2024 M&A surge: How big deals are shaping the bakery and snacks landscape

Despite challenges like inflation and supply chain disruptions, M&A continues to be an attractive growth strategy as companies seek to bolster their market share, enhance product offerings and drive operational efficiencies on a global scale. This ongoing consolidation is also reshaping competitive dynamics, fostering innovation and opening new growth opportunities in developed and emerging markets.

Mars acquires Kellanova: Building a new snacking powerhouse

Mars’ purchase of Kellanova, valued at around $36bn, marks one of the most transformative mergers in the snack industry this year. With the inclusion of household names like Pringles, Cheez-It and Pop-Tarts, Mars is solidifying its move beyond its traditional sweet confections like M&Ms and Snickers. This strategic acquisition allows Mars to tap into the high-growth savory snack category, diversifying its portfolio in response to rising demand for healthier, premium snack options.

While Mars has a strong foothold in chocolates and candy, Kellanova’s expertise in savory snacks provides Mars with new avenues for expansion in global markets, particularly in regions where consumer preferences are shifting toward more balanced snacking options. Analysts expect the move could significantly bolster Mars' presence in emerging markets like Asia and Latin America, where savory snacks are gaining popularity.

Mondelez expands in China: A growth-driven strategy

Mondelez's acquisition of a majority stake in Chinese bakery company Evirth underscores the Oreo maker’s strategy to dominate the cakes and pastries sector, particularly in China’s booming bakery market. The $3bn Chinese cakes and pastries industry is expanding at an impressive 15% annual growth rate, driven by consumer preferences for premium, Western-style desserts.

Evirth, known for its popular French-style desserts, such as mille crepe cakes, mooncakes and Swiss rolls, already had Mondelez as a minority stakeholder, supplying frozen-to-chilled baked goods under brands like Oreo and Philadelphia.

This acquisition positions Mondelez to capitalize on these trends while leveraging its established brands like Oreo and Philadelphia to innovate in the space. The deal is part of Mondelez’s broader strategy of diversifying into high-growth, high-margin categories and reinforcing its global leadership in snacks.

“We’re excited about the opportunity to accelerate our growth in cakes and pastries through continuous innovation, leveraging our high-value brands to create more premium tastes and formats,” said Mondelez CEO Dirk Van de Put.

Neither financial terms nor the size of the stake were disclosed.

Rise Baking Co.: A major private equity deal

The acquisition of Rise by Platinum Equity and Butterfly Equity highlights continued interest in the US commercial bakery sector. Although financial details remain undisclosed, estimates suggest the deal could be worth $2.5bn.

This acquisition allows the two PE firms to leverage Rise’s strong market presence and operational capabilities, ensuring further growth in the competitive North American bakery market.

Rise has grown rapidly through acquisitions since its founding in 2013, supplying grocery stores and foodservice businesses across the US with cookies, muffins and other bakery products. With 20 manufacturing facilities and nearly 4,000 employees, it’s also positioned to expand its distribution network and capitalize on growing consumer demand for high-quality baked goods, generating an annual profit of $220m.

Platinum Equity and Butterfly Equity will split ownership, while Rise’s CEO Brian Zellmer will continue to oversee operations from Minneapolis.

CK Snacks snaps up Axium Foods: Swerving into tortilla and corn-based snacks

Grand Rapids-based CK Snacks has taken a strategic step to broaden its product portfolio by acquiring Axium, an Illinois-based manufacturer of private-label tortilla chips, corn chips and extruded snacks. The deal strengthens CK Snacks’ foothold in the competitive North American snack market, where private-label brands have been steadily gaining popularity.

The private label sector is chalking up rapid growth as more consumers seek affordable alternatives to established brands. Axium brings valuable manufacturing expertise in tortilla and corn-based snacks, a fast-growing segment driven by consumer preferences for healthier, whole-grain and gluten-free options, enabling CK Snacks to diversify and expand into new geographies.

Jamie Colbourne, CEO of CK Snacks, said, “Axium Foods’ expertise in tortilla chip and snack production will complement our existing product lines, enabling us to offer an even broader range of snacks. This acquisition marks a pivotal moment in our growth strategy and we look forward to working together to deliver innovative, high-quality products to our customers.”

Both companies will continue operations from their respective locations. Financial details were not disclosed.

Bay State Milling: Expanding gluten-free foothold

Bay State Milling’s acquisition of Montana Gluten Free Processors marks a pivotal moment for the company, strengthening its presence in the rapidly growing gluten-free market.

With the bolt-on of Montana’s Belgrade processing facility, Bay State adds a specialized product – SowNaked Mindfully Farmed Oats, a non-GMO, hull-less oat variety with enhanced protein content (40%) and a lower environmental footprint (50%) than traditional oats. The Belgrade facility also expands Bay State’s operations to 13 facilities across the US and Canada.

The gluten-free market continues to expand, driven by increasing consumer demand for clean-label and healthier ingredients. The gluten-free oats segment alone is forecasted to grow substantially over the next five years. By adhering to stringent gluten-free standards, including less than 5 parts per million of gluten – far surpassing FDA and Gluten-Free Certification standards – Bay State has solidified its reputation as a leader in natural, high-quality ingredient solutions.

“This investment reflects our ongoing commitment to offering trusted, natural ingredients while connecting more closely with communities in this region,” said Walker Humphries, newly appointed senior VP and GM of Oat Milling for Bay State, who will oversee the Montana facility.

QualiTech buys Ellison Bakery: Enhancing the sensory components of consumer foods

Founded in 1945, Indiana-based manufactures baked inclusions, crunches, bits, cookie components and bars that are used in a variety of applications, including active nutrition, breakfast cereals, snacks, ice cream, yogurt and beverages.

The inclusion ingredients market is becoming increasingly important for food manufacturers as they strive to meet consumer demand for more engaging experiences with their foods.  By combining their expertise, QualiTech and Ellison will be able to deliver more customized ingredient solutions to clients in retail, foodservice, and private label markets.

The deal also positions QualiTech to take advantage of growth opportunities in categories such as frozen novelties, active nutrition and snacking, all of which are forecasted to see continued demand in the coming years.

“The acquisition accelerates QualiTech’s efforts to lead the industry in providing specialty ingredients that enhance the sensory components of consumers’ favorite foods and positions our business for long-term success,” asaid QualiTech CEO Rick Pedersen.

General Mills eyes near-term acquisitions: “Smaller-size assets that we could bolt on”

After selling its North American yogurt business for $2.1bn, the Minneapolis conglomerate is turning its attention to potential bolt-on acquisitions. According to CEO Jeffrey Harmening, the company is focusing on deals in the $1bn to $2bn range, similar to its purchase of Annie’s (natural and organic foods) for $820m in October 2014 and TNT Crust (frozen pizza) in June 2022 (terms not disclosed).

This approach allows the company to strategically target growth areas that complement its existing portfolio while minimizing risk. The recent yogurt divestiture provides additional capital for these acquisitions, which will help the company solidify its leadership in high-margin categories where it already has a competitive advantage, including snacking, foodservice and pet care.

“When it comes to this year, our balance sheet is in a great place,” Harmening told analysts during his report on the company’s fiscal Q1 2025 results.

“And with this divestiture of our (North) American yogurt businesses, we felt it important to make sure that all of our investors know what we intend to do with those proceeds. As we look at the environment … it really is what we see in the near term as the kinds of things that might be available to us in terms of bolt-ons.”

He added, “If we don’t see attractive acquisition candidates, we plan to return excess cash to shareholders in the form of share repurchases.”

This disciplined acquisition strategy mirrors broader trends in the F&B industry, where companies are prioritizing high-growth, high-margin categories to stay competitive.