The private equity sector could focus on deals in the $3 billion to $5 billion range.
"I think it will continue to be an extremely active year in M&A," said Greg Pearlman, managing director and head of the U.S. food and consumer group for BMO Capital Markets (BMO.TO).
Industry executives cited companies ranging from Monster energy drink maker Hansen Natural Corp (HANS.O) to Molson Coors Brewing Co (TAP.N) and grocery store chains as prime takeover targets.
"It's not about making a big acquisition, but you'll see some smart acquisitions starting to happen over the next six to 12 months," said Kantar Retail Americas Chief Executive Ken Harris.
So far this year, the consumer staples sector represented 11.5 percent of all U.S.-related M&A, up from 0.9 percent in the same period a year ago, according to Thomson Reuters data.
It marked the fourth most active sector for M&A this year.
The value of deals grew exponentially to total $29.1 billion, up from $1.4 billion a year ago.
"We think the market can get a $5 billion levered buyout," Pearlman said. "On the corporate side, I don't think there is a size limit."
START WITH STAPLES
This year's totals were buoyed by deals such as Kraft's four-month battle to acquire Cadbury and Coca-Cola Co's (KO.N) move to take over the North American operations of its top bottler, Coca-Cola Enterprises Inc (CCE.N), for $13.4 billion.
Pearlman sees deals in the area of consumer staples, such as food and grocery stores, rather than in areas of discretionary spending.
"Everyone has got to eat, so that's where we start," he said. "The more discretionary we get, the harder it is to project and harder to get someone to open their wallet and the harder it is to get the financing you need."
Last month, CKE Restaurants Inc (CKR.N), owner of the Hardee's and Carl's Jr. hamburger chains, agreed to be bought by Thomas H. Lee Partners THL.UL for $619 million but it has until April 6 to look for a better offer.
Robert Goldin, executive vice president of consulting firm Technomic, said another private equity firm could make a stab at CKE, but he doubts a rival restaurant chain would emerge since adding multiple chains has rarely been successful.
"CKE has done an OK job and I think it's kind of hard for them to do better," Goldin said.
BEVERAGE MAKERS LOOK FOR INNOVATION
Hansen Natural could be the next hot takeover target in the drinks space.
"It's an obvious takeover target. The category is growing, it's a cash generative business that is showing some traction internationally," said Stifel Nicolaus beverage analyst Mark Swartzberg.
Dr Pepper Snapple Group (DPS.N) Chief Executive Larry Young said the soda and juice company looked at Hansen Natural, but decided against buying it because it wanted to focus on its core brands.
Innovation is a key motivator for other players.
"That's where all the excitement is to me in the beverage area -- juice, teas, alternative beverages. Having a new product pipeline is really critical," Pearlman said. "Energy drink space is of critical importance."
Diageo (DGE.L) (DEO.N), the world's biggest spirits group, said it is constantly looking at acquisition opportunities.
"We're certainly not assuming all great ideas come from within," said Ivan Menezes, head of Diageo's North American region.
One takeover target in the beer space could be Molson Coors Brewing Co (TAP.N), which would fit well with SABMiller Plc (SAB.L), Swartzberg said.
"They're a great takeout candidate," said Swartzberg. "It's a question of when and whether the Molson and Coors families decide to sell."
Molson Coors said it was aware that the threat of a takeover was always present, but sees itself as a net buyer of brands in the near future.
Molson Coors Chief Executive Peter Swinburn said "we never, ever think we are protected in any way" from the threat of a potential takeover. "It's down to the performance of the business ... you are subject to somebody being able to afford a premium to go for you."