However, activity was on par if one counts 17 major acquisitions announced but not completed in 2004. For example, confectionery giant Wm. Wrigley Jr. plans to acquire the Altria Group, Kraft Foods' Life Saver and Altoids business. Valued at $1.48 billion, this was the largest food-related deal announced last year.
"Overall numbers held fairly steady, but the sectors varied," said Irene Kennedy, director of research and education for the US food trade association. For example, alcohol producers accounted for just four deals in 2003, while in 2004 the number jumped to 10.
Snack food producers made only three acquisitions in 2004 versus a high of 16 the previous year.
Investment firms more than doubled acquisitions over 2003, even surpassing record 2002 levels. A few - American Capital Strategies, Crunch Equity Holdings, FOCUS Brands and Willis Stein & Partners - snapped up more than one deal.
However a drop occurred in the supermarket sector. Coming off a very active 2003, the 20 deals completed in 2004 aren't a significant industry shift. "One reason that comes to mind is increased competition from alternative retailers such as supercentres and warehouse clubs may have kept supermarket players from expanding via acquisitions," said Food Institute president Brian Todd.
The Food Institute's new edition Food Business Mergers & Acquisitions 2004 can be ordered online.