Food Industry Trends for 2018

55547.jpgAuthor Credit: Alli Farago

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2017 was a busy year for the food industry with many mergers and acquisitions taking place, and this is expected to continue into 2018.  According to the Food Institute data, 587 companies completed mergers and acquisitions last year.  This is a considerable increase from the 505 mergers and acquisitions from 2016 and the 410 from 2015.  In the United States, the food industry completed deals worth a total of $42 billion throughout 2017, up from the $27.1 billion in deals from 2016.  Mergers and acquisitions have been taking place in all sectors of the food and beverage industry, with the largest being the sale of Whole Foods to Amazon for $13.7 billion.  Along with Amazon, other large companies have also been expanding into the food distribution industry, including Walmart and Target.  Other examples of recent mergers and acquisitions include the sale of Snyder’s Lance Inc. to Campbell Soup and the sale of Nestlé’s US confectionary business to Ferrero.

Currently, Nestlé is the fourth largest candy company in the United States, following Mars, Hershey, and Mondelez, but after Nestlé is acquired by Ferrero, Ferrero will be the third largest United States candy company.  The United States is the largest candy market in the world and has an estimated worth of $33.8 million.  However, according to Euromonitor statistics, the growth of the confectionery sector decreased to 1.7% between 2015 and 2016.  This reflects a recent shift in consumer preferences from candy and sugary foods to healthier options.  Recently, many candy companies, along with other food companies, have been purchasing companies that are known for healthier snack alternatives.  For example, Nestlé owns a majority interest in the Blue Bottle coffee shop and has plans to purchase the vitamin company, Atrium Innovations.  Also, last year, Mars purchased a line of microwaveable vegetarian meals and Hershey’s purchased Amplify Snack Brands.  These companies are taking into account recent clean eating trends and are trying to stay up to date with consumer opinions.  Ferrero, on the other hand, is sticking with the confectionery sector, by also purchasing the companies Fannie May Confections and Ferrara Candy Co.