M&A in the Consumer Products Sector: Key Trends Shaping 2025

Mergers and acquisitions (M&A) in the consumer products sector have always been shaped by evolving consumer needs, macroeconomic conditions, and competitive dynamics. But 2025 marks a turning point. Rising interest rates, inflationary pressures, and shifts in consumer behaviour have created a market that is more complex yet full of opportunity.

Drawing from insights shared by industry leaders Frank Dunne (RSM Ireland) and Eric Fougedoire (RSM France), this article explores what is driving dealmaking today, the challenges investors face, and where the sector is heading next.

1. M&A Activity in 2025: Stable, Selective, and Value-Focused

The first half of 2025 has shown steady deal activity, but with stricter filters. Investors continue to prioritise premium, category-leading brands that demonstrate:

• Strong brand equity
• Route-to-market control
• Scalable models (retail, export, hybrid)
• Clear growth potential

High interest remains in premium food, wellness, cosmetics, and household essentials sectors that have shown resilience despite economic pressure.

Corporate buyers are leading most transactions, using their strong balance sheets to pursue strategic acquisitions. Meanwhile, private equity firms are more cautious, focusing on bolt-on acquisitions that expand existing portfolios.

2. Due Diligence Is Deeper and More Data-Driven

Due diligence in 2025 is no longer a quick process it’s a deep investigation into business fundamentals. Deal cycles are extending to 12–16 months, driven by:

• The need for real-time visibility into recent trading
• Demand for robust, data-backed forecasts
• Increasing scrutiny over cash flow and working capital
• Variability in quarterly performance

Data analytics now plays a crucial role, helping buyers validate assumptions and build independent investment cases. But despite technological improvements, inconsistent trading and cash conversion challenges continue to delay deal closure.

3. Valuation Alignment: The Toughest Negotiation Point

One of the most persistent challenges in M&A today is valuation alignment.

Buyers are cautious and disciplined, especially when historic performance doesn’t reflect current reality. Sellers, on the other hand, still anchor expectations to pre-COVID EBITDA multiples creating a wide gap.

Key issues affecting valuation include:

• Slowing organic growth
• Margin pressures
• High interest rates
• Trading volatility

As a result, only businesses with clear growth levers, strong fundamentals, and stable margins are commanding premium valuations.

4. The Cost-of-Living Crisis Is Reshaping Demand and Deal Value

The cost-of-living crisis in 2025 has dramatically altered consumer spending patterns. Two clear consumer groups have emerged:

• Budget-focused shoppers choosing essentials and private-label alternatives
• Affluent consumers are maintaining or increasing premium purchases
  

Between these extremes, a powerful new segment is thriving: accessible premium brands offering quality, purpose, functionality, and affordability.

This category is proving attractive for investors due to its resilience and wide appeal.

Subsectors are responding with targeted innovation:

• Food & wellness: clean-label, functional, health-oriented products
• Cosmetics & homecare: sustainability, ethical sourcing, supply chain strengthening
  

Pricing strategy, product positioning, and brand purpose are becoming essential elements of deal value.

5. How Consumer Behaviour Is Rewriting M&A Strategy

Consumers today are not just buying products they’re buying meaning, connection, and experience. This is reshaping how investors evaluate opportunities.

Key consumer-driven value factors:

• Authentic brand storytelling
• Personalised engagement
• Omnichannel presence
• Immersive retail experiences
  

The “experience economy” has turned physical stores into experiential hubs, strengthening brand loyalty and making such businesses prime acquisition targets.

D2C and e-commerce models remain attractive when they demonstrate:

• Strong customer acquisition economics
• Controlled logistics
• High retention rates

Digital maturity is increasingly becoming a core valuation driver.

6. Private Equity: Focused, Cautious, and Strategic

PE activity in the sector is gradually increasing, but investors are being selective. Areas with the most activity include:

• Functional food & beverages
• Health-focused personal care
• Sustainable packaging

PE firms are favouring strategic bolt-ons that allow platform companies to scale capabilities, expand into new geographies, or strengthen product lines.

Earnout structures have become vital to bridge valuation gaps and ensure alignment between buyers and sellers.

7. What Lies Ahead: A Steady but Selective M&A Market

Experts expect that overall M&A activity will remain similar to the first half of 2025. The mid-market will continue to drive momentum, with buyers focusing on:

• High-quality, brand-led businesses
• Scalable products
• Strong financial fundamentals
• Clear value propositions

The key takeaway: strong brands with consistent performance will continue to attract serious investors, while under-prepared sellers may struggle to justify valuations.

Early preparation, disciplined financial reporting, and strategic positioning will be critical for companies aiming to exit or raise capital.

Conclusion

2025 is a market where discipline wins. Buyers are selective, valuations are scrutinized, and deal timelines are longer but opportunities remain strong for businesses that are ready.

Founders and leadership teams must focus on:

• Strengthening unit economics
• Improving cash conversion
• Clarifying their value proposition
• Investing in brand authenticity
• Preparing comprehensive diligence materials early

Those who prepare ahead of time will not only attract better buyers but also command better valuations.

If your organization is evaluating M&A opportunities or preparing for an exit, our team can help you navigate the evolving market landscape with clarity and confidence.

FAQ’s