Industry
Consumer Packaged Goods and Distribution
Enabling Product Innovation and Omnichannel Experience in CPG
Highlights
- Supply chain strategy has become a core driver of value in mergers and acquisitions (M&A) in the consumer-packaged goods (CPG) sector as companies respond to geopolitical disruption, regulatory pressure, and changing consumer expectations.
- CPG companies are using acquisitions to regionalize supply networks, improve resilience, and reduce dependence on fragile global ‘justintime’ models.
- Digital capabilities such as advanced analytics, artificial intelligence (AI)based demand sensing, and control towers are critical for high operational efficiency and data-driven decision support.
- Embedding supply chain considerations in predeal, integration, and postmerger phases is essential to realizing synergies and sustaining longterm competitiveness after an M&A.
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The big picture
The geopolitical and trade disruptions in 2025-26 have shown the business world that resilience alone is not enough for success. What one also needs is the ability to anticipate, adapt, and reshape the organization as per dynamic market conditions, especially in an industry like the consumer-packaged goods (CPG), which is estimated to grow rapidly in the coming years.
The global CPG market is projected to expand at a significant pace over the next few years. This growth profile is driven by rising digital commerce, expansion in emerging markets, and increasing consumer demand for healthfocused and ethically aligned offerings.
So, as companies navigate geopolitical disruptions, inflation, shifting consumer expectations, and rising regulatory complexity, they are actively looking at mergers and acquisitions (M&A) to strengthen their product portfolio and market reach.
Supply chain in M&A
The ability to manage, integrate, and optimize supply chains has become critical to realize the expected benefits from such M&A deals.
Major forces pushing supply chain strategies to the centre of M&A decision making include:
- Geopolitical fragmentation and regionalization: Global companies are moving away from the traditional ‘justintime supply chain model and shifting towards more regional, ’localforlocal’ models that help them react faster and reduce risks. Hence, companies now look to buy businesses whose regional supply networks strengthen or fit well with their own.
- Regulatory pressures: Import substitution mandates, tariff unpredictability, and regional trade friction have prompted organizations to prioritize domestic hubs. Such measures strategically overcome supply constraints and stabilize cost structures by promoting regional M&A.
- Evolving consumer behavior: Consumer demand for premiumization, personalization, and omnichannel journey requires flexible, responsive networks that traditional global models struggle to support.
- Digital acceleration and data-driven operations: Advanced analytics, artificial intelligence (AI)-based demand sensing, and intelligent control towers have become foundational to forecasting accuracy, inventory optimization, and planning are no longer just optional enhancements.
CPG Deals
Recent M&A examples demonstrate how companies have pivoted toward premium categories, resilience, and long-term strategic coherence.
- Mars – Kellanova acquisition in 2024) created an about ~$36 billion powerhouse with expanded reach, innovation, and enhanced supply-chain scale.
- Kimberly-Clark’s acquisition of Kevenue in 2025 (skin health and beauty segment) is expected to transform Kimberly-Clark’s strategic position by giving it access to iconic health-adjacent brands and creating new synergies across the supply chain.
- When WK Kellogg Co was acquired by Ferrero in 2025, the strategy was to prioritize premium and category-focused growth. The megadeal of 2025-26 integrated cereal, breakfast, and snacking portfolio.
- In beverages, Keurig Dr Pepper’s acquisition of JDE Peet’s, which is currently progressing, aims to create a global coffee leader with a footprint of over 100 markets and a portfolio covering multiple price points, channels and formats.
Consideration in M&A
As part of the M&A strategy, following strategies for supply chain integration must be evaluated.
- Vertical integration has come up as a core strategy. Companies are acquiring local manufacturing businesses to reduce the exposure to global disruptions. It’s not just about capacity building but about building resilience and self-reinforcing supply ecosystem.
- Geographic diversification gives companies additional buffer by anchoring growth in markets where demand patterns, regulations, and economic cycles differ from their core geography. The KDP-JDE Peet’s combination reinforces this, allowing operational risks to be absorbed across a much wider range, as it spans over 100 countries.
- Adopting advanced analytics and proven data models can boost the supply chain ecosystem with targeted acquisitions. For example, Unilever’s acquisition of Paula’s Choice, which is known for its data-rich DTC skincare model and deep consumer analytics. Also, Nuun, a functional hydration brand, was acquired by Nestles’ Health Science, which gave Nestle access to Nuun’s omnichannel hydration platform and high frequency performance data.
- Category resilience is prioritized by companies demonstrating stable, long-term demand regardless of macroeconomic swings. Recent deals in hydration, coffee, and consumer health show how acquirers are leaning towards categories with strong brand loyalty, recurring purchase behavior and steady volume momentum.
From plan to play
Placing supply chain at the centre of M&A execution can integrate operations more seamlessly and accelerate deal value. Here are some critical steps needed to drive efficient pre-deal assessment, integration, and post-merger optimisation of the supply chain.
Before the deal:
- Check the digital maturity of the targeted CPG companies’ supply chain.
- Multi-tier supplier mapping helps identify hidden dependencies or risks in networks.
- Benchmarking key performance indicators (KPIs) of a business such as forecast accuracy, inventory turns and on-time and in-full (OTIF) creates a clear picture of how efficiently the business operates.
During Integration:
- Align planning systems and processes to ensure IT architecture and business functions are integrated seamlessly.
- Ensure logistics networks are streamlined by consolidating carriers and warehousing partners to reduce complexities and costs.
- Set up AI-enabled demand sensing and near-real-time planning to elevate responsiveness
Post-merger optimisation:
- Focus should shift to unlock long-term operational value.
- Identify synergies across procurement and warehousing to combine buying volumes, standardizing suppliers, and consolidate storage footprints.
- Production may be shifted closer to key markets to improve service and reduce transport costs.
- To have a singular view of operations, companies may integrate control towers, to help them make faster, better decisions.
Next moves
M&A is no longer just about expanding market share, it is about mitigating supply chain risk, building local agility and digital capabilities.
For successful M&A in today’s CPG industry, supply chain strategy is no longer a supporting act, it is a primary driver of realizing deal value, integration success, and long-term competitiveness.