By Danai Alexaki 

 

The investment grade places Greece on the "radars" of foreign capital, with the food industry gathering high interest.

 

Despite the fact that the past decade has seen numerous deals in the food and beverage industry, the outbreak of the pandemic has further strengthened the attractiveness of the market.

 

As international analysts say, "yields are predicted to be more profitable because the food sector is on the verge of a transition".

 

The pandemic has shown the fragility of global food systems, therefore an asset that produces food in any geographical area, at any time of the year combined with the development of a flexible logistics mechanism evolves into a valuable asset. At the same time, strategies for food security and protection of the food supply from the effects of climate change are expected to further increase the sector's goodwill.

 

Domestic market analysts and business consultants say that "the big ‘bargain’ in the food industry has begun and large investors are looking for opportunities by constantly scanning the domestic market."

 

At the forefront of investment interest are the food categories related to snacks, vegetable products, purely agricultural products, as well as start-up innovative ventures.

 

Meanwhile, the energy crisis and the high cost of borrowing accelerate the developments, as they put on the “radars” of investors the cases of businesses that are struggling to keep their activity sustainable

 

At the same time, however, the "family" nature of businesses is a key factor inhibiting the entry of foreign capital. The investors “translate” this fact into a time-consuming negotiation process.

 

Equally important to promoting agreements is maintaining a stable political environment. The election may lead foreign investors to put their expansionary plans on hold.

 

Strategic Investors vs Funds

 

A particularly important parameter that industry analysts and domestic players are focusing on is the profile of foreign capital wishing to enter or expand their investment presence in the market.

 

The agenda of investment funds and strategic investors in the long term has significant differences.

 

The ideal for the domestic industry would be that the "invasion" of foreign capital was intertwined with a long-term growth vision.

 

The domestic food market can evolve into a protagonist internationally through targeted capital placement. Analysts point out that "the domestic food industry has the advantage of the quality of the Mediterranean diet. The fish farming industry in which Spanish funds have entered is a typical example of foreign funds choosing to invest strategically in Greek businesses that have significant growth prospects."

 

The investment interest of funds is taken for granted for the food sector with the information stating that the fermentations are continuous.

 

CVC Partners focuses on all the opportunities that "click" in Vivartia's portfolio of activities. The aim is to strengthen all the categories in which the group's brands are present.

 

Accordingly, the Switz Group remains with its radars open. Switz Group so far focuses on the broader field of baked goods, however it is not excluded that they are considering their "expansion" into other product categories as well.

 

The Sterner Stenhus fund that is the major shareholder of Premia Properties, through the recent decision to acquire the IOLI brand and facilities from Athens Brewery, shows that on principle it maintains a strong investment interest in the wider beverage industry.

 

Similarly, funds with a Greek "flavor" seek to increase their investment footprint in the domestic market.

 

Diorama Investment, using Minerva as a vehicle, is estimated to maintain unhindered its interest in the food sector, acting either independently or through synergies, while the same philosophy is said to be maintained by the EOS Hellenic Renaissance Fund (EOS Capital Partners) which has proceed with 4 investments over a period of approximately three years in the food industry.

 

For Elikonos 2 S.C.A. SICAR, the barrage of investments in Greece indicates the clear targeting of developing a strong portfolio. As far as the investment fund SMERemediumCap (SMERC) is concerned, its strategic equity participation in the up-and-coming company in the field of pulses AROSSIS is a first sample its targeting in the food industry.

 

The fund VNK Capital, which holds a strategic stake in Palirroia and Cafetex companies, has been recording intense activity lately, too.

 

The national players

 

In this context, the attitude that the national players will take is equally decisive for the balances that will be formed in the domestic industry. Capital-strong domestic industries are required to balance both maintaining their growth prospects and shielding the Greek DNA of the market.

 

The decision to transform businesses into food groups such as Hellenic Dairies, Yfantis, Papadopoulos, Giotis, Melissa Kikizas, Kyknos etc. strengthens the presence of purely Greek brands, while the strategy model of Sp. Theodoropoulos is yet another domestic "answer" to the intrusion of foreign capital.