Food industry consolidation – overview
- Most global food brands are owned by a small number of multinationals
- As growth slows, acquisitions offer faster access to innovation
- M&A value is rising as companies pursue fewer larger deals
- Ingredients suppliers are becoming strategic assets through consolidation trends
- Consolidation boosts scale yet may reduce competition and choice
There are literally hundreds of thousands of food and beverage brands in existence across the globe today.
But most of them are no longer or have never been independent.
Over the past few decades, consolidation has reshaped the industry, meaning many products appearing to compete on supermarket shelves are actually owned by the same small group of companies.
In fact, a significant share of the world’s best-known food and beverage brands are in the hands of just a few majors, including Nestlé, PepsiCo, The Coca-Cola Company, Danone, The Kraft Heinz Company, Mars, Inc., Mondelēz International and Ferrero Group.
“Consolidation has increased significantly at the category and supply-chain level,” says Nandini Roy Choudhury, principal consultant for food and beverage at analytics group Future Market Insights.
The trend has been driven largely by mergers and acquisitions, as manufacturers seek new avenues for growth, strengthen their market positions and expand into emerging categories.
M&A drivers
“Large companies are acquiring growth,” says Choudhury,
Buying an established brand can be faster and less risky than launching a new one, particularly in high-growth categories such as functional nutrition, healthier snacks and premium drinks.
But while M&A activity remains high, it’s also becoming more selective.
In 2025, global consumer-sector M&A value increased substantially, even though transaction volumes remained broadly stable, indicating that buyers were concentrating capital on fewer, larger strategic transactions.
That same emphasis on focus and scale is also reshaping companies from within. Rather than managing sprawling portfolios, manufacturers are increasingly looking to simplify their offerings and direct resources towards the brands and categories with the strongest growth potential.
Consequently, CPGs such as PepsiCo and Nestlé are selling off underperforming brands, while increasing investment in priority brands and functional innovation.
And this drive towards simplification isn’t limited to multinational food and beverage giants. Across the industry, investors are looking to build scale in different ways.
“We’re seeing private-equity-backed platforms combine multiple founder-led brands, manufacturers and distributors before selling the resulting group to a strategic buyer,” says Choudhury.
M&A moving upstream
One of the biggest trends in consolidation is the growing involvement of ingredient suppliers. As food and beverage manufacturers race to meet demand for healthier, more functional products, access to the right ingredients has become a strategic priority. Competitive advantage is not just about owning consumer-facing brands, but also about managing the technologies and expertise that sit behind them.
“Companies want greater control over sweeteners, texturants, proteins, flavours and functional ingredients used in reformulated products,” says Choudhury. “The proposed acquisition of Tate & Lyle by Ingredion illustrates the strategic value being placed on capabilities that support sugar reduction, protein enrichment and specialised nutrition.”
As a result, ingredients businesses are now being viewed not simply as suppliers, but as strategic assets that can help manufacturers respond more quickly to changing consumer preferences and evolving regulatory requirements.
The growing importance of ingredient technologies also draws attention to an ongoing debate – does consolidation help or hinder innovation?
Innovation and consolidation
Consolidation is often associated with reduced competition, but it can also provide smaller businesses with the resources needed to scale new ideas and bring them to a wider audience.
Smaller brands can get greater access to capital, technical expertise, regulatory support, international distribution and large retail accounts, making it easier to develop and scale innovation, explains Choudhury.
Moreover, a successful product can be scaled into markets that could otherwise take years to reach.
The flip side of that is that slow decision-making, often associated with larger companies, can slow the rate of innovation itself. New product development can also be subject to aggressive margin targets or forced to use standardised ingredients and manufacturing processes.
Large organisations may also prioritise extensions of proven brands over riskier, genuinely new ideas.
“The important distinction is between invention and scale,” says Choudhury. “Challenger brands are often better at identifying new consumer needs, while large companies are usually better at scaling successful ideas.”
What does it mean for consumers?
While consolidation is largely driven by business strategy, its effects are increasingly being felt by consumers. Despite the huge number of products lining supermarket shelves, many are owned by the same parent companies.
In other words, “visible brand choice does not always represent true diversity of ownership,” says Choudhury.
Supporters argue that larger manufacturers can use their scale to improve distribution, invest in product development and bring innovative products to market more quickly.
Critics, however, argue that greater concentration can reduce competition, limit opportunities for smaller brands and increase the influence that a handful of companies have over pricing, product development and shelf space.
Although consolidation does not necessarily lead to less choice, it can mean that many seemingly different brands are ultimately being managed by the same owner.
The future of food consolidation
Despite the industry’s ongoing consolidation, independent brands continue to play a critical role in driving innovation.
Many of today’s fastest-growing trends, from gut health and functional beverages to premium snacks and high-protein products, first emerged from smaller challenger brands before attracting the attention of larger players. But, for now, there are few signs that consolidation is slowing.
As manufacturers continue their search for growth, ingredient suppliers move further upstream and private equity firms build scaled platforms, ownership of food and beverage brands is likely to become even more concentrated.
Yet the industry’s next big ideas will almost certainly continue to come from entrepreneurial founders, maintaining the delicate balance between innovation and scale.
