The food and beverage sector is facing a dramatic day after candy giant Mars signed a $35.9 billion deal with snack maker Kellanova (NYSE:K). The merger will combine the company behind M&M’s, Snickers and Skittles with the manufacturer from Pringles, Cheez-It and Pop-Tarts. Kellanova (K) was created from the grain-specialized group WK Kellogg (KLG) last year and has posted a string of strong gains since then. The question for investors now is: what other food or beverage stocks are ready for a takeover proposal?

Also in play was the release of the latest inflation data on Wednesday morning. The consumer price index for July pointed to a 3.2% year-on-year increase in the core rate, compared to the +3.2% pace expected by economists and the +3.3% level recorded in July.

The closely watched food category posted a 2.2% increase in July from a year ago, with prices for food away from home increasing 4.1% in July and food at home increasing just 1.1%. The inflation rate for food at home has now been below the Federal Reserve’s overall target of 2% for nine months in a row, although the overall level of food prices is still higher than it was two or three years ago.

Categories where inflation significantly eased or declined year-over-year included rice (-3.7% y/y), ham (-1.9%), milk (+1.2%), cheese (-2.3%), apples (-12.0%), poultry (+0.9%), cold cuts (-0.3%) and coffee (-0.4%). Lower transportation and shipping costs in the U.S. were a factor in easing inflation in certain food groups. Consumer resistance to prices and package sizes also impacted demand for certain foods. Categories whose prices remain above the core inflation rate included butter (+6.1%), pork chops (+7.3%) and baby formula/milk (+4.6%).

Food and Drink Watch: Kroger (KR), Albertsons (ACI), Kraft Heinz (KHC), General Mills (NYSE: GIS), Kellanova (K), (MKC), Hormel (HRL), (CAG), Campbell Soup (CPB), JM Smucker (SJM), Pilgrim’s Pride (PPC), Lamb Weston (LW), ingredion (INGR), BellRing Brands (BRBR), BRF (BRFS), Post Holdings (POST), Lancaster Colony (LANC), Flower Foods (FLO), J&J Snack Foods (JJSF), Simply Good Foods (SMPL), Coca-Cola (KO), PepsiCo (PEP), Keurig Dr Pepper (KDP), Monster Beverage (MNST), Celsius Holdings (CELH), Anheuser-Busch InBev (BUD) and Molson Coors (TAP).