On March 25th, 2015 it was announced that Kraft Foods and HJ Heinz would merge, ultimately forming a packaged food power house called the Kraft Heinz Co. This combined company would have a 5.4% value share of the entire US packaged foods market, making it the number one company in the space with nearly US$20 billion in sales. This merger is primarily a response to a changing grocery landscape which prioritizes cost efficiencies, given the emphasis on low prices for the consumer.
Wal-Mart becomes king of grocery retailing
Within grocery retail, Wal-Mart maintains disproportionate power as the nation’s dominant grocery retailer with around 20% market share in 2014. Its second largest competitor, Kroger, only has 8%. Wal-Mart has managed to tighten its grip on the grocery market over the past ten years, growing sales from US$45.3 billion in 2004 to US$156.5 billion in 2014. Wal-Mart was able to increase its grocery sales by 245% thanks to its core strategy: lower prices.