KPMG’s Elliott Marer on pressure and possibilities amid a food industry in flux
The food industry has seen a flurry of mergers, acquisitions and restructurings in recent months. From Ferrero's plans to buy WK Kellogg and Mars merging with Kellanova to PepsiCo acquiring soda brand Poppi, big moves are reshaping the landscape. What’s behind these major food-sector deals in 2025? Can we expect more in the future? And are there opportunities industry players can take advantage of?
For answers and insights, we turned to Elliot Marer, partner and national industry leader for consumer & retail, KPMG in Canada.
This interview has been edited for length.
What common themes or drivers are behind these major deals in 2025?
Firstly, companies are chasing scale and efficiency. With inflation and high costs squeezing profit margins, big food makers see mergers as a way to cut costs and boost bargaining power. By combining, they can streamline operations (think shared supply chains or marketing) and protect profits. Secondly, they’re responding to changing consumer tastes. Rather than developing new products from scratch, giants are buying innovative brands that tap into trends like healthier snacking, functional drinks or plant-based foods. Lastly, private equity firms and other investors have been very active in the food sector, which motivates strategic buyers to act fast or risk missing out.
And many of these acquisitions have a global angle—companies want to expand into new regions or secure their supply chains. Essentially, the 2025 food deals are about boosting growth, gaining scale, and staying relevant in a tough, evolving market.
What do these big changes mean for the grocery industry?
For Canadian grocery retailers, supplier consolidation is a double-edged sword. On one hand, if several brands you stock suddenly belong to one giant supplier, that supplier has more clout in price negotiations—which can squeeze grocer margins. We’ve already seen Canadian grocers under pressure over pricing, and dealing with even larger vendors could add to that. In response, retailers will likely lean even more on their private-label brands.
And for packaged goods companies and local manufacturers in Canada?
These changes raise the stakes. They might find themselves up against merged behemoths with huge resources. This could force smaller players to differentiate with unique products or consider teaming up themselves. We might see some Canadian companies merge or form partnerships to survive in categories now dominated by a few big globals.
Overall, the food supply chain in Canada could end up with fewer, larger players on both the manufacturer and retailer side.
What are the opportunities?
For one, combined companies can be stronger and more innovative. This often leads to new or improved products. They also eliminate duplicate costs—and those savings can be reinvested in things like product development or kept as a buffer to offer better pricing. Another opportunity is expanding good brands to new markets. If a Canadian brand gets acquired by a global giant, that brand suddenly gains access to the giant’s international retail channels—so a local success story could become a global one. On the flip side, big companies sometimes sell off parts of their business that don’t fit their new strategy. Those spin-off brands are opportunities for others. Additionally, tough times often spur collaboration and creativity. Companies that don’t want to fully merge might form partnerships or joint ventures—say a distribution partnership—which can later lead to deeper integration if it works well.
Looking ahead, what can we expect?
Going forward, we anticipate M&A activity will remain strong in the food and CPG sector. In fact, KPMG’s recent surveys of executives indicate that 2025 could be one of the busiest years for deals in a while—confidence is coming back as interest rates and inflation moderate. That said, the nature of deals might shift slightly. We’ve seen the blockbuster mergers. Now many companies will focus on digesting those big acquisitions—making sure the huge deals actually deliver the benefits. So, in the near term, I’d expect a lot of smaller, strategic acquisitions rather than only mega-mergers.
Which subsectors do you think are ripe for consolidation in the near term?
First, Canada’s multicultural consumer base is driving demand for authentic ethnic food products. As their products go mainstream, bigger CPG companies will likely acquire some to strengthen their own ethnic product lines.
Plant-based meat and dairy alternatives: I anticipate a shakeout: The strongest brands could get acquired by traditional food giants looking to diversify their protein offerings. There may also be mergers of equals among plant-based companies to pool resources.
E-commerce grocery and meal delivery: I suspect consolidation here, possibly led by traditional retailers.
Consumers’ appetite for ready-to-eat meals and convenience foods is growing. Big food companies and grocers are eyeing this space because it’s a way to grow sales. I expect larger companies to buy some of these ready-meal specialists.
