What Will Happen with M&A in 2025?
Last year brought a handful of high-profile acquisitions to the food and beverage space, but what will 2025 bring?
We’re off to an active start, but before we look at this year’s acquisitions, let’s recap a few from 2024.
FOOD ENGINEERING reported on at least 20 company and facility acquisitions in the food industry last year.
The largest — and likely the most talked about — is Mars’ proposed acquisition of Cheez-It and Pop-Tarts maker Kellanova for $36 billion. Announced in August, the transaction is expected to close in the first half of this year. Once complete, Kellanova will become part of Mars Snacking.
In October, PepsiCo announced it would acquire Garza Food Ventures LLC, doing business as Siete Foods, for $1.2 billion. Siete Foods produces better-for-you tortillas, salsas, seasonings, sauces, cookies, snacks and more. This acquisition closed in January.
PepsiCo followed that announcement with plans to acquire the remaining 50% interest in Sabra Dipping Company, LLC and PepsiCo-Strauss Fresh Dips & Spreads International GmbH (Obela). Set to close by the end of last year, PepsiCo would become the sole owner of these companies, which make Sabra and Obela products.
In November, Lakeview Farms, a portfolio company of CapVest Partners LLP, revealed its plans to acquire the noosa yogurt brand from Campbell Soup Company. Lakeview Farms produces refrigerated desserts, dips, salsa, hummus and specialty products under several brands including Fresh Cravings, La Mexicana, Señor Rico and Salads of the Sea. This acquisition is expected to close in the first quarter of this year.
These acquisitions align with a recent report from CoBank highlighting merger and acquisition activity in the food sector. The firm pointed to two themes driving these moves: companies seeking to streamline their product portfolios and expand their footprint into the snacking and better-for-you categories.
Nonetheless, CoBank pointed to a slowdown in overall activity in 2024, but with higher per-deal capital investment. Citing data from PitchBook, the firm reported that the total quarterly number of food and beverage M&A deals never dropped below 650 between the third quarter of 2021 and second quarter of 2023. The total number of quarterly deals dropped to 485 in the first quarter of 2024 and 416 in the second quarter of 2024.
However, the per-deal average of capital investment increased to $53.6 million per quarter in 2024, up from $30.4 million between 2021 and 2023.
“With consumers focused on better-for-you snacking, M&A opportunities in those spaces will likely increase, especially as certain segments appear overcrowded,” writes Billy Roberts, senior economist, food and beverage, CoBank. “Specifically, categories such as plant-based meat alternatives have a wealth of smaller brands, and with limited category growth of late, consolidation is likely. Elsewhere, major companies have opportunities to expand with strategic acquisitions of smaller players or for smaller companies to build share through merging.”
Within the first two weeks of January — even after the holiday season — Flowers Foods reported it would acquire better-for-you snack and baking mix manufacturer Simple Mills for $795 million. Additionally, Day-Lee Foods acquired B and D Foods, Mountain View Packaging and Tamarack Foods, while Westfalia Fruit acquired Syros, a Belgian manufacturer of avocado products.
Based on CoBank’s insights, and the flurry of activity we’ve already seen, 2025 is poised to be an active year for food mergers and acquisitions. Time will tell. FE
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