Meanwhile, it is generally agreed that private-equity investors, who have been active players in food M&A, are likely to keep deals ticking over by the mere fact they have to put their substantial cash piles to work. Start-ups in food, particularly in on-demand categories, are likely to continue to be a temptation to large manufacturers looking for growth and eager to save money on research and development.

One of the biggest themes influencing acquisitions this year has been Big Food companies seeking to grab a slice of on-trend categories such as meat and dairy alternatives and healthy snacking.

Industry watchers suggest such trends are likely to remain a factor, along with the emerging and quickly developing interest in direct-to-consumer (D2C) services, although opinions are divided about whether D2C will translate into more deals (in the wake of Unilever's move for Graze) as soon as 2020 or further down the line.

Undoubtedly, the meat-alternative arena has attracted attention over the last 12 to 24 months, with majors including Maple Leaf Foods and Unilever making notable acquisitions.

However, M&A has not always been the only way the big food players have entered the category, with some launching products in their own right rather than undertaking acquisitions. Some industry watchers put this down to concerns that some of the up-and-coming firms don't have the capabilities to scale up sufficiently.

"If you had talked to me this time last year I would have said those would get bought quite quickly and probably at very high prices," says Jonathan Buxton, a partner at British M&A advisory firm Cavendish Corporate Finance. "But if you are involved in one of these bigger food groups you are always looking at what would it cost us to do those things internally versus buying someone, and actually could we do it better? I think they have concluded they can just do it themselves." 

Nevertheless, he adds: "I think in the meat-free sector, it is likely, one way or another that there will be acquisitions."

Buxton also says companies operating around what might be deemed as peripheral or alternative segments of free-from, or those that fit in the healthier agenda within the real-meat category, will also attract M&A interest.

Peacock believes deals in the meat-free space may take longer to materialise given that would-be buyers are probably allowing the market to play out and mature, particularly with so many new entrants and variations on the theme, before stepping in amid the risk some may fall by the wayside.

He says similar scenarios have played out before in other categories, such as in nutritional drinks and cereal bars. When you get a "massive proliferation" of products, M&As tend to tail off.

"There's not a massive barrier to entry now with meat substitutes," Peacock adds. "Those without the resources, those that have over-stretched themselves, either fail, or they stumble, or they pull back. When there are lots of targets out there, if you are a large corporate acquirer you tend to wait until that number whittles down to the winners and losers. You want to know that you've either bought the number one or you bought the number two and understand its positioning."

Meanwhile, Shaun Browne, an M&A adviser who jointly leads UK corporate finance at investment bank Houlihan Lokey, says the free-from area, in particular meat-free, "continues to be very hot" but he also pinpoints pet food as a key topic of M&A interest and one that is also quite resilient during a recession. 

And he believes there aren't enough acquisition opportunities in meat alternatives with the right scale when the likes of Netherlands-based The Vegetarian Butcher – bought by Unilever in 2018 – have been snapped up.

"There are very few, sizeable large-scale companies in the meat-free space," Browne says. "Most of the meat-free businesses are relatively new and therefore pretty small. If a very large FMCG player like Unilever, Nestlé, Kraft Heinz, Mondelez, PepsiCo or Danone wants to expand by acquisition in the meat-free space, they can only acquire smallish companies like The Vegetarian Butcher or Amidori and hope to expand them dramatically."

The direct-to-consumer segment is also starting to attract more attention. This time last year, Cyrille Filott, a global strategist for consumer foods at Rabobank, forecast 2019 would be the "year of Graze" before the UK-based healthy snack brand was bought by Unilever. The company started out as a subscription-only service and employs a D2C model.

Filott explains his reasoning behind tipping Graze was because it's a company "getting closer to the consumer", an area that Rabobank is monitoring. "I do expect, potentially, some deal activity there," he says, either in the form of M&A or direct investment.

However, like the meat-free space, he says there aren't sufficient D2C targets in the food arena as yet to make it an active market for acquisitions just as it's "becoming increasingly important to reach the consumer directly through marketing and direct sales". 

"That's why I'm fascinated by the acquisition of Graze by Unilever to see how that will play out," Filott continues. "It could be a great poster child for more things to come. Purpose-led is number one for 2020, and D2C has been on the list for a while, and that will continue to be there."

At Houlihan Lokey, Browne says he is a "huge fan" of D2C but with the caveat that must be a product or service "that is not easily available in your local supermarket". It's all about personalisation: 

"Some are growing very fast and making some very nice margins," he says. "That is when the big players say 'we want to buy that'".

At Cavendish Corporate Finance, Buxton calls out meal kits as a potential area for acquisitions next year or in 2021, either by retailers or food manufacturers, or both, in a side-step from D2C activity.

"I think meal kits is a definite," Buxton says. "Kroger, for instance, in 2018 bought Home Chef and also invested in Ocado, so it gives them meal kits, delivery and, via Ocado, e-commerce shopping. So the question is, at what point will the other supermarkets do something similar? And I think meal kits tick so many boxes.

"I'd like to think there will be something in direct-to-consumer and things like meal kits as it's such an obvious route for one of the big supermarket groups to snap up one of the players there." 

Away from manufacturing as such but still within the D2C model, Buxton says online retailer Amazon could emerge as a large player in the food category to fill the current industry gap in direct-to-consumer services, especially if its recent in-house ventures into gin and pet food don't pan out as planned.

In such a scenario, Amazon might be encouraged to take the easier route of buying up food brands (not manufacturers) rather than developing them internally, he says. 

But, indirectly, corporate responsibility will also be a factor on the acquisition agenda, Filott says, in terms of what he calls "purpose-led" or in other words: "Creating value for the broader society instead of just creating financial value".

More and more food companies are being driven by creating sustainable values, he says, adding the shake-up of brand portfolios by Big Food, through selling off non-core assets and buying into new growth categories, a scenario in play, will continue but with the additional criteria of purpose-led.

"I believe that in terms of M&A activity, these purpose-led companies, which tend to be European and not so much US, might have an interest to acquire purpose-led companies or start-ups, and/or dispose of companies that may not fit the longer-term profile.

"They might be going after start-ups that have food which is much better for you from a nutritional point of view, from a supply-chain point of view from sustainability. And clean label, a theme of the past, could also fit into this broader purpose thinking. So companies that are really thinking differently about food and are looking, partly, at changing the world, and not only financially."

Growth is becoming an important factor in that decision-making process, more so than a pure focus on profitability, Houlihan Lokey's Browne argues, because some of the larger food producers are saddled with dated and "tired" brands.

He relates to Unilever selling Flora spreads two years ago, a brand that was "hugely profitable" with a "spectacular margin profile" but wasn't delivering the desired growth, the reason be believes the consumer goods giant sold it. 

"Growth is becoming ever-more important – even more important in many respects than profitability," Browne claims. "So Unilever, (with the likes of Graze, Vegetarian Butcher, Pukka and Tazo), and Nestlé (with the likes of Terrafertil, Tails and the Starbucks licence) are buying businesses that are going to give them growth in the years to come, and shed businesses which, in their view, have gone ex-growth, irrespective of profitability.

"It is going to take some time to change direction but ultimately they need to be demonstrating to shareholders that they have a portfolio of brands that is growing, rather than flat. And that continues to be a very strong trend."

And while many of the Big Food companies are opting to go their own way in terms of new innovation in areas such as meat-free and nutrition, others are cutting back on R&D but keeping an eye on industry disruptors, usually start-ups, to essentially do the work for them.

"Some of the big companies are cutting back on the quantum of money they spend on R&D. Instead, they are waiting for small, fast-growth companies to get to a certain scale and then buying them. The money they have saved on R&D is instead spent on making acquisitions of companies that have already proven to be successful," Browne says.