An Overview of the Food M&A Landscape

David Pinsky
3 min readMay 11, 2020


Source: CB Insights

Think back to the last time you visited the grocery store. Did you pick up a tub of Yoplait, a pint of Häagen-Dazs or a pound of ground beef?

Chances are if you’re like most modern consumers, you picked up their 2020 counterpart; Greek yogurt, Halo Top and a plant-based burger.

Over the last decade, many large consumer packaged goods companies (CPGs) have failed to innovate and adapt to evolving consumer preferences, which have generally shifted away from the center of the store towards the perimeter (i.e., healthier, fresher options).

At the same time, CPGs have faced a number of margin pressures, from wage and commodity inflation to increased competition from private label.

Amazon’s entry intro grocery following its acquisition of Whole Foods led to an immediate widespread sell-off in big name-brands such as Kraft Heinz, Campbell Soup, ConAgra, Hershey and General Mills.

Across the CPG space, incumbents have too often under-invested in product development and relied on a variety of different M&A strategies to compensate for their shortcomings, often under pressure from activist investors. These M&A transactions can generally be categorized into four buckets:

A) Scale-Driven

Scale and synergy driven deals to combat the broader pressures that large cap food is facing.

  • Shift out of the center of the store towards the perimeter (fresher, less processed foods)
  • Commoditization of the space (private label continues to capture share)
  • Input cost inflation (D&W, commodity costs, wage labor, etc.)

Representative Deals:

  • Conagra’s acquisition of Pinnacle Foods
  • Kraft’s merger with Heinz
  • Tyson’s acquisition of Hillshire Brands

B) Modernizing

Deals in high growth, on-trend categories — many of which fit the better-for-you theme that has gained prominence over the last decade.

  • Clean label
  • Plant-based alternatives
  • Lower sugar
  • Artisan
  • Premium beverage
  • Ethnic foods

Representative Deals:

  • General Mills’ acquisition of Annie’s
  • Pepsi’s acquisition of Bare Snacks
  • Mondelez’ acquisition of Perfect Bar
  • Nestle’s acquisition of Blue Bottle
  • Lactalis’ acquisition of Siggi’s
  • Unilever’s acquisition of Sir Kensington’s

C) Betting on an Adjacency

Deals that help an incumbent CPG evolve into a new category (snacking, pet), while some of their legacy assets (confectionery, cereal, shelf-stable soup) face topline pressure.

Representative Deals:

  • Hershey’s acquisition of Skinny Pop (Amplify Brands)
  • General Mills’ acquisition of Blue Buffalo
  • Campbell’s acquisition of Snyder’s Lance

D) Portfolio Rationalization

Transactions that allow large CPGs to reduce the complexity of their portfolios and divest slower growth or non-core assets

Representative Deals:

  • Nestle’s sale of its US confectionery business to Ferrero
  • Kellogg’s sale of its cookie portfolio (Keebler, Famous Amos) to Ferrero
  • Campbell’s sale of Bolthouse Farms to private equity (Butterfly Equity)
  • Reckitt Benckiser’s sale of its condiment business (French’s / Frank’s) to McCormick

CPGs under pressure and their reliance on M&A has given rise to a new crop of specialized investors. While it has become increasingly competitive, differentiated, on-trend brands with attractive growth prospects, high margins and strong velocities will likely continue to capture share and warrant strategic interest.

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