What’s Behind the Wave of Mega Food-Company Breakups—and Why It Matters from the Grocery Aisle to the Farm Gate

By Aidan Connolly, Global Agri-Tech C Suite Executive, Chairman/Director, Investor, Academic/Author, President of AgriTech Capital. Reprinted with permission. See original article here. (November 25, 2025)

Over the past two years, several household-name food groups have split or announced plans to split into more focused companies. Kellogg completed its 2023 separation into Kellanova (snacks and international) and WK Kellogg Co (North American cereal). Unilever followed in 2024 by announcing a spin-off of its global Ice Cream arm (Ben & Jerry’s, Magnum, Wall’s), targeting completion by the end of 2025. And in September 2025, Kraft Heinz unveiled plans to separate into two “scaled, focused” businesses. Though different in detail, these de-mergers share a common logic: focus, speed, and capital discipline in a market where growth and margins vary widely by category.

Why now?

First, categories have diverged. Snack and “treat” brands tend to grow faster and command higher margins than mature center-store staples like boxed cereal. Kellogg’s rationale was explicit: let a snacks-led Kellanova run a different playbook from a cereal-focused WK Kellogg Co rather than force a one-size-fits-all model. In theory, that unlocks sharper marketing, portfolio pruning, and M&A tailored to each category’s economics.

Second, investors are pressuring boards to simplify. Unilever framed its ice-cream separation as part of a “Growth Action Plan,” paired with a major productivity program and headcount cuts to lift returns. Separating a seasonal, capex-intensive category with its own supply chain and freezer logistics lowers managerial complexity for “RemainCo” and gives the new company freedom to invest behind its own cycle. Markets initially applauded the clarity.

Third, portfolio agility matters when consumer tastes and cost structures are shifting. The rise of private label, GLP-1 weight-management drugs (e.g, Ozempic) is altering snacking and portion dynamics, and stubborn input volatility (from cocoa to dairy fats) all reward speed. Focused companies can reset pricing architectures, innovate pack sizes, and hedge inputs without cross-category trade-offs. Indeed Mars move to buy the maker of Pringles shows that a different type of consolidation maybe coming. (The flipside: without a conglomerate’s internal “shock absorbers,” volatility can hit harder—see below.)

Finally, corporate finance hopes that breakups can surface “hidden” value, because investors can price a pure-play snack business differently from a mixed food conglomerate. It can also let each entity pursue its optimal capital structure: a steady, cash-generative cereal company may target higher dividends; a faster-growing snacks or ice-cream pure play may lean into brand investment, digital retail media, and bolt-on acquisitions.

What It Means for Farmers and Upstream Suppliers

Procurement will become more specialized. A de-merged cereal company or ice-cream pure play can set crop-specific strategies—on oats, corn, or dairy fats—without negotiating trade-offs against unrelated categories.

That may bring:

a). Tighter contract specs, stronger sustainability requirements (scope-3, deforestation-free, animal-welfare data).

b). More category-linked risk-sharing models.

The result is greater clarity but potentially tougher compliance, data-reporting obligations for farmers.

Counterintuitively, some farmers could gain bargaining power if they supply constrained inputs essential to a pure play’s earnings (e.g., high-quality cream or cocoa). Others may face more volatility because a de-merged buyer has less ability to spread commodity shocks. In dairy, for example, restructurings on the processor/co-op side illustrate how ownership and capital choices ripple back to farm economics.

Ireland’s Glanbia/Tirlán transactions in recent years—culminating in 2025 share spin-outs and balance-sheet moves—show farmer-owned businesses repositioning to fund growth and reward members amid changing market structures. Kerry Group has arguably done the same thing by spinning out its Dairy business.

While not a classic “demerger” of a branded food conglomerate, they underscore the broader shift: simpler, more focused entities aligning capital with category realities—and asking their farmer/ food producer suppliers to do the same.

The New Playbook

Expect more portfolio surgery. Announced or rumored separations and dual listings signal that boards see more value in clarity than in empire-building. For strategists, three implications stand out:

1. Supply chains will be rewired for speed. Look for more near-sourcing, shorter contracting cycles, and deeper data ties (traceability, quality signals) with growers and processors tied to the de-merged company’s category economics.
   

2. M&A will get cleaner. Pure plays can buy adjacencies without cross-category antitrust complexity, while their ex-parents can trade out of non-core assets more quickly—illustrated by portfolio moves surrounding the Unilever ice-cream separation and the post-split deal chatter around Kellanova.
   

3. Volatility management moves center stage. Without conglomerate buffers, risk tools—crop-year contracting, multi-year formula pricing, regenerative premiums tied to yield stability—become strategic, not tactical. Farmers who can document outcomes (carbon, water, animal health) will have an edge as pure plays translate investor expectations into supplier scorecards.

In short, the “new” food model is really an older idea refreshed: focus on what you’re best at, finance it appropriately, and move faster than the shelf does. Consumers should see tighter assortments and clearer value propositions; farmers will see more exacting, data-rich relationships with buyers. The companies that turn separation into sharper execution—rather than a one-time financial event—will set the tone for the next decade of food.

What It Means for Consumers

Expect sharper brand focus and, in many cases, faster innovation. A snacks-led company can double down on convenience formats, protein-forward or permissible-indulgence propositions, and retailer-exclusive drops aligned to e-commerce and loyalty media—moves that can feel sluggish inside a sprawling conglomerate. Conversely, a cereal-pure play can concentrate on value restoration (promo depth, pack architecture) and recipe renovations to win back lapsed shoppers. On price, effects cut both ways: loss of cross-subsidy across categories may make each unit more disciplined on margins; however, single-category firms often get more surgical with promotions and pack-price ladders, which can benefit deal-seeking shoppers. The bigger variable is input cost volatility. If cocoa, sugar, or dairy spikes, a de-merged ice-cream or snack company has fewer internal offsets—raising the chance of quicker list-price or shrinkflation responses.

Retail dynamics may also shift. Focused suppliers often tighten SKU counts to back proven winners, improving on-shelf availability but reducing long-tail variety. At the same time, pure plays sometimes prove nimbler partners to grocers’ retail media networks and data collaboratives, which can translate into more relevant promotions and quicker new-item resets in store and online.

Four Forces are Changing the Food Business

De-mergers, spin-outs and product portfolio rationalizations show that four forces are changing the food business. These are (1) the impact of GLP-1 in reshaping demand for snacks (2) the conglomerate model no longer being fit for purpose for food companies (one-size fits all) (3) investors demanding clarity and simplicity in the portfolio or (4) unlocking value from underperforming business. 

For food suppliers and farmers these changes represent opportunities that they would be unwise to ignore.

ABOUT AIDAN CONNOLLY

Aidan Connolly is CEO of AgriTech Capital LLC, an advisory resource for both new and established companies working at the interface of agriculture and technology, and president of the

International Food and Agribusiness Management Association (IFAMA). He also is a chairman/director, investor, academic/author and just last week was celebrated as the Agricultural Innovator of the Year at the AgriNext Conference 2025 in Dubai, UAE.

Connolly's leadership experience ranges from strategy to operations to production, as well as developing sales programs and cohesive teams that deliver strong results. While born in Ireland, Connolly has worked in over 100 countries, lived in six, and speaks five languages. He holds an adjunct professor of marketing at the Smurfit School of Business, University College Dublin, the China Agricultural University in Beijing, and North Carolina State University in the USA.

Connolly contributes to a wide range of publications in agriculture and business, including Forbes. In 2022 he published his second book, The Future of Agriculture, a collection of essays highlighting the latest trends and challenges that are rapidly reshaping agriculture, like AI and ChatGPT (for a free download of new chapter about these industry disruptors, got to www.agritechcapital.com/books).Connect with Connolly on LinkedIn: https://www.linkedin.com/in/aidanjconnolly/.