European consumer M&A activity mirrored much of the dealmaking environment when it posted a notable slowdown in 2023 – a year-on-year fall of 32.9% at the end of Q3 2023 according to MergerMarket.

Levels of macroeconomic disruption have remained high post-COVID and since the impacts of the war in Ukraine took hold more widely across Europe. A highly cautious debt financing environment emerged in the past 12 months, driven by, inter-alia, significant uncertainty around financial projections due to European consumers feeling the squeeze associated with elevated levels of inflation and the interest rate rises enacted to combat this. 

Costs remain at an elevated level and consumers remain under pressure. The recent AlixPartners Critical Consumer 2024 research indicated that 37% of 10,000 surveyed consumers are planning to spend less in 2024 than in 2023 – just 16% said they were planning to spend more. 

In our view, this net decrease in spending intentions, aligned to a broader stagnation in consumer confidence, points to five potential repercussions in M&A in the consumer sector for 2024: 


1. Market underperformance will drive divestment activity
Shrinking consumer wallets at a time when cost inflation remains elevated means that the size of the economic profit in this market segment will be under pressure. This could drive weaker-performing companies to face up to the prospect of selling non-core assets or exiting markets completely. By contrast, the companies that attract higher multiples will continue to display a strong, differentiated proposition and a clear articulation of the perceived value for money they provide in the eyes of its customers. 

AlixPartners’ client activity: Our deep expertise in creating value from complex non-core divestments and track-record in execution means we have been engaged increasingly early but also when there is a need for fast-track execution.

2. Corporate carve-outs have a vital role to play
The continuing evolution of consumer preferences means that it is very difficult for large corporate juggernauts to manage multiple product lines and brands across geographies. We expect to see further right-sizing of product portfolios, as there are significant value creation opportunities to unlock through a carve-out process. 

AlixPartners’ client activity: Private equity clients remain laser focused on carve-out situations, particularly where there are manufacturing assets involved and a level of complexity that may level the playing field versus strategics. 

3. Take-private and “remain private” remains a key theme 
The public markets can be short-term focused and do not generally deal with more complex, challenged situations. Given consumer companies are expected to remain under pressure, we expect take-private interest in businesses that are undervalued by the markets (such as Finsbury Foods and the announced offer for Curry’s) to continue into 2024. In addition, we expect the UK IPO market to remain challenged due to a difficult economic backdrop. 

AlixPartners’ client activity: Break-ups as well as bolt-on M&A strategies are central to the thesis in the take-private situations we see, alongside sharper operational improvements.

4. Asset-light opportunities for the strongest brands
We have seen a longer-term shift towards “asset light” companies across the apparel (licence companies), food (e.g., contract manufacturing), and broader consumer sector (e.g., hotel and restaurant franchise models). These can further drive the value of the most powerful brands, via the creation of “operating companies”, which specialise in manufacturing and/or distribution. This allows brands to exploit international opportunities rapidly in an efficient method. Strong brands can help operators better withstand economic pressures and also support value in a capital raising or M&A process.

Given the challenges facing the consumer sector overall, we may see more brands being acquired and moved towards this asset light operating model in the coming years. Recent examples include the acquisition of Hunter by Authentic Brands.

AlixPartners’ client activity: In exploring new market entry for clients, we are supporting clients in their assessment of both the right co-manufacturing and distribution partners, as well as the associated M&A strategy to accelerate building scale and capabilities. 

5. Overcapacity in food manufacturing
As profit margins continue to be squeezed, we have seen a long-term decline in the number of manufacturing facilities in the UK, as sites have become less profitable. Larger operators who can take advantage of data-rich tools such as AI and operate a under more efficient cost models are likely to survive and take market share across the food manufacturing sub-sector. 

AlixPartners’ client activity: We are increasingly seeing our clients look to build out their capabilities and explore opportunities to acquire and repurpose sites.


Despite the significant challenges of 2023, investor confidence does appear to be returning to the M&A market, with recalibrated levels of certainty around financial projections supporting deal activity. However, it will perhaps be a longer road to recovery for consumers. 

With a constricted consumer purse to play for, the winners in the market will be defined by their ability to maintain and further strengthen brand power, demonstrate a differentiated proposition to suit consumer preferences as they evolve, all the while delivering product value and value for money in equal measure.