Editor's Plate: A Wild Ride Ahead

June 30, 2014
In a month of financial wrangling, a salute to the small food and beverage companies.

May was one of those months that makes my head spin as I try to keep track of the comings and goings in the food and beverage industry.

The bad financial news poured out of my car radio every day. Shrinking unemployment figures don’t include the long-term jobless. The gross domestic product in the first quarter was revised to show a decrease. Where’s the recovery?

But if you had any doubt about the financial health of the food and beverage industry, see our industry news page. It’s apparent a number of companies have been socking away enough cash to go on a shopping spree.

By the time you read this, maybe the dust will have settled on who gets Hillshire Brands. Maybe Pilgrim’s Pride, maybe Tyson, maybe somebody not on the radar screen as I write this. What then will become of Pinnacle Foods? I’m fascinated by firms like Pinnacle, collections of once-star brands pieced together by investment firms until they can be resold in their entirety or as new small pieces.

The Hillshire story was only one of many in May. Mizkan to acquire Ragu and Bertolli from Unilever. Mondelez giving its coffee to D.E Master Blenders. Snyder’s-Lance, Shearer’s Foods. TreeHouse. Hain Celestial. I’m sure I’m missing some.

The fact is, in this staid old food business, many companies are awash in cash. Private and public companies’ valuations have been rising, interest rates remain low and venture capital firms continue to show interest in the food and beverage sector.

It’s chaotic. I mean, Hillshire couldn’t even pull off its acquisition of Pinnacle without being upstaged. But look at those company names I mentioned two or three paragraphs ago.

Except for Tyson and Shearer’s Foods, those other companies didn’t exist, at least not in their present forms and their present names, not too long ago. There are no more Pilgrims at Pilgrim’s Pride. I don’t think Lonnie “Bo” Pilgrim ever learned to speak Portuguese.

I’m sure a lot of people spent a lot of time carefully crafting D.E Master Blenders out of pieces of Sara Lee way back in 2012; soon that name will be gone, replaced by Jacobs Douwe Egberts. But for how long?

Meanwhile, I’ve attended some trade shows. Along with the Marses, Hersheys and Nestles, the annual candy show (Sweets & Snacks Expo) seemed full of ebullient up-and-comers. Sheila G’s Brownie Brittle. Perky Jerky. The Little Slugger. An even better incubator is Natural Products Expo West, which we’ve written about before. See also our small-size R&D Team of the Year, Angie’s Boomchickapop.

So many small and wonderful companies. With wild but great ideas. All aiming to delight consumers. They’re coming in on the ground floor of this crazy business. They have no idea of the wild ride ahead of them. And that’s a good thing.

This column appeared in the June 2014 issue of Food Processing magazine.

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