Food Giants Face Tough Decisions Amid Rising Popularity of Store Brands
As grocery prices continue to rise, a new national survey by retail intelligence company RDSolutions reveals that 86% of U.S. shoppers have switched to private label products for at least some of the items they regularly purchase.
Recent data from the Private Label Manufacturers Association and insights firm Circana affirms that sales of store-brand items outpaced sales of national-brand products during the first half of 2025. That research shows that store-brand dollar sales surged nearly four times faster than those of national brands.
With consumers spending less on increasingly expensive name-brand packaged food, a number of food giants are making drastic business moves that have dominated headlines halfway through 2025. From acquisitions to bankruptcy to spinoffs, these food companies are strategizing on the best ways to get back in shoppers' grocery carts.
CPG Business Review
In what has been described by analysts as the largest CPG transaction since the merger between Kraft and H.J. Heinz in 2015, Mars Inc. made headlines over its plans to acquire Kellanova for $35.9 billion. Originally revealed in August of last year, the deal only recently cleared U.S. regulatory hurdles.
While exact timing can’t be predicted, Mars and Kellanova expect the acquisition to close toward the end of 2025. Once the transaction is complete, Kellanova will become part of Mars Snacking, headed by Global President Andrew Clarke and based in Chicago. Mars plans to further nurture and grow Kellanova’s brands, including the acceleration of innovation to meet evolving consumer tastes and preferences, local investment to expand reach, and the introduction of more better-for-you nutrition options.
The Kellogg’s brand again gave the industry something to talk about earlier this month, when it was revealed that Italian company The Ferrero Group was acquiring WK Kellogg Co for $3.1 billion. The acquisition includes the manufacturing, marketing and distribution of WK Kellogg’s famous cereal portfolio, which includes the Frosted Flakes, Froot Loops and Rice Krispies lines.
"Joining Ferrero will provide WK Kellogg Co with greater resources and more flexibility to grow our iconic brands in this competitive and dynamic market," said Gary Pilnick, chairman and CEO of WK Kellogg Co. "We look forward to collaborating with their team to deliver on the great promise of cereal, explore opportunities beyond cereal, and help us bring our best to consumers every day."
Meanwhile, General Mills Inc. completed the sale of its U.S. yogurt business to Lactalis for $1.2 billion. The divestiture includes the U.S. operations of several yogurt brands, including Yoplait, Go-Gurt, Oui, Mountain High and :ratio, as well as manufacturing facilities in Murfreesboro, Tenn., and Reed City, Mich. The business will now operate as a new Lactalis USA division called Midwest Yogurt.
Further, Conagra Brands Inc., sold its century-old Chef Boyardee brand to the Hometown Food Co. in a $600 million deal. Through this agreement, Hometown Food will acquire an 820,000-square-foot manufacturing facility in Milton, Pa., along with all assets and operations dedicated to the Chef Boyardee line, except for the brand’s frozen skillet meals. Those items will be licensed by Hometown to Conagra. The transaction is expected to close during the first quarter of Conagra's fiscal year 2026, which is the second quarter of the 2025 calendar year.
Additionally, Del Monte Foods Corp., one of the country’s largest producers, distributors and marketers of branded food products, recently revealed that it’s looking for its own buyer. The nearly 140-year-old company filed for Chapter 11 bankruptcy as part of an overall strategic balance-sheet restructuring. Del Monte’s portfolio consists of such brands as Del Monte, Contadina, College Inn, Kitchen Basics, JOYBA, Take Root Organics, and S&W.
“This is a strategic step forward for Del Monte Foods. After a thorough evaluation of all available options, we determined a court-supervised sale process is the most effective way to accelerate our turnaround and create a stronger and enduring Del Monte Foods," said Greg Longstreet, president and CEO of Walnut Creek, Calif.-based Del Monte Foods. "With an improved capital structure, enhanced financial position and new ownership, we will be better positioned for long-term success."
And then there’s Kraft Heinz, which is reportedly considering spinning off a part of its grocery portfolio. A story in The Wall Street Journal cited sources who claimed that Kraft Heinz will keep some of its signature brands, including Heinz ketchup and Grey Poupon mustard, while selling off others to a separate entity. The alleged deal could be worth $20 billion, according to the report.
Other lesser-known deals are also making an impact on the national-brand space. For instance, The Hershey Co. is acquiring the healthy-snack company LesserEvil. Hershey will fold this brand into its stable of other salty snack brands that include SkinnyPop, Dot’s Homemade Pretzels and Pirate’s Booty. The deal is expected to close later this year.
“Investing in LesserEvil brings a multi-category, better-for-you snacks platform to extend our offerings into new categories and forms, reaching new consumers in more eating occasions,” said Michele Buck, Hershey’s president and CEO.
Also, Flowers Foods Inc. has officially acquired Simple Mills, a natural food brand that offers crackers, cookies, bars, baking mixes, and pancake and waffle mixes. The deal broadens Flowers’ portfolio of packaged bakery foods. With the acquisition valued at $795 million, Flowers offers more natural options to complement its existing brands that include Nature’s Own, Dave’s Killer Bread, Wonder, Canyon Bakehouse and Tastykake.
This article was originally published on sister brand Progressive Grocer.