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As Growth Slows, Consumer Foods Companies Turn To Acquisitions

Growth is hard to come by for packaged food companies. The shelf-stable food industry which includes companies like ConAgra Foods (CAG) and Campbell Soup Company (CPB) are seeing sales flat-line because consumers are taking an increasingly harsh view of packaged food. Instead, consumers are flocking to fresher foods, such as organics. Growth in the organics industry is soaring, and companies are in a tough spot trying to keep up with the changing trends.

In response, many companies in the consumer goods space are turning to acquisitions to provide growth. For example, Tyson Foods (TSN) acquired Hillshire Brands last year, in an $8.55 billion deal. More recently, J.M. Smucker (SJM) announced it will take over Big Heart Pet Brands for $5.8 billion, to gain access to the higher-growth and more lucrative pet care market.