Merger mania has gripped the food & beverage industry over the past few years. Not the politely labeled, in-name-alone mergers like General Mills buys Blue Buffalo, but marriages of titans, if not equals. Most involve the acquirer or the bigger company using the smaller one to stretch into a new food category. That's proven to be a risky strategy, although no company seems to be satisfied with success in its home category anymore.
And like 33% of all human marriages, not all of these business relationships are working out.
Wayne-Sanderson Farms, our 2025 Processor of the Year, is one of the exceptions. When we did the research for our Top 100© list back in August, it was apparent most poultry companies enjoyed a profitable 2024. But even among those happy chicken processors, Wayne-Sanderson Farms stood out.
Technically, it was an acquisition: Smaller Wayne Farms, with the backing of Cargill and ContiGroup, acquired larger Sanderson, and maybe because of the size differentials it really looks and feels like a merger. And it’s working out beautifully. Undoubtedly, private ownership is a big part of the reason. As Wayne-Sanderson's CFO T.J. Wolfe put it, "Our owners have a long-term view over investments and growth, and Kevin [McDaniel, CEO] and I can make investments and decisions for the longer-term versus thinking quarter to quarter."
Maybe staying focused on poultry, rather than getting into coffee or baked goods, is another reason.
Kraft Heinz is an example of a bad marriage. The new company's sales were $26.5 billion one year after the 2015 merger. In the years since, only 2023 sales eclipsed that, and only by $153 million. Last year’s sales were $25.8 billion. The stock price peaked at $92.20 a share in mid-2017; it was $26 in late June, just before the first story of a possible split. And split they will, the company announced, sometime next year.
So will the short-lived combo of Keurig and Dr Pepper Snapple Group.
J.M. Smucker Co. was giddy when it won the 2023 bidding for Hostess Brands. The jelly company is still trying to figure out how to make Twinkies and other snack cakes into a profitable business.
More recently, WK Kellogg Co, the cereal half of the former Battle Creek company, closed out 2024, its last year of existence, with a $55 million decline in sales, with net income down 35%. We may never know how it truly fares under new owner Ferrero Group, which completed that acquisition this September.
Meanwhile, the other half of the former Kellogg Co., Kellanova, is still awaiting European approval of its acquisition by Mars Inc. – at least as of this writing. Until that deal closes, Kellanova keeps publishing regressive financial reports. Through six months, sales were down $100 million; so was operating profit.
Maybe those last two will work out, although we'll never know the pain along the way. As private companies, Mars and Ferrero can play the long game, take some heat and endure some hits along the way to making their acquisitions successful. They only need to satisfy their owners, mostly family members. That’s a luxury not enjoyed by publicly held companies.
Whatever the reasons, Wayne-Sanderson is working. Our three-part coverage – into the company's business, product development and manufacturing – begins on p24.
Wayne-Sanderson makes a fine Processor of the Year, our 21st (the list is on p27). Our criteria for this honor include sound financial performance, innovative product development, leading manufacturing technology, managerial excellence, general industry leadership and service to the community. Wayne-Sanderson excelled at all of those.
About the Author
Dave Fusaro
Editor in Chief
Dave Fusaro has served as editor in chief of Food Processing magazine since 2003. Dave has 30 years experience in food & beverage industry journalism and has won several national ASBPE writing awards for his Food Processing stories. Dave has been interviewed on CNN, quoted in national newspapers and he authored a 200-page market research report on the milk industry. Formerly an award-winning newspaper reporter who specialized in business writing, he holds a BA in journalism from Marquette University. Prior to joining Food Processing, Dave was Editor-In-Chief of Dairy Foods and was Managing Editor of Prepared Foods.