There were 516 mergers and acquisitions in the US food industry last year, 125 or 20% fewer than in 2000 and the lowest level tracked by the Elmwood Park, NJ-based Food Institute since 1993.
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Among the segments with the sharpest declines were restaurant and foodservice (down 30 to 61); packaging and equipment suppliers (down 24 to 28); and food processing firms (down 26 to 146).
“As the economy took a dip in 2001, so did merger and acquisition activity in the food industry,” said Catherine Pfister, market analyst at the Institute.
Among the year’s most notable marriages, according to Pfister, were the merger of Texas-based Suiza Foods with Dean Foods, giving it 30% of the US liquid milk market, and, when after briefly getting cold feet last spring, Tyson Foods, the world’s largest poultry producer, finally acquired beef and pork processor IBP. Smithfield Foods also remained on the prowl for acquisitions throughout 2001, gobbling up an impressive number of companies, among them: Pinnacle Foods, Moyer Packing Co., The Smithfield Cos., Gorges/Quick-to-Fix Foods, Packerland Holdings, Inc., Stadler Country Hams, Inc. and RMH Foods.
Kraft Foods, which was in the news last June with its highly anticipated IPO, remained busy shedding “non-essential” businesses, including its Mexican pasta unit, its pasta, biscuit and dairy businesses in Brazil, the Farley and Sathers confectionery businesses and Knox nutritional supplements in the US, while stocking up its cupboard with the It’s Pasta Anytime! brand, a Finnish snack company and a coffee roaster and marketer in Morocco, among others.
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By GlobalDataAfter two years of decline in the supermarket industry, however, merger and acquisition activity was on the rise, totaling 27 transactions, three more than in 2000. Pfister admitted though that “the scope of the deals was for the most part smaller than in previous years”.
