As part of a DD on the industry I’m looking to chat with people knowledgeable in agri businesses, specifically processing of fruit and vegetables. A few topics I’m particularly keen to learn more about:
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Market dynamics – My initial research shows a relatively low forecasted growth rate (~4% CAGR), which feels counterintuitive given tailwinds such as healthier eating habits and reduced meat consumption. How do experts see the market? Are there specific segments that are considered more or less attractive?
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Margins – I see large margin variability in the sector (assets report 9-30% EBITDA margin based on my research). I am keen to get thoughts on what drives the range and whether high margins in outliers are typical (e.g., specialisation?) or sustainable in the long term.
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Customer dynamics – From conversations so far, it seems customer concentration and stickiness are common in the space. However, I’m curious about the implications for pricing power and margin pressure — what have the experts in the field seen in practice?
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Capital intensity – The sector has a moderate CAPEX and working capital, which some investors don't see as a good fit to a search fund model. I’d appreciate yan expert view on how this plays out in practice and what a typical benchmark in the space should be.
I’d also be really interested to hear more broadly about peoples (investors, searchers, operators) experience with the space — what drew you to the space, and what you find most/least compelling about these types of businesses.
