Klondike Bars

New companies entering the market, mergers, and globalization, on pricing and the sustainability of profits: Identify the type of merger activity in your industry-horizontal, vertical, or conglomerate-and explain why you made that choice. The food and beverage industry is ripe with companies already established in the market. These companies, who have mostly been operating in food and beverage for a while, are developing and releasing new products to further enhance their profitability, and looking overseas to maintain global success as well. For example, Klondike, which has produced Klondike Bars for years, is now introducing Kandy Bars, which puts a new twist on an already classic product. Dunkin’ Donuts is introducing a new breakfast sandwich to their menu. The chicken apple sausage breakfast sandwich will
be available to customers as one of Dunkin’s already popular breakfast options.
In addition, companies like Sonic Drive-In and Yoplait are adding enhancements and options to the same products instead of releasing new products into the market. As part of its Summer of Shakes, Sonic Drive-In is offering 50 new flavors of shakes and slushes, including the new slush flavor blue raspberry made with Nerds candies. Yoplait, a major maker of yogurt, is adding some seasonal flavors for a limited time, including light margarita and original sweet tea. An example of an expanding global company home based here in the United States is Starbucks. Starbucks has maintained and successfully built its globalization network and empire, and to this day are still making expansion plans. As of middle of June 2014, Starbucks is looking to open 400 additional stores in China
by the end of next year, adding to the 1,100 locations in the country already. These examples show established companies creating new products and advancements to products to enhance profitability, and globalization in the food and beverage industry. Although we have seen situations where new companies enter the market in food and beverage, the fact that already established firms rule the industry has led to less new companies entering the market, and more firms merging or being acquired. For instance, Pacific Northwest Kale Chips formed a joint venture with Made in Nature, a firm which processes organic dried fruit products. The new venture, entitled Pacific Superfood Snacks, will feature products from the newly formed company and Made in Nature brands. Another example of merger activity in the food and beverage industry comes from Tyson Foods, Inc. acquiring Hillshire Brands. Tyson Foods, Inc. which is already one of the industry leaders in prepared foods purchased Hillshire Brands for approximately $8.55 billion. This move was made to specifically enhance the prepared breakfast sector of Tyson Foods, Inc. These examples of merger activity, including both a horizontal merger and joint venture, represent a majority of mergers and acquisitions in this unique market.

References
Nunes, K. (2014). It’s official! Tyson Foods to acquire Hillshire Brands. Food Business News. Retrieved from http://www.foodbusinessnews.net/articles/news_home/Business_News/2014/07/Its_official_Tyson_Foods_to_ac.aspx?ID={EECC5CDB-7416-43E5-9D42-E8BB99A78512}
Watrous, M. (2014). Organic snack makers form joint venture. Food Business News. Retrieved from http://www.foodbusinessnews.net/articles/news_home/Business_News/2014/07/Organic_snack_makers_form_join.aspx?ID={F1BEFBC0-6D01-4E70-911F-2B9530D6C71F}
Watrous, M. (2014). Starbucks toasting to China. Food Business News. Retrieved from http://www.foodbusinessnews.net/articles/news_home/Business_News/2014/06/Starbucks_toasting_to_China.aspx?ID={BE353880-4C65-4331-BEB8-DB39E2BF6DED}
Young, M. (2014). Slideshow: New products from Klondike, Cascade Ice, Yoplait. Food Business News. Retrieved from http://www.foodbusinessnews.net/articles/news_home/New-Product-Launches/2014/05/Slideshow_New_products_from_Kl.aspx?ID={B0EB55C4-5961-4FB7-93EE-EC475BEAA2B5}