Why Private Equity Is Feeding on Better-for-You Snacking Brands in 2025

The snack & confectionery sector continues to attract strong PE interest, driven by enduring consumer demand for convenience and healthier options. The PE deals highlighted—such as those by EagleTree (NuTrail), Kharis (KoRo), Fulcrum (Sunco Foods), Legacy Bakehouse/Benford (Classic Cookie), and especially the $795 million sale of Simple Mills to Flowers Foods—reflect a thesis focused on brands that can scale rapidly, align with health/sustainability trends, and offer promising exit opportunities. [1][3]

The Simple Mills deal stands out in several dimensions. With 2024 net sales around $240 million and year-over-year growth of 14 %, Flowers Foods’ acquisition incorporates high growth, better-for-you positioning, and strong distribution (over 30,000 retail outlets). [3] The valuation implies a multiple that is modest among top CPG exits, but clearly premium over many smaller snack brands lacking national reach or clean-label credentials. PE firms increasingly see such profiles as necessary to generate returns, particularly in an environment of rising input, regulatory, and labor costs. [1][3]

On the macro side, UK data shows a paradox: according to BDO, 95 % of food & drink manufacturers feel confident about their prospects, up sharply from previous years, signalling resilience and sectoral optimism. [1] But Q3 reports from the UK’s Food & Drink Federation show confidence dropped to -60 %, driven by cost pressures, regulation fears, and falling consumer demand. [5] More broadly, SNAC International estimates the U.S. snack market grew about 4.8 % to $156 billion, with healthier claims (organic, low-sodium) rising 12 %, and innovation in flavors, portion control, and packaging accelerating. [2]

Strategic implications for PE and strategics: brands satisfying health, transparency, sustainability, and innovation metrics are commanding premium valuations. Scaling distribution (particularly into mainstream retail) adds significant value. Regulatory risk is intensifying—especially in the EU/UK—and inflation in input, labor, and packaging is compressing margins unless brands can pass through cost or deliver efficiency. PE investors should scrutinize operational scale, supply chain resilience, consumer loyalty, and regulatory compliance as much as growth trajectory.

Open questions include: Can snack brands maintain margins amid rising costs without eroding brand integrity or increasing price too sharply? How will regulatory changes in sugar/fat labeling, trade policy, and environmental mandates affect product formulation and supply chains? Will the trend towards functional/snacking overlap with meal replacement or wellness segments increase competitive pressure? Lastly, with macro uncertainty, will PE firms maintain deal flows or shift back to smaller bolt-on acquisitions?