News – “Big Food’s Deal Frenzy Is Just Getting Started”

bloomberg.com – The U.S. food industry has announced $42 billion in deals this year, but it could just be a taste of the next wave of consolidation coming in 2018.

Companies from Kraft Heinz to Conagra are seen as possible suitors next year as food giants struggle to generate growth. They face an array of challenges: shifting eating tastes, a resurgent Wal-Mart playing tough with suppliers and Amazon’s expansion into the grocery business.

The latest round of deal speculation was sparked by two food-industry acquisitions announced Monday. Campbell Soup Co. agreed to acquire Snyder’s-Lance Inc., a maker of potato chips and pretzels, and Hershey Co. will buy Amplify Snack Brands, best known for SkinnyPop popcorn.

With those two transactions, the total value of food deals announced in the U.S. this year increased by about 54 percent from 2016’s $27.1 billion.

Acquisitions are increasingly seen as a way for old-line food companies to tap into new consumer trends — such as more fresh food. The industry needs something. Campbell’s shares have slumped 18 percent this year while Kellogg’s have dropped 11 percent. Even Kraft Heinz, run by managers from the private equity firm 3G Capital, is down 9 percent in 2017 as investors worry about the company’s ability to pull off another deal.


Do whatever deals need to be done to keep offering up good deals.

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