Food maker deals at a glance
- Typical buyers
- Larger food companies, brand portfolios, private equity groups, distributors and strategic competitors
- What lifts the price
- Placement in regional or national grocery chains, strong gross margins, food safety certification, spare capacity
- What pulls it down
- One retailer or distributor carrying sales, heavy promotions to hold shelf space, recipes only the founder knows
- Paperwork buyers ask for
- Sales by account and product, trade spending, supplier contracts, food safety audits, trademarks
- Watch for
- Sales tax on production equipment in an asset sale
Where Your Products Sell
A buyer will ask for sales by retailer, distributor and product. Placement in regional chains and national natural food stores shows the brand can travel beyond the Northwest.
Online sales count too, but buyers will want to see repeat customers and the cost to acquire them.
Margins After Promotions
Grocery placement often comes with slotting fees, promotions and discounts. Buyers want to see gross margin after those costs, not before.
A product line that keeps its margin without constant promotion is worth more.
Production and Food Safety
Whether you make products yourself or use a co packer, buyers will review capacity, food safety audits and supplier agreements.
Written recipes and procedures matter. A buyer cannot rely on the founder's memory after closing.
Production equipment is a tangible asset, and in an asset sale Washington retail sales tax generally applies to it. See sales tax on equipment in a business sale.
Who Buys Specialty Food Companies
Larger food companies buy brands to fill gaps in their lineup. Brand portfolios and private equity groups buy companies they can grow through wider distribution. Distributors sometimes buy brands they already carry.
Strategic buyers often pay more, because they can cut costs and add distribution right away.
Preparing for Diligence
- Sales and gross margin by product and by account for three years
- Trade spending and promotion costs by retailer
- Food safety audits, certifications and any recalls
- Supplier and co packer agreements
Growth a Buyer Can See
Buyers pay for growth they can believe. Show which retailers are expanding your placement, which products sell through without promotion, and where the brand has room to go.
A clear one page summary of that story helps a broker present the company well.
The Brand Belongs to the Company
Make sure trademarks, packaging designs, domain names and social accounts are owned by the company, not by you personally. Buyers will check.
For how food companies are priced, read business valuation in Seattle. Then use the price check form or call (206) 555-0171.