Do You Know Who Is Getting Your Grocery Money?

By Karla Paris

Six food-manufacturing giants have an even greater presence in the supermarket beyond the brand names you see on the shelf

Behemoths including Kraft, PepsiCo, ConAgra Foods, Nestlé, General Mills, and Campbell’s Soup control a larger portion of the supermarket than you may think.  According to Food And Water Watch, the consumer rights group found that regardless of how many brands appear on the shelves, your dollars are going to the same few parent companies.

Among 100 grocery categories, Food and Water Watch discovered a handful of the largest companies control an average of 63.3 percent of the sales.  In 32 of those categories, 75 percent of the sales were controlled by four or fewer companies.  When you consider that, according to the USDA, Americans spend an average of $60 Billion per month on groceries, it is a rather large piece of the pie.

Many firms sell multiple brands of the same product.  This is true across the board of food and beverage products, including organic and healthful brands typically seen as independent, but are being bought up by larger food companies. However, the biggest food-processing companies didn’t start out that way. Instead, decades were spent buying out competitors and growing into multinational powerhouses.  For example, Nestlé began as a small, family company producing milk, prepared food, water, and ice cream. After acquiring many other food companies over a century, it has become one of the largest food companies in the world.

Kraft Foods, now a processed foods industry leader, began as a family cheese business in 1909 that gradually became a massive food conglomerate through mergers and acquisition—acquiring smaller companies and merging with larger ones such as National Dairy and Phillip Morris. Kraft now produces household names and brands such as A.1., KoolAid, Lunchables, Cheez Whiz, and Jell-O.

The Great Recession dampened the pace of food mergers, but as the economy improved for businesses (if not everyone else), merger-mania returned.  As discussed previously, a serious shortage of meat across the globe has fueled a frenzy of mergers and acquisitions in the meat and poultry segments, as well. 

Buying power at the supermarket has encouraged many food manufacturers to pursue mergers, further consolidating much of the food-processing industry.  Bulk purchases drive food-manufacturing companies to merge and get bigger, which reduces the number of food processors filling supermarket shelves.  Between 1997 and 2002, most segments of the food processing industry became more consolidated.