Exponential growth in technology, interconnectivity, and machine learning over recent years has resulted in automated machines and robots taking on a larger role in maximizing workplace efficiency. As such, robotics has quickly become an integral aspect of various industries, especially that of the food and beverage sector.
The labor shortage is the most critical issue facing restaurants today. A record-high 1 million US workers quit the restaurant industry in 2021. According to the National Restaurant Association, the industry is unlikely to ever completely return to its pre-pandemic state as a recent survey found that nearly 97% of restaurant owners are struggling to hire workers. High profile companies, like Chipotle, have already expressed interest in a food service robotics company. These expressions are likely to heighten throughout the industry as companies work to increase efficiencies and fill the labor gap.
The manufacturing industry has also looked to robotics to save time and money. Approximately 26% of food and beverage packaging lines have utilized robotics and as a result food industry manufacturers have reported a 25% increase in productivity. While it can seem as though robots will simply take jobs currently held by humans, the reality is that these robots can create positive economic spillovers. In the end, the increasing number of robots in the manufacturing industry yields reduced prices of goods, thus generating shared capital gains, and creating new opportunities. For instance, higher-paying positions have been created for those who can perform tasks beyond the abilities of machines or analytical jobs.
The global food robotics market was valued at $2.05 billion in 2020 and is estimated to reach $5.79 billion by 2031, registering a CAGR of 10.4% from 2022 to 2031. Given the early nature of this technology and expected future growth, it is no surprise that we are witnessing a large amount of M&A activity within the food and beverage space.
M&A activity has decreased from Q1 to Q2 primarily due to the broader economic headwinds seen in the market recently such as inflation. Research and Development and VC transactions are ramping up, as the space is expected to grow exponentially in coming quarters with companies looking to further automate their production and service offerings. Further, given that the demand for packaged food is anticipated to increase at a moderate rate during the forecasted period, the demand for food robotics is expected to surge in the near future. This recent trend has sparked particular interest from both VC and PE firms.
Notable Food & Beverage Robotics Investments
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