As Food Prices Soar, New Report Details Vast Grocery Industry Consolidation Crisis

Food & Water Watch surveyed 55 grocery categories, finding that just eight are highly competitive markets

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Food System

Washington, D.C. – With food prices soaring, the consumer advocacy group Food & Water Watch released a new report detailing the deepening consolidation crisis present in the country’s grocery industry, and what it means for consumers.

In the report — “The Economic Cost of Food Monopolies: The Grocery Cartels” — Food & Water Watch examined the market share of the dominant companies across 55 grocery categories, representing a variety of common products, from fresh vegetable side dishes, milk and milk alternatives to convenience meals. The research calculated the ratio of sales of the top four (or fewer) companies in each food category, compared to those of all other companies. 

The research finds that more than 60 percent of the analyzed grocery categories are tight oligopolies/monopolies. Just eight of the 55 categories (15 percent) could be considered highly competitive. 

This concentrated marketplace is dominated by several giants across categories. Kraft-Heinz is among the top four companies in 12 categories (22 percent of the total). It is the lead company in five of those categories (including dry macaroni & cheese mixes and table sauces).General Mills and Conagra are among the top four companies in 9 out of the 55 categories we surveyed. Conagra has monopolies in more than one category, including single-serve prepared pasta dishes (64 percent of sales) and single-serve prepared Sloppy Joe sauce (92 percent of sales). Campbell Soup Company is in the top 4 in seven of the categories, and PepsiCo and Del Monte are both in six.

The consolidation is especially acute within specific food categories: 

  • Yogurt: While this category could fill an entire supermarket showcase, just four companies make up three-quarters of all yogurt sales. These include Danone (maker of Activia and Oikos), General Mills (Yoplait and Mountain High) and Groupe Lactalis (Stonyfield Organic and siggi’s).
  • Baby formula: Just three companies capture 85 percent of all liquid formula sales and around 95 percent of powdered formula, enabling these companies to engage in anticompetitive behaviors such as price fixing.
  • Dip sales: PepsiCo alone captures 88 percent of all dip sales in the United States, largely through brands that do not carry its name (like Fritos, Lay’s and Tostitos).
  • Soy milk: Danone dominates the refrigerated soy milk market with its Silk brand, accounting for 80 percent of all sales. The next leading brand takes in just over 1 percent.

The research also shows an alarming trend towards fewer, bigger stores. From 1993 to 2019, the number of grocery stores nationwide declined by roughly 30 percent, as the combined market share of the four largest grocery retailers tripled to 69 percent. 

The acutely consolidated market funnels wealth into the hands of corporate shareholders and executives, at the direct expense of small businesses, local economies and consumer choice. 

At the store, consumers are faced with rising food prices — as much as a 26 percent increase since January for a family of four on a “thrifty food plan”.

“Over the past century, food giants have been quietly consolidating their power, stripping out the resilience baked into more diversified, regional food systems, and cutting local economies out of the picture. The grocery cartel has created an illusion of choice and efficiency to disguise their profiteering off of the American consumer who is unwillingly asked to trade abundance for resilience,” said Food & Water Watch Research Director Amanda Starbuck. 

She continued: “We envision a U.S. food system more resilient, just and sustainable than the one we have today. To get there, we need to address the rampant food monopoly consolidation crisis on our hands. President Biden must reinstate the Grain Inspection, Packers and Stockyards Act to enforce antitrust laws, break up monopolies, and invest in the grocery cooperatives, regional food hubs and local food processors that can rebuild our food system from the ground up.”

In recent months, the Biden administration has taken some first steps to address agricultural industry consolidation — but much more action is necessary. From strengthening and enforcing antitrust law, to providing public incentives to help regional food hubs take root, the report offers a clear-eyed description of the crisis we face and outlines the federal action needed to address the problem.

Contact: Seth Gladstone – [email protected]