2015 Top 10 Food Companies

Sponsored by Strategy&, part of the PwC network

Move over high fashion, there is a new trendsetter in town and its name is packaged food. Overall, growth of the U.S. CPG industry accelerated only slightly in 2014 (2.1 percent versus 1.6 percent in 2013), according to a March 2015 study, “Which Companies Drove U.S. CPG Growth in 2014?” from BCG and IRI.

But big changes are afoot. In just a few short years, once beloved, but heavily processed foods have fallen out of the consumer’s favor. In their place now stand better-for-you snacks, digital savvy and cause-centered brands, international flavors and gluten-free foods.

These hot new trends — mostly centered on health, taste and convenience — often times leave larger pack- aged food giants feeling out of style. In fact, about $18 billion in industry sales shifted from larger companies to smaller players since 2009, according to the BCG and IRI study. It’s statistics like this that make the niche brand acquisition extremely attractive for the majors.

“General Mills paid four times sales for Annie’s, and generous multiples have also been seen for Hershey’s acquisition of Krave jerky, or Campbell Soup buying Plum Organics baby food,” said Bernstein Senior Analyst Alexia Howard in the October 2015 report, “The Long View: U.S. Food - A Recipe for Change.”

Smaller, better-for-you brands weren’t the only lucrative buys over the last few years. Hong Kong-based WH Group Limited (formerly Shuanghui International Holdings Ltd.) makes its debut on the Top 100 list this year with its acquisition of Smithfield Foods, the largest pork processor and hog producer in the world, as a wholly owned subsidiary.

We saw an all-out bidding war between Pilgrim’s Pride and Tyson Foods, Inc. for Hillshire Brands, with Tyson eventually emerging triumphant. Subsequently, the company had a record year in fiscal 2014 and expects fiscal 2015 to set new records for sales and earnings.

Meanwhile, Kraft Foods Group, Inc. and H.J. Heinz will depart from next year’s Top 100 list as stand-alone companies — their merger in 2015 created the third- largest food and beverage company in North America, only trailing PepsiCo and Nestle.

To see the Top 10 Food Companies, click on the attachment below.