Thursday, May 05, 2011

Take-overs

Things have been relatively quiet in the cereal world, but two reports in the last week or so are changing that.

First, some speculation has emerged that Swiss food giant Nestle is interested in a take-over of General Mills. This is not completely surprising, as the two companies have worked together closely in the past, including the recent launch of a new innovation research center.

And, this week ConAgra has made bids to take over Ralcorp, maker of Post and various private label cereals.

On the surface, this just appears to be nothing more than corporate consolidation. But, it does represent the shifting nature in the food business, with a growing bifurcation between large corporations and small niche ventures. I've been observing this in cereal for quite some time, with large mass-market brands, but with increasing opportunities for smaller, nimbler companies that can target specific consumer needs and tastes.

(Source: Bloomberg)

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