Having had its advances rejected outright by Unilever, Kraft Heinz will no doubt be looking around for another, more willing suitor.

Perhaps this time it might cast its eye closer to home, where a mega-merger between two American companies won't attract the same level of political opposition it did with Anglo/Dutch Unilever.

The US foods giant, home to Heinz ketchup, Philadelphia cream cheese and Kraft macaroni & cheese, is backed by private equity firm 3G and by billionaire investor Warren Buffett.

3G's investment strategy is to acquire companies and then aggressively cut costs by, for instance, firing staff and shuttering factories. This boosts margins, which, in turn, improves profits. The private equity group has had big success at Kraft Heinz, where it last year managed to increase operating margins from 17 per cent to 23 per cent - huge by any standard. Rival General Mills' margins, for instance, hover around 15 per cent, while Kellog's come it at around 12 per cent to 14 per cent.

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The challenge of the model, however, is that it it tends to kill the sales growth and acquisitions are needed to sustain the strategy.

Accordingly, 3G is looking for companies which not only diversify Kraft Heinz's product range and geographical reach, but, perhaps more importantly, where product categories actually overlap. That's because these sorts of overlaps afford huge scope to rationalise operations in the way the 3G likes to by, for instance, moving soup production to one factory, rather than three.

Kraft Heinz is backed by private equity firm 3G. Photo / AP
Kraft Heinz is backed by private equity firm 3G. Photo / AP

There's been a huge amount of consolidation in the food industry over the past four years, thanks in no small part to 3G's involvement in the sector through Kraft Heinz. Not only has the company raised the bar in terms of profitability, with some of the highest margins in the industry, but its peers, aware of the need to defend themselves against takeover, have sought to expand their own operations.

So where might Kraft Heinz now be casting its net? Here are some likely candidates.

Mondelez

Market cap: US$62.5b

Big in: chocolate and confectionery

Brands: Cadbury's, Marabou, Oreo cookies, Trident chewing gum

There has been speculation for quite some time that Kraft Heinz might re-acquire its old pal Mondelez, a business Kraft spun out back in 2012 after acquiring Cadbury but before being snapped up by Heinz. It would, among other benefits, give Kraft Heinz full control of the Philadelphia cream cheese brand, which Mondelez controls outside of North America.

Their portfolios would be complementary, but perhaps a little too much so: it might not afford the type of cost saving opportunities 3G is looking for. The flipside is that Mondelez is far less reliant on North America than Kraft Heinz, with 22 per cent of sales generated on the continent compared with 72 per cent for Kraft Heinz.

Kellogg's

Market cap: US$25.1b

Big in: cereals and snacks

Brands: Pringles, Special K, Rice Krispies and All Bran

Buying Kellog's would give Kraft Heinz more exposure to categories such as breakfast cereals and snacks. Geographically, Kellog's has a bigger footprint outside of the US. "There is quite a significant argument for Kellog's" says Raphael Moreau, an analyst at Euromonitor. Kellog's generates 62.1 per cent of its annual sales in North America.

Buying Kellog's would give Kraft Heinz more exposure to categories such as breakfast cereals and snacks. Photo / AP
Buying Kellog's would give Kraft Heinz more exposure to categories such as breakfast cereals and snacks. Photo / AP

Campbell's

Market cap: US$17.7b

Big in: soups, cookies, crackers, salsa, baby foods, sauces, snacks

Brands: Campbell's soup, Pepperidge Farm, V8

North America is Campbell Soup's heartland, where it makes 80.7 per cent of its total sales. The rationale behind acquiring this company would be to move into newer product categories, such as biscuits, but also to reap the potential cost savings opportunities between Campbell's and Kraft Heinz, of which there would be many.

General Mills

Market cap: US$33.46b

Big in: Cereals, ready-meals, flour, bagged vegetables, baking, snacks

Brands: Cheerios, Jus-Rol pastry, Cocoa Puffs, Cascadian Farm, Green Giant

The second-biggest potential target in the group, General Mills would give Kraft Heinz entry into the yoghurt market, with the global rights to Yoplait and a much greater presence in Europe. GM and Kraft Heinz both make nearly 72 per cent of their sales in North America, but GM is much bigger in organic and healthy foods, a fast-growing sub-sector.

Unilever's food brands

After being burned so badly the first time around, Kraft Heinz will not go back to the table to try to secure another offer for Unilever. One option, however, could be that it might offer to buy some of Unilever's food brands, such as Hellmann's mayonnaise or PG tips tea or its spreads business.

"The investment community would generally like Unilever to sell spreads because they think it's diluting growth rates," one analyst said.

"However, the Unilever counter-argument is that spreads generate a lot of cashflow. Unilever's spread business is six times the size of the next big global player in spreads so it's difficult to find someone in the industry with the firepower to buy it."

Moreover, the rationale behind Kraft Heinz's approach to Unilever has been questioned by many in the City, who can't understand why the US foods giant would want to step into the world of personal and home care, which is arguably Unilever's biggest strength.

"There wasn't an awful lot of overlap where they would have been able to take out costs," says one analyst.