long-awaited Mars’ $35.9 billion acquisition of Kellanova closed, adding a diversified global snacking and packaged‑food manufacturing network with operations in 20 countries and distribution in over 180 markets. 
• Albertsons Companies (Aug. 27): The company received $4 billion of debt on Aug. 27, 2025. The company was in talks to be acquired by Kroger (NYS: KR) for $25 billion on an undisclosed date. Subsequently, the deal was canceled on Dec. 11, 2024. Previously, the company completed a $750 million debt refinancing round on Feb. 6, 2023.  
• Southern Glazer’s Wine and Spirits (Jun. 25): Southern raised $5.35 billion of debt financing to support general business activity of the alcoholic beverage distributor.  
• JBS USA (Jul. 25): The company completed a $3.5 billion debt refinancing round used to manage debts and support corporate purposes. Previously, the company raised $1.75 billion in debt. 
• WK Kellogg (Sep. 25): The company was acquired by Ferrero International, via its financial sponsor Marlo, through $3.1 billion public-to-private LBO. The transaction is expected to help Ferrerro expand its portfolio by leveraging WK Kellogg’s resources to innovate and diversify its offerings, and reinvest in brands.  
• Pepsico (Feb. 25 and Jun. 25): A global leader in snacks and beverages, the company completed two $3.5 billion bond offerings, indicating the funds were to repay commercial paper and fund general corporate purposes rather than any intended acquisitions like its competitors.

F&B capital invested & deal count 

The overall deal activity in the food and beverage sector in 2025 had 2,108 transactions totaling $192.3 billion in capital deployed. This compares to 2,750 deals and $132.3 billion invested during 2024. Despite the lower deal count, the average deal size rose significantly – reaching $91.2 million in 2025 versus $48.1 million in 2024, a trend similar to what we’re observing in the overall M&D industry. 

Venture capital continues to lead the number of capital investments in the food and beverage industry during 2025, with prominent investors such as LvlUp Ventures and Morrison Seger. However, private equity firms also made some notable investments during the same period, including firms like Shore Capital Partners, Freeman Spogli, and InvestBev.

Food and beverage trends to watch 

We have previously noted consumers’ focus on whole, minimal processed foods and that trend is here to stay. However, other trends are coming to the forefront. 

Protein takes center stage 

Protein continues to lead consumer demand, but the category has expanded well beyond traditional interpretations. High‑protein diets now incorporate a broader mix of options – from renewed interest in animal proteins to diversified plant‑based alternatives and protein‑forward snacks, beverages, and desserts. This shift is partly motivated by the increase in use of GLP-1 medications –which work best when paired with a balanced diet focused on lean proteins, vegetables, and whole grains – and reinforced by the new federal food pyramid(Opens a new window), which places greater emphasis on protein‑rich whole foods as part of balanced daily eating. Together, these forces signal a durable move toward protein as a foundational component of consumer purchasing decisions. 

Shift toward less alcohol and growth of non‑alcoholic alternatives 

Alcohol consumption patterns continue to evolve as more consumers – especially younger demographics – embrace moderation or abstention. This trend is driving rapid growth in non‑alcoholic beverages, including sophisticated zero‑proof cocktails, globally inspired flavors, functional drinks, and “better‑for‑you” carbonated options. 

This movement reflects a broader cultural shift toward intentional consumption, wellness‑oriented choices, and beverages that support mood, digestion, or energy without relying on alcohol. 

Premiumization in private label

U.S. consumer sentiment is a critical factor shaping the market. The University of Michigan’s Consumer Sentiment Index(Opens a new window) fell to 51.0 in November 2025, marking one of the lowest readings on record and a nearly 30% decline year‑over‑year. 

This reflects persistent concerns around affordability, elevated prices, and weakening household incomes. For manufacturers and retailers, the message is clear: consumers remain highly value‑conscious, and businesses must balance margin discipline with pricing, portioning, and quality strategies that still drive demand. This dynamic is contributing to the rise of premium-ized private label tiers – offering consumers perceived quality upgrades at more accessible price points. Insights from the November 2025 Private Label Manufacturers Association (PLMA) Show highlighted a clear move toward premiumization, where retailers now commonly offer three distinct tiers – good, better, and best – to meet a wider range of quality expectations. 

The top tier private labels increasingly feature elevated, upscale products with elegant packaging, enabling store brands to compete head‑to‑head with national labels. This shift signals that private labels are no longer synonymous with value alone; it is becoming a destination for innovation, quality, and aspirational experiences.

What’s next?  

M&D enters the coming year with measured optimism, supported by strong capital flows and clearer macro signals as interest rates ease and inflation stabilizes. Strategics may not continue to have the upper hand on valuations, and the geopolitical and regulatory uncertainty will not go away, but deals will still get done and may require more thorough due diligence processes to ensure minimal to no surprises for the transaction to close.  

Despite a slower and more uncertain start to 2025, the manufacturing and distribution sector demonstrated meaningful resilience, with nearly $1 trillion in capital across equity and debt deployed across a smaller but more strategically focused set of transactions. Mega‑deals such as Mars’ acquisition of Kellanova, Amcor’s purchase of Berry Global, and major moves in construction materials, building products, and automotive underscore continued appetite for scaled, integrated platforms with durable supply‑chain and operational advantages. At the same time, structural forces – including reshoring, labor shortages, and accelerating automation – are reshaping what makes an M&D business attractive, elevating the value of clean financials, strong cost visibility, flexible production capacity, and commercial discipline. As interest rates ease and confidence gradually returns, well‑prepared operators with resilient operations and investment‑ready processes are positioned to benefit most from the next phase of M&A activity. 

Looking to maximize value in your next deal? 

CohnReznick’s Transactions, Mergers & Acquisitions Advisory Services team can help you navigate complexity with confidence.