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The short of it is that we’re living in two different economies at once, and Big Food might have bitten off more than it can chew.

Looking like a doozy today:

Let’s get started.

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Remember when economists said the rising tide lifts all boats? Turns out that only works if you own a boat. The Federal Reserve just dropped data showing the top 1% of American households now control 31.7% of all U.S. wealth, the highest concentration since tracking began in 1989. That's roughly $55 trillion in assets sitting at the top, which is about equal to what the bottom 90% of Americans own combined.

The culprit? Stock prices went vertical in 2025 thanks to AI, and 87% of stock owners are households pulling in $100,000 or more. Meanwhile, middle-income families have their wealth locked up in homes that aren't appreciating like they used to, and lower-income households are drowning in debt. Higher-income wage growth clocked in at 3% in December, while middle- and low-income earners saw 1.5% and 1.1% respectively.

If you’re tied up in retail, it’s important to know the letter of the day. Premium brands, luxury travel, high‑end services, and anything tied to asset prices keep winning. Discount retailers and mass‑market consumer names? They are fighting a consumer who is tapped out and increasingly cranky. The economy can look strong on paper, while a huge chunk of households feel broke. Both things are true, and markets are trading the first one way harder than the second.

The packaged food industry is having a quarter-life crisis, and the solution apparently involves corporate therapy and conscious uncoupling. Kraft Heinz is preparing to split later this year, basically undoing the mega-merger that Berkshire Hathaway and 3G Capital championed a decade ago. Keurig Dr Pepper is planning something similar after it finishes acquiring JDE Peet's. And Unilever already spun off its ice cream business into The Magnum Ice Cream Company, because apparently nobody wants frozen treats bundled with mayonnaise anymore.

Whatever the flavor, the result is the same: nearly half of all M&A activity in consumer products last year came from divestitures. Over the next three years, 42% of M&A executives in the space are preparing an asset for sale. That's a lot of brands looking for new homes. So what's driving the fire sale? Consumers have been abandoning the inner aisles of grocery stores for fresh produce and protein for over a decade. GLP-1 drugs are literally killing people's appetites for salty snacks. And RFK Jr.'s "Make America Healthy Again" agenda has regulators shining a brighter spotlight on ultra-processed everything.

Meanwhile, upstart brands like Poppi (snagged by PepsiCo for $1.95 billion) and LesserEvil (grabbed by Hershey for $750 million) are proving that differentiation and community-building beat legacy scale. Barry Callebaut is reportedly considering spinning off its cocoa business. Nestle is eyeing sales of its water unit, Blue Bottle coffee, and underperforming vitamin brands. Big Food got too big, too complex, and too slow. Now it's slimming down whether it likes it or not.

Analysis provided by ​altindex.com​.

Remember to always DYOR.

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Current price: $144.89
Target price: $184.85

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