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Market Share is Shifting Globally

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RESTAURANT M&A:

MORE THAN FINDING AND MAKING DEALS

Capital is cheap and plentiful. Also in abundant supply: disruptive forces of innovation and other industry dynamics that cause one to question whether now is the time to double down or take some chips off the table.

Combined, these motivations are like twin turbojets accelerating acquisitions and consolidation. It’s in times like these that we see massive shifts in market share and meaningful change in capitalization tables.  

We've been saying for a while now that M&A activity in the foodservice space would continue to grow. And it has. With more than 30 deals in the U.S. alone in the first half of this year, consolidation continues to be a theme across the industry. 

INDIGESTION AT INTEGRATION 

The timing for both bold buyers and smart sellers seems so well-aligned at this moment that it is utterly understandable for the M&A fever to be catching across geographies, cuisines, categories, and ownership types — and burning white-hot from foodservice tech startups and corporate venture capital initiatives to budding emerging brands and even the consolidation of mature and distressed brands around the world.

This 'eat-or-be-eaten' period is for business what the hour before dusk is in the animal kingdom; every creature that can crawl, fly, or swim gets hungry and stirs in that golden hour. For foodservice businesses and financial sponsors considering M&A, the next 18 months look like they will be the golden hour.

However, it’s not enough to just source and diligence a great deal, it’s also essential to get post-acquisition integration initiatives (plans, teams, expectations, and execution) pulled together exceptionally well so that a great bite at the apple does not turn out to be a deadly gulp (equally dangerous for both buyer and seller to get it wrong on a deal significant in the timelines of companies and careers of executives that served it up).
 

CATCHING A FALLING KNIFE 

Mike Tyson said it best ...

Meaning, you go into the ring with a great plan for what will happen after that ting of the bell, but both spectator and gladiator know it gets a lot messier after the announcements are made.

Integrating companies, functional units, cultures, and communicating internally and externally — on the one hand with the grace of a buoyant ballerina, and on the other the block-and-tackle determination of an undeterred juggernaut charged with pushing implementation plans ahead — can be a bit of an oxymoron.

If you’re doing it right, it will feel a bit like catching a falling knife (but in slow motion). Beyond hunting and bagging a brand, business leaders must be prepared with exceptional and dedicated teams focused on a smooth and seamless post-acquisition world for shareholders and stakeholders alike. It’s entirely too taxing on the day-to-day teams to shoulder them with the responsibilities of both laying new tracks while keeping trains moving and attempting a knife throwing and catching exposition.
 

OPTIMISTIC, PESSIMISTIC, OR REALISTIC: WHAT'S THE DIFFERENCE?

The optimist believes anything is possible. The pessimist believes everything will fail. The realist finds a way to best balance risk, opportunity, and responsibility; honoring and helping enable what others hoped could be while planning ahead of and avoiding pitfalls which could jeopardize their shared potential to find a better way forward for all involved. 

LEARN MORE ABOUT HOW WE CAN HELP

COUNTDOWN TO ZURICH

If you haven't already, be sure to register for the 20th Annual European Foodservice Summit — Aaron's going to be talking about how to stay ahead of international restaurant trends, how big data favors big corporations, and who owns the new market of ideas.

The Summit is always a great time, and we'd love to see you there.

AN INDUSTRY SHOUT-OUT TO DENNY MARIE POST

When you scan the landscape of accomplished restaurant industry leaders, Denny — now-retired CEO of Red Robin — will certainly show up on your radar. And, when you zoom in closer, you will quickly recognize and appreciate that she is one of the brightest stars in the foodservice universe for good reason.

Believe in Denny. She can and will help advance not only those that are on board but will also do wonderful things to advance our industry with the chapter she writes next.

Denny's also working with the Women's Foodservice Forum to "accelerate the advancement of women leaders in the food industry" — a cause our firm (and especially the women leaders in it) respect and admire greatly. 

IN THE NEWS

Western brands expanding into China still have significant profit potential. 

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Aaron Allen, a third-generation restaurateur, has personally led more than 2,000 senior-level strategy engagements across 70 countries and 6 continents and is one of the most frequently quoted and sought-after restaurant experts in the world. Interested in working with Aaron Allen & Associates? Let's do something great together.

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Aaron was honored to be included among LinkedIn’s Top Voices 2018, a small group of thought leaders credited with sparking engaging conversations on the world’s largest professional networking site. He was one of only two voices in hospitality (the other being Arne Sorenson, the CEO of Marriott International), and the only in foodservice. Follow him to get the latest updates on the global foodservice industry.​

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