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Vendor Due Diligence for a Powdered Hot Beverages Business

Sector:

Situation

The Owners of a leading player in the UK powdered hot drinks segment, with a strong presence in both Retail and Out of Home, asked FSA to provide Commercial Due Diligence.

What we did

FSA worked with Management to develop and evidence a clear and robust investment thesis while minimising demands on Management through close collaboration with other advisors. Over a 7-week period, we emphasised the strength of the clients capabilities as a brand partner, the vast, tangible headroom in its categories, and its unique knowledge and strong relationships in OOH channels

  • Conducted analysis on the Hot Beverages and Hot Milky Drinks markets using scan and panel data for both in-home and OOH consumption
  • Used both management financials and scan data to evaluate the performance of the businesses key brands
  • Conducted interviews with key customers across retail, foodservice and vending, as well as brand partners, to understand category trends, the clients strengths and weaknesses, and opportunities for further growth
  • Developed a model to forecast the recovery of key categories post-COVID and expected embedded growth rates for the business
  • Led a U&A study to understand consumption and purchase drivers of Hot Milky Drinks, and to define consumer sentiment around the strength of the clients brands and planned future NPD
  • Utilised all of the above and expert knowledge to appraise the clients 3 year plan and define potential risks / upsides

Outcome

Sale process is still in progress.