Mars bids for Kellanova - implications for the sector

In August this year, Mars bid for Kellanova. The deal will be one of the largest transactions in the consumer food space ever and will combine two large snacking companies. As a result, Mars Snacking will have a broad portfolio in sweet and savory snacks.

In this note, the RaboResearch Consumer Foods team looks at the implications of this transaction for the sector.

First, we examine global snacking and growth areas. Snacking, especially savory snacking, is clearly one of the few areas of growth in global consumer foods. We also look at the geographies in which snack sales are growing, with developing regions leading the way. However, apart from the growth, branded foods also face a risk. Private label is growing everywhere and could be a threat.

Then, we highlight the sustainability efforts the combined entity will focus on. As Mars stated in the press release, the combined business will be part of the Mars net-zero commitment.

Finally, we look at the health and nutrition trends and initiatives that might impact the US and global snacking space.

Overall, there is more to come in branded food. At this point in time, the way to value creation might just be M&A.