Mergers And Acquisitions Major Deals For Food And Beverage Companies...Just Not For Their Consumers
December 4, 2012
(Off The Menu)
– Here was my wife’s response when I mentioned to her last week that ConAgra Foods Inc. bought Ralcorp Holdings Inc.:
“Who, who and so?”
And that’s going to be your typical response from any consumer who is told about any food and/or beverage acquisition, even major ones like the ConAgra-Ralcorp deal (said to be valued at $5 billion according to various media reports, but valued at up to $6.8 billion by one of the official press releases). When push comes to shove, major acquisitions in this industry don’t register a blip in the consumer mindset.
I decided to test out this theory further. I was over at my mom’s house recently and saw a package of Oscar Mayer hot dogs in her refrigerator.
“Hey Mom,” I asked, “do you know who owns Oscar Mayer hot dogs?”
“Oscar Mayer,” she replied.
“No,” I said. “They’re owned by Kraft Foods.”
“Want me to make you a hot dog?”
For consumers, who owns what brand is immaterial to their buying habits. They’re buying the name, not the owner of the name. Consumers have no idea that Bolthouse Farms Inc. was recently purchased by Campbell Soup Co. They have no clue that Tropicana and Minute Maid orange juice are owned by PepsiCo Inc. and the Coca-Cola Co., respectively. When they see in the months ahead that Wonder Bread and Twinkies are still in supermarkets, they won’t think: “Oh, someone must have bought Hostess Brands.” They’ll just assume that Hostess didn’t go out of business after all.
Mergers and acquisitions are big news for food and beverage companies. Just not for the people buying the products.
Nevin Barich is the Food & Beverage Analyst for Industry Intelligence Inc. If he weren’t an analyst, he’d have no clue who owned any of his favorite food and beverage brands. He can be reached at email@example.com