Cereal makers' and other packaged food shares are on the rise Thursday morning as investors continue to wager that consolidation will occur as the world's eating habits change and the industry's fragmentation into more specialty niches changes the nature of economies of scale.

Kellogg shares added 2% or $1.38 to trade at $70.32 in late morning trade.

The shares are reacting to both the company's first-quarter earnings report, as well as news about rivals General Mills and Mondelez.

Kellogg(K) - Get Report on Thursday said that its eported first-quarter profit hit $262.0 million, or 74 cents per share, up from $175.0 million, 49 cents per share, for the same period last year. It said its adjusted EPS, the number analysts base their estimates upon, was $1.06, beating the 99-cent FactSet consensus.

The company missed revenue expectations though, posting a $3.26 billion top line, down from $3.40 billion last year, and below the $3.28 billion FactSet consensus. The company said U.S. Morning Foods, which includes breakfast cereals, U.S. Snacks, and Europe got off to a slow start. Kellogg reaffirmed 2017 guidance. It expects EPS growth of 8% to 10%, year-over-year on a currency-neutral basis. Kellogg's shares are up 0.7% in Thursday premarket trading, and down 10.5% for the past year. The S&P 500 index SPX, -0.04% is up 16.4% for the last 12 months.

The com[pany reaffirmed its earnings outlook for 2017, that calls for EPS growth of 8% to 10%, year-over-year.cy-neutral basis.

Shares of food giant, Kellogg rival, and Cheerios cereal maker General Mills(GIS) - Get Report rose almost 7% on Thursday after the company said its longtime CEO Ken Powell would leave the company, a move that has Wall Street wondering is a long-expected change of strategy, including a possibility of a takeover may be in the offing.

Powell will remain Chairman for a transition period until his retirement, probably within the year.

General Mills shares traded at $59.86 Thursday morning, up $3.8%.

Elsewhere in the food sector Kraft Heinz (HNZ)  on Thursday reported first-quarter earnings of 84 cents a share on net sales of $6.36 billion, a 3.1 percent decline from a year ago. Analysts expected earnings of 86 cents a share and net sales of $6.46 billion. Organic sales were down 2.7 percent for the quarter, compared with analysts' consensus estimates for a 0.6 percent decrease. Operating profit fell 3.4 percent to $1.89 billion, sharply below the consensus estimate for a 1 percent increase.

Its shares rose 0.6% on Thursday, to $89.70.

The company's last quarter was "miserable," TheStreet's Jim Cramer, manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment.

A few months after Kraft Heinz's failed attempt to buy Unilever(UL) - Get Report , the Pittsburgh- and Chicago-based company is also conceding that its reputation for ruthless cost-cutting may be scaring off potential targets.

Bernstein's Alexia Howard pressed management about this very issue, Cramer noted. "It was a stark moment on a very grim conference call," he said.

"We need to separate what's perception and what are facts," Kraft Heinz CEO Bernardo Hees told analysts on a conference call, identifying "ownership, meritocracy, high performance and dreaming big" as the company's five core values. "And I truly believe those five things are applicable in many companies and many segments and so on. So through this culture we have, I don't think it will be more difficult or easier to do any other transaction."