By Evie Liu
Investor pressure is mounting across the packaged-food and restaurant industries, with sluggish sales growth and shifting consumer habits drawing activists looking to unlock value.
The latest example is Lamb Weston, the frozen-potato supplier behind french fries served at chains like McDonald's and Chick-fil-A. Activist hedge fund Starboard Value has built a sizable stake in the Idaho-based company and is urging faster cost cuts and operational improvements to revive the stock, The Wall Street Journal reported on Monday.
The push comes after Lamb Weston's shares tumbled 12% over the past year, weighed down by slowing restaurant demand and lower margins due to price cuts. Investors are also concerned that the company has expanded production capacity too aggressively as consumers are pulling back.
Starboard joins another activist, Jana Partners, which already reached a settlement with Lamb Weston last year to add representatives to its board and push for operational changes. But Starboard believes progress should come faster, The Wall Street Journal reported.
Food manufacturers and restaurant chains -- long viewed as stable defensive businesses -- have become fertile ground for activists as growth stalls and consumers push back against years of price increases while increasingly seeking healthier alternatives.
Last year, Elliott Investment Management built a $4 billion stake in PepsiCo, pushing for cost reductions, divestitures, and sharper strategy. PepsiCo said it plans to reduce roughly 20% of its U.S. product offerings as part of a cost-cutting agreement with the investor.
J.M. Smucker, the maker of Folgers coffee and Uncrustables sandwiches, recently agreed to appoint two new directors as part of a settlement with Elliott following pressure for operational changes. It is not disclosed how much stake Elliott has in the company.
Keurig Dr Pepper also faced activist scrutiny after announcing an $18 billion acquisition of JDE Peet's, which had investors worried about its debt load. The deal announcement sent share prices down sharply. Starboard soon built a stake and began pushing management for changes.
In the restaurant sector, Jack in the Box has been locked in a contentious battle with Sardar Biglari, whose investment firm built a 9.9% stake in the fast-food chain and pushed for leadership changes after years of declining sales and shareholder returns.
Biglari launched a proxy campaign aimed at replacing longtime Chairman David Goebel and reshaping the board. At the 2026 annual meeting, shareholders re-elected the full slate of directors, though the company later replaced the chairman under investor pressure.
Meanwhile, Nelson Peltz, the activist investor who owns about 16% of Wendy's outstanding shares, said shares in the fast-food chain are undervalued and his firm may explore ways to enhance shareholder returns, including potential leadership adjustments or transactions such as a merger or sale.
The wave of activism underscores how challenging the environment has become for food companies. But the challenges have also created an opening for investors to push for cost cuts, portfolio pruning, or even corporate breakups to unlock value.
For activists, the sector offers a compelling setup: Many companies still control globally recognized brands and large distribution networks, yet their stocks have lagged behind the broader market as growth slows and margins come under pressure.
If restaurant traffic remains soft and packaged-food volumes fail to rebound, activists may increasingly target companies they see as slow to adapt -- even the most familiar names in the grocery aisle or drive-through lane.
Write to Evie Liu at evie.liu@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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March 09, 2026 13:57 ET (17:57 GMT)
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