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Banking industry

Consolidation in the Food and Drinks Industry: Key Takeaways and Statistics

Strategic Insights

— 1 min read

The recent acquisition of Quaker Oats by Pepsi for $8 billion marks a significant shift in the food and drinks industry towards consolidation. The deal has been a long time coming, with rivals also seeking to acquire the Quaker Oats brand Gatorade, which holds 80% of the American sports drink market. This acquisition is part of a larger trend of companies seeking to widen their appeal beyond their traditional product lines.

Key Takeaways:

  • Pepsi's acquisition of Quaker Oats for $8 billion is a significant consolidation in the food and drinks industry, with the main prize being the Quaker Oats brand Gatorade, which holds 80% of the American sports drink market.
  • The food and drinks industry is experiencing rapid globalization, with companies like Pepsi standardizing their products across the globe, including the same flavor and packaging in every market.
  • Economists have observed that the universalization of products like the Mars Bar can be seen as a currency, with chocolate, sugar, and glucose being recognized commodities.
  • The conversion of building societies like Bradford & Bingley to plc status is also a notable trend in the industry, with two-thirds of shareholders opting to sell their shares shortly after the conversion.
  • The remaining building societies are relatively small compared to Bradford & Bingley and Standard Life, with the vogue for conversion to plc status appearing to have run its course.

Statistics:

  • 80% of the American sports drink market is held by Quaker Oats' Gatorade brand.
  • Pepsi is offering 2.3 of its shares for each Quaker Oats share.
  • $8 billion is the value of the acquisition.
  • $20 billion is the estimated market value of Abbey National.
  • Two-thirds of shareholders opted to sell their shares in Bradford & Bingley immediately after its conversion.
  • Butterworths (£) : £700 is the sum gained by each shareholding in Bradford & Bingley.

Sources:

  • "Byline: Peter Clarke"
  • "Quaker Oats to sell 80% of Gatorade to Pepsi for $8 billion"
  • "Rebith of B&B TODAY sees the birth of the Bradford & Bingley as a small bank"
  • "Lloyds takes over WHILE the Abbey National is in talks with the Bank of Scotland about a takeover or merger"

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