Desperate for growth in a moribund trading environment, there are signs some food manufacturers operating in the US are using acquisitions to bolster their presence in more vibrant parts of the industry.

Should others follow?

In the last five days, a trio of deals have been announced that show a desire to add healthier or more convenient options to product portfolios.

Yesterday, Hillshire Brands moved to put waffles, pancakes and a range of gluten-free breakfast products and snacks into its basket with a deal to buy Van’s Natural Foods.

Hillshire, which owns meatier breakfast lines like Jimmy Dean bacon, plans to pay private-equity firm Catterton Partners US$165m for Van’s, which is expected to generate $60m in sales this year.

The deal won the backing from some on Wall Street, with Barclays Capital’s Andrew Lazar saying Van’s would be “an attractive, strategic fit” that should boost Hillshire’s sales growth.

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There was also analyst support for a second transaction announced yesterday. US private-label group TreeHouse Foods has swooped for Protenergy, a Canada-based maker of broths, soups and gravies.

Convenience appears to be a key factor here, with TreeHouse insisting Protenergy is at the “forefront” of the “evolution of carton and recart broth”.

After the announcement, BB&T Capital Markets analyst Brett Hundley upped his target price on TreeHouse’s shares and added: “We like the acquisition for a number of reasons: Protenergy’s products are focused more on the premium customer and there are likely significant top- and bottom-line synergies.”

However, the largest of the three deals came just before Easter when the acquisitive Post Holdings revealed it had agreed a deal to buy Michael Foods for $2.45bn.

The move is the latest made by Post, which has struck a number of acquisitions in recent months to diversify away from its traditional heartland of breakfast cereal, a sector struggling for growth in the US.

As we outline here, the Grape Nuts and Honey Bunches of Oats cereal owner has sealed deals in sectors from pasta to sports nutrition in the last year or so.

Post said its purchase of Michael Foods would give it “leading market positions in attractive categories” including value-added egg products, refrigerated potato products and cheese.

Shares in Post dipped on Thursday, the day it announced the Michael Foods deal, perhaps amid some concern over the impact its acquisition spree could have on its balance sheet.

Stifel Nicolaus analyst Chris Growe said Post will likely put any further M&A ambitions on hold in the short term as it “rapidly deleverages”. 

However, even though Growe said Post’s M&A splurge had given it “an unusually high level of debt on its balance sheet”, the analyst said its deals – including for Michael Foods – had bolstered the company’s growth trajectory. Three-quarters of Michael Foods’ sales are from egg products, which have, Growe argued, benefited from current consumer demand for protein.

Interestingly, in Growe’s commentary on the deal, he indicated Post, in the longer term, saw more M&A opportunities out there amid low interest rates and the number of businesses for sale.

Could – and indeed should – this then be a time when some of the larger food manufacturers in the US more actively seek acquisitions? Companies like Kellogg and General Mills are facing challenges and perhaps ought to look to M&A to bolster their own growth trajectories.

Certainly, marketing and NPD initiatives, while meaning less investment, may not be enough to kick-start growth at the two food giants.