March 12, 2008

Consolidation of US food processing industry on an upward trend
 

Market consolidation of the food processing industry is moving at a quick pace, and though it has slowed down, the industry is now taking a strategic focus in its mergers and acquisitions, according to The Food Institute.

The US food processing industry is moving especially fast and aggressively, as it closed 94 deals and has another 16 in development. This is not very surprising, however, as the food processing industry have accounted for the highest number of mergers and acquisitions for many years running already, according to Danielle Breuel, research & education director of The Food Institute.

"However, investment firms & banks have steadily increased their interest in food businesses and are on pace to complete more acquisitions in this industry than food processors within the next few years," added Breuel.

Despite that the food processing industry is still at the top, acquisitions have in fact decreased. Even so, individual transactions were noteworthy.

"One thing to be said about the deals being carried out in the food processing sector is that these acquisitions have a very specific strategic focus: larger firms are purchasing smaller, health-focused companies and brands," said Breuel.

In 2007, the food industry closed a total of 413 transactions, up 5 percent from 392 transactions in 2006. There were also 60 to be completed deals in 2007, up 1 percent from 59 in 2006.

Based at New Jersey of US, The Food Institute is a non-profit organisation that provides information about the food industry. In addition, the Institute has been tracking food business mergers and acquisitions for over 25 years.