Welcome to this week’s Food Exec Brief, your strategic intelligence roundup for food and beverage manufacturing leaders. This week, we’re covering:
- The ISM Manufacturing PMI held at 54.5 in September, its ninth consecutive month of expansion. But the prices index rose to 77.9%, with manufacturers citing tariff costs, pricing volatility, and geopolitical disruption.
- Hormel is paying $1.055 billion for Brakebush Brothers, a family-owned chicken processor generating $1.2 billion in annual sales. It’s the latest in a Q3 wave of food M&A that spanned protein, snacks, and grocery.
- California’s governor signed AB 2244 into law on September 28, launching a state-run non-UPF certification program, while consumer food safety confidence dropped to 31%, down nine points in nine months.
Several months of manufacturing growth comes with a 77.9% prices index
Manufacturing expanded for the ninth consecutive month in September, with the ISM PMI at 54.5%, while the prices index surged to 77.9%, up 6.8 points from August. New orders rose to 55.3%, production to 56.7%, and backlog of orders climbed to 56.4%. Demand seems to be intact. But the prices sub-index, driven by steel, aluminum, and tariff pass-through, suggests margin compression. Respondents cited pricing volatility (46%), tariffs (34%), and geopolitical disruption (30%) as their primary obstacles. (Learn more)
Six major manufacturers are responding to cost pressure with structural changes. Constellation Brands has generated $600 million in savings since 2023 through procurement, logistics, and operations and is targeting $200 million more by fiscal 2028. General Mills is pursuing $1 billion in savings by 2030 and reported a 40% year-over-year increase in logistics costs, though spot rates represent only 7% of its total freight spend. Nestlé is reducing SKUs and consolidating distributors in China. All three are counting on procurement discipline and supply chain consolidation rather than revenue growth. (Learn more)
Five megadeals are changing category control, and Hormel added a $1B chicken platform
Five megadeals are restructuring global food and beverage, relying on bigger scale in snacking and broader geographic reach to create durable competitive insulation. Mars acquired Kellanova for $36 billion, pushing its global snack market share from 4% to 6% and adding Pringles, Cheez-It, and Pop-Tarts to its portfolio. Keurig Dr Pepper acquired 96.22% of JDE Peet’s for $18 billion, tripling its coffee operations across more than 100 countries, and plans to split into two publicly traded companies by year-end. McCormick’s pending $15.7 billion combination with Unilever Foods is expected to close by mid-2027. (Learn more)
At the $1 billion level, Hormel is adding a chicken platform its incoming CEO calls one of the most attractive growth categories in protein. Hormel is acquiring Brakebush Brothers, a family-owned Wisconsin processor founded in 1925, for $1.055 billion. Brakebush generated $1.2 billion in net sales over the last 12 months and operates five production facilities and two R&D labs. Incoming CEO John Ghingo cited chicken’s growth trajectory as the primary driver, with the deal expected to close in Q1 of Hormel’s fiscal 2027. The acquisition strengthens Hormel’s foodservice platform at a time when chicken demand is outpacing other proteins. (Learn more)
California’s non-UPF label law is signed, and consumer food safety confidence fell to 31%
California signed AB 2244 into law on September 28, creating a state-run non-UPF certification program with no finalized federal definition yet to anchor it. Manufacturers can apply to accredited certification agents to use a “non-ultra-processed certified” label on packaging. The California Department of Health will oversee the program, and the state must accredit certification agents by June 1, 2029. HHS and USDA have a proposed federal UPF definition under final review, but California’s law doesn’t specify which definition will govern certification standards. That’s the operational unknown for manufacturers, and companies with reformulation flexibility and cleaner ingredient lists now have roughly 2.5 years to plan for potential impacts. (Learn more)
Consumer food safety confidence dropped to 31% in August, a nine-point decline in nine months. A University of Illinois and Purdue University survey of roughly 1,000 adults found 49% changed their grocery purchases in the prior month due to foodborne illness concerns. The FDA’s food traceability rule, which would require lot-level records for high-risk foods available within 24 hours on request, won’t be enforced until July 20, 2028, and the USDA withdrew its Salmonella framework for raw chicken and turkey in April 2025. While no official investigation has linked either reversal to a specific outbreak, declining consumer confidence is concerning for both retailers and brands. (Learn more)
