Fair Lawn, NJ - Merger activity in the U.S. food industry soared in 1997, with a record-high 734 divestitures recorded by The Food Institute last year. That was nearly 200 more than reported in the prior year, according to exclusive data from the Fair Lawn, NJ-based trade association. Only in 1986, did The Food Institute record nearly as many mergers and acquisitions among U.S. firms -- 724. All told, The Food Institute has tracked over 2,700 industry divestitures over the past five years -- see attached chart.
"Leading the pack for the second consecutive year were foodservice concerns, as a plethora of these businesses changed hands during the year. Tops among these were: JP Foodservice's $689 million purchase of Rykoff-Sexton; AmeriServe's acquisition of PepsiCo Food Systems and CKE Restaurants purchase of Imasco's Hardee's restaurant chain," commented Brian Todd, Senior Vice President of The Food Institute.
Bouncing back from the prior year, activity among food processing firms increased in 1997 and was again an important piece of the total merger pie. All told there were 103 mergers by food processing firms.
Among the bigger deals were: Nestle's sell-off of its Contadina tomato lines to Del Monte Corp. and three acquisitions by Chiquita Brands' -- Stokely USA, American Fine Foods and Owatonna Canning.
Among retailers, the largest deal in the supermarket industry was Fred Meyer Inc.'s [NYSE:FMY - news] purchase of Ralph's Grocery Co., Compton, CA, and Quality Food Centers, Bellevue, WA. The Portland, OR-based chain also purchased Salt Lake City's Smith's Food & Drug Centers earlier in the year. Other deals included Mississippi's Jitney-Jungle Stores acquisition of the Delchamps chain of Mobile, AL; and Pittsburgh-based Giant Eagle's takeover of Riser Foods, Maple Heights, OH.
A detailed analysis of merger activity, Food Business Mergers and Acquisitions 1997, will be available shortly from The Food Institute. In addition, the Food Institute tracks food business divestitures each week in The Food Institute Report. For details about the annual publication or the weekly report, call Ivy Rubin at (201) 791-5570, ext. 12 or e-mail irubin@foodinstitute.com.
The Fair Lawn, NJ-based Food Institute is a non-profit information and research organization serving the food trades. Founded in 1928, the group has over 2,200 member companies throughout the U.S., as well as in 40 foreign countries. It maintains one of the food industry's most comprehensive web sites at http://www.foodinstitute.com.
Food Business Mergers & Acquisitions: 1992-1997
Category: 1997 1996 1995 1994 1993 1992
Agricultural Co-ops 3 4 5 6 5 9
Bakers 20 8 10 16 6 9
Brewers 5 2 6 1 3 1
Brokers 22 14 6 9 8 14
Dairy Processors 15 4 18 17 15 14
Food Processing Firms 103 96 96 106 114 84
Foodservice Vendors 36 10 23 14 12 19
Meat Processors 12 10 10 14 14 12
Poultry Processors 8 4 10 7 3 9
Restaurants & Foodservice 127 108 78 71 72 57
Seafood Processors 7 4 4 3 2 6
Snack Food Processors 9 7 12 9 7 11
TOTAL 734 538 529 522 485 468
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