Some dealmakers are saying that labor shortages and supply chain issues will not be as big of a problem in 2023. But that depends who you ask, and in which sector. The logistics industry is plagued with driver shortages, and there aren’t enough nurses to go around. And believe it or not, you can add food manufacturing space to the list.
“Everybody is always looking for ways to eliminate labor,” says Tyler Matlock, a managing director at consumer-focused private equity firm Swander Pace Capital. He acknowledges that supply chain might be an improvement compared to last year, but labor will still be a challenge among food companies.
So, how are they overcoming these obstacles? By cutting out the middle man. Instead of sending food products to kitchens and other facilities to be cooked, where there might a shortage of workers, frozen meals are being made and packaged at the manufacturing level. Matlock adds that this helps mass produce products more quickly and accurately too. Automation helps with the process as well. “The frozen food market tends to be more back of the house labor,” Matlock says.
Earlier in January, Swander Pace-backed Café Valley, a manufacturer and distributor of baked goods for the in-store bakery and food service channels, bought Freed’s Bakery, a manufacturer of iced mini cupcakes for national and regional retailers.
Swander Pace will keep its eye on for more frozen food deals, according to Matlock.
– Demitri Diakantonis