Key takeaways:
Two deals announced in Q2 could together redraw the global flavor and specialty ingredients map: McCormick’s $44.8 billion combination with Unilever Foods and Ingredion’s $5.0 billion acquisition of Tate & Lyle.
Better-for-you brands continued to command premium valuations, with Marzetti’s $400 million acquisition of Bachan’s pricing a brand at roughly 4.6 times its trailing annual revenue.
According to Capstone Partners’ April 2026 food M&A update, deal volume is up 66.7% year over year and running on pace with the seven-year annual average, suggesting a market that has worked through the slowdown of 2025 and is moving again.
Food M&A found its footing in 2026
After a 2025 that most deal-makers in the food sector would rather forget, the volume rebounded sharply in early 2026. Capstone Partners reported in April that food M&A activity through the first quarter ran 66.7% ahead of the same period last year, with YTD deal counts tracking close to the seven-year annual average. That rebound comes from sellers who spent 2025 waiting for buyer expectations to improve, and buyers with strategic imperatives that couldn’t wait any longer.
The biggest deals of Q2 were not about scale for its own sake. They were about capability. The McCormick/Unilever Foods combination is a bet that flavor-focused companies command better multiples and growth rates than diversified consumer goods conglomerates. Ingredion’s move on Tate & Lyle is a bet that specialty ingredient platforms with sugar reduction and texture expertise are worth far more than commoditized starch businesses. Sysco’s pursuit of Restaurant Depot is a bet that distribution reach into independent restaurants is the most defensible moat in foodservice.
Capstone also noted that 67.7% of branded acquisition targets in early 2026 carried positioning in better-for-you, high-protein, international, or sustainability categories, a record high share since 2019. Legacy players are not just buying growth. They are buying credibility in categories where they lack it.
The quarter’s largest deal creates a new global flavor company
The most consequential transaction of Q2 was announced on the last day of Q1, but it defined the quarter. On March 31, McCormick and Unilever announced a $44.8 billion combination in which Unilever would contribute the majority of its Foods business to a newly combined company, structured as a Reverse Morris Trust. Unilever and its shareholders will hold 65% of the combined entity’s equity and receive $15.7 billion in cash. McCormick shareholders will hold the remaining 35%.
The combined company would carry approximately $20 billion in fiscal year 2025 revenue, uniting McCormick’s spices, herbs, and condiments platform with Unilever Foods’ portfolio, which includes Hellmann’s mayonnaise, Knorr sauces and seasonings, and a raft of regional brands. The companies project $600 million in annual run-rate cost synergies, with roughly two-thirds realized by year two.
Unilever has spent years trying to sharpen its portfolio around faster-growing, higher-margin categories. Ice cream has already been carved out. A separate beauty and personal care company has been discussed. Foods, which generates solid cash but has grown slower than Unilever’s other divisions, fits the same “managed exit” pattern. McCormick gets meaningful global scale and brand breadth it could not have built organically. The combined entity will face antitrust scrutiny in multiple jurisdictions, and some brand disposals are likely required before regulators clear the deal. The companies expect a close sometime in 2026 or early 2027.
For food manufacturers and co-packers supplying either company, the transition period is an opportunity as much as a risk. Supply agreements will be reviewed. Rationalizations are coming. Vendors with meaningful relationships on both sides of this combination will be better positioned than those with only one.
Ingredion bids $5 billion for Tate & Lyle, and boards agree
The second transformative ingredients deal of the quarter was Ingredion’s announced all-cash acquisition of Tate & Lyle for approximately £3.7 billion ($5.0 billion) in total enterprise value. Tate & Lyle’s board unanimously recommended the offer at 595 pence per share, a 59% premium to the company’s closing price on May 13. The combined group would generate approximately $9.9 billion in revenue and $1.8 billion in adjusted EBITDA.
This deal has been building for years. Tate & Lyle sold its commodity sweeteners and industrial starches business in 2021 to focus entirely on specialty ingredients. It acquired CP Kelco in June 2024 to deepen its hydrocolloids portfolio. The result is a business that looks very different from the sugar refiner Tate & Lyle was a decade ago, and far more attractive to a company like Ingredion, which has its own texture and sugar reduction ambitions.
Ingredion CEO James Zallie noted, ““The combined business will be better positioned to serve customers’ needs for the development of great-tasting, healthier and affordable food products that consumers demand.” In other words, the demand side of this equation (food manufacturers reformulating products under pressure from consumers, regulators, and GLP-1 adoption) has created a durable growth engine for companies that own the right ingredient capabilities. The Tate & Lyle acquisition puts Ingredion right at the center of that engine.
Tate & Lyle’s share price spiked 45% on announcement day, a clear indicator of how the industry reads the strategic fit. Pending regulatory clearance, this deal will close in 2027.
Sysco bets $29 billion on independent restaurants
On March 30, Sysco announced a definitive agreement to acquire Jetro Restaurant Depot. Jetro Restaurant Depot generated approximately $16 billion in revenue and $2.1 billion in EBITDA in 2025, operating 166 large-format warehouse stores serving more than 725,000 independent restaurants and foodservice operators across 35 states.
The deal dominated Sysco’s April 28 earnings call, where management detailed $250 million in projected net cost synergies and plans to open more than 125 new Restaurant Depot locations over time. The transaction is expected to close by approximately Q3 of Sysco’s fiscal 2027, pending regulatory approval.
Sysco’s current broadline distribution model serves independent restaurants through a sales-and-delivery structure. Restaurant Depot serves the same customers through a cash-and-carry warehouse model where operators come directly to the store and buy at low prices without a delivery premium. The two channels don’t fully overlap. Independent restaurant operators use both, often for different product categories and purchase occasions. Combining them gives Sysco a comprehensive view of the independent restaurant customer and eliminates a competitor for wallet share.
For food manufacturers supplying both Sysco and Restaurant Depot today, this consolidation is worth monitoring. A combined entity with that much purchasing volume and route-to-market reach will negotiate aggressively. Supplier relationships built with one channel may need to be rebuilt under unified ownership.
Premium multiples are holding in better-for-you brands
Two brand acquisitions in Q2 illustrate that the best-positioned better-for-you companies are still clearing premium multiples, even in a more disciplined deal environment.
On May 1, The Marzetti Company completed its $400 million acquisition of Bachan’s, the Japanese barbecue sauce brand founded in 2019 by Justin Gill on his grandmother’s family recipe. Bachan’s generated approximately $87 million in net sales in 2025, which means Marzetti paid roughly 4.6 times trailing revenue. The three-year compound annual growth rate between 2022 and 2025 was 48%, driven by expanded retail distribution and category demand for globally-inspired, clean-label condiments. Marzetti, which has built a strong position in licensed restaurant sauces including Chick-fil-A and Buffalo Wild Wings, specifically wanted a brand it could own outright. Bachan’s gives the company a clean-label, consumer-beloved platform to build into adjacent applications including marinades, glazes, and dips.
Earlier in April, Laird Superfood completed its acquisition of Terrasoul Superfoods for $48 million, plus a $5 million earnout tied to performance milestones. Terrasoul, a vertically integrated superfoods brand, generated $65.8 million in revenue in 2025. Alongside the acquisition, Laird Superfood received a $60 million convertible preferred equity investment from Nexus Capital, funding the deal and supporting continued growth. The combination brings together two brands competing in the functional and performance nutrition space, where demand for high-quality, minimally processed superfoods continues to outpace the broader grocery market.
Together, these two deals reinforce that brands with real growth velocity, differentiated positioning, and clean-label credentials are still attracting strategic buyers willing to pay above market multiples. The floor on those multiples may have risen with input costs and broader macro pressure, but the ceiling on well-positioned brands hasn’t.
Bakery ingredients consolidation is reshaping a century-old sector
One of Q2’s quieter but most strategically significant pending deals was a definitive agreement for Puratos to acquire Dawn Foods, subject to regulatory approval and expected to close by the end of 2026.
Both companies were founded within a year of each other (Puratos in 1919, Dawn Foods in 1920), both are family-owned, and both serve professional bakers, pastry chefs, food manufacturers, and retailers. But Dawn Foods built its business on American-style sweet baked goods formulations, with deep knowledge in donuts, muffins, cookies, and brownies and a large-scale North American distribution network. Puratos built its business on R&D-led ingredient technology, fermentation, sourdough, and chocolate craftsmanship, operating in more than 100 countries.
Puratos CEO Pierre Tossut described the combination as bringing together complementary innovation engines: Dawn Foods’ application-led product creativity alongside Puratos’ long-term food science capabilities. For customers in the commercial baking and ingredients space, the practical implication is a supplier with greater breadth across the spectrum from traditional bulk mixes to advanced biotechnology-enriched sourdough solutions. Regulatory review is underway across multiple markets.
What Q3 may bring
Three of this quarter’s largest deals are pending close: McCormick/Unilever Foods, Sysco/Restaurant Depot, and Puratos/Dawn Foods. Ingredion’s acquisition of Tate & Lyle will enter regulatory review across multiple jurisdictions. Any one of these closing events would reshape competitive dynamics in its category.
Capstone expects the better-for-you deal thesis to hold throughout 2026, with legacy players continuing to shed trend-trailing brands and private equity continuing to build platforms in BFY, high-protein, and functional food categories. Tariff uncertainty remains a structural headwind for cross-border deal economics, particularly for deals with significant import exposure. That uncertainty has already pushed some European buyers to favor North American manufacturing assets over import-dependent brands.
The food M&A market entering Q3 is not back to 2022 levels, but it is active, selective, and increasingly defined by buyers who know exactly what capability they are buying and why. For food manufacturing leaders watching the competitive landscape, Q2’s M&A activity provides clarity about what gets acquired at a premium and what doesn’t.
