Guest Columns

Perspective:
Industry Issues

Consolidation is here — are you ready to be bought, or left behind?

Michael Schwantes

Michael Schwantes is president and CEO of Creative Business Services/CBS-Global, Green Bay, Wisconsin. He contributes this column exclusively for Cheese Market News®.

There’s no question that consolidation in the cheese and dairy industry is accelerating. Whether it’s regional processors merging, national players expanding their footprint or private equity looking for scale, one trend is clear: the industry is changing hands — fast.

For owners of small to mid-sized dairy businesses, this wave of activity presents both a threat and an opportunity. The question isn’t if consolidation will affect you — it’s how prepared you are when it does.

• Who’s driving the deals?

Strategic buyers are seeking synergies — customer overlap, route density, vertical integration. Private equity is focused on platforms they can scale. In either case, buyers are pursuing businesses that fit a larger vision.

If you can’t show how your company fits into that bigger picture, your chances of commanding a premium drop.

• The risk of standing still

In a consolidating market, standing still is falling behind. Competitors are gaining size, efficiency and purchasing power. If you’re not actively improving your business — streamlining operations, strengthening leadership, diversifying your customer base — you may find yourself being overlooked or undervalued when the time comes.

Worse, you might find that the buyers who used to knock on your door are now focused elsewhere — or have already bought your competitor.

• Positioning for a strategic exit

To position your business for acquisition, start acting like you’re already being evaluated. That means:

• Cleaning up your financials
• Reducing dependency on the owner
• Documenting systems and processes
• Showing growth potential
• Addressing risks before diligence exposes them

Buyers want confidence. They want to know that what they’re acquiring will keep performing after the owner steps away. Businesses that are stable, well-documented and growth-ready consistently outperform in competitive deal environments.

• Don’t wait for the phone to ring

Many owners wait until a buyer approaches them. That’s rarely when the business is at its peak, and it puts the seller on defense from day one. The best outcomes happen when the owner controls the process, sets the timing and engages the right advisors to guide the deal.

If you wait too long — until fatigue sets in, financials dip or key employees leave — you’ll be negotiating from a position of weakness. Worse yet, you may find yourself stuck with a business that is no longer attractive to acquirers.

• The premium is in the preparation

In today’s environment, preparation isn’t just smart — it’s required. There’s a premium paid for businesses that are well-run, well-positioned and plug seamlessly into a buyer’s strategy. If your company is not in that category, the multiple you hoped for may never materialize.

• Conclusion: You have a choice

Consolidation is no longer a trend — it’s a fact. The cheese and dairy landscape is shifting quickly. As an owner, you can either ride that wave to a strong exit — or wait and risk being left behind.

The difference is preparation. Get your business in shape, understand your options, and engage in the process before someone else defines your future for you.

CMN

The views expressed by CMN’s guest columnists are their own opinions and do not necessarily reflect those of Cheese Market News®.

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