The food and beverage industry is remarkably concentrated, with top companies wielding multiple, sometimes dozens, of brands to capture over 70% market share in the US market in key segments like beer, soda, chocolate, and cereal.
With increased global focus on health and natural eating, smaller food companies have grown in recent years — a Boston Consulting Group report found that CPG companies with less than $5B in sales gained 2.7 points of market share since 2011 — representing $18.1B in aggregate sales growth. BCG also noted that in 2015 the industry saw its fastest growth rate since 2012.
Big CPG players have stepped up their M&A and investment activity in recent years. Anheuser-Busch InBev has been a top acquirer, purchasing 15 private companies since 2011. Water distributor DS Services of America acquired nearly 10 smaller water brands over the same period. In the first seven months of 2016, we’ve seen Campbell Soup launch a $125M venture capital fund, Kellog’s launch a $100M venture capital fund, Mondelez bid $23B (in a rejected deal) to take over Hershey’s, and Danone’s acquired WhiteWave Foods for $12.5B.
However, we still see dozens of private food and beverage companies (some with equity funding from the industry leaders) attacking every aisle in the supermarket, with some offering their products in stores, and others competing solely by distributing online. Using CB Insights data, we identified 93 companies offering new takes on healthy beverages, snack foods, plant-based cheese, and more.
The graphic includes private, active companies only. Companies in this graphic have raised nearly $1.8B in total funding, and we note that beverages are an especially large category.
Mondelez, Kraft, Coca-Cola, Nestlé, PepsiCo, P&G, Johnson & Johnson, Mars, Danone, General Mills, Kellogg’s, and Unilever own just about everything you could hope to buy. It seems that six degrees of separation theory has been proven after all, if only because we all drink Diet Coke every now and then.
In order to visually elucidate that point, Oxfam International created a comprehensive infographic that reveals the extensive reach of the “Big 10” food and beverage companies. Unlikely ties between brands we largely don’t associate with one another show how easy it is to be misinformed about the American food system. For example, PepsiCo produces Quaker granola bars, and Nestlé makes Kit Kat bars but also frozen California Pizza Kitchen pies. To the surprise of many, Pineapple Fanta isn’t sourced straight from the mythical Fanta Islands, but canned right alongside Barq’s root beer at the Coca-Cola factory.