Innovation, innovation, innovation, says General Mills
2nd July 2009 11:53

It's obvious: when you've got a good story to tell, you want to go to great lengths to shout about it.

General Mills, the US food giant behind brands like Old El Paso and Haagen-Dazs, certainly followed that maxim yesterday (1 July) when it outlined its annual results.

Its conference with analysts, broadcast over the Internet, was lengthy, even by the standards of most results presentations.

Indeed, the plug had to be pulled on the Internet broadcast when the conference broke the 90-minute mark - even though the General Mills management was still ploughing through questions.

Aside from record US retail sales and a robust performance from its international business (notwithstanding the whack the General Mills' overseas figures took from the strong dollar), the company was keen to demonstrate that, even in recession, innovation remains key to its future.

While some industry watchers have questioned the merits of launching products in a recession, General Mills boss Ken Powell insisted it was a "great time to launch new products".

However, when one eagle-eyed analyst (dontcha just love them) pointed out that the number of new products set to be launched by General Mills in the next six months was actually down on the first half of its previous fiscal year, it cast some doubt on the company's boldness.

Nevertheless, Ian Friendly, the COO of General Mills' US retail division, had a response ready. The company, he said, wants "bigger and better ideas as opposed to large numbers of ideas".

Innovation is always a gamble. But, General Mills's shares closed up almost 4% yesterday. Investors must like the sound of Progresso High Fiber soups, Yoplait Delights parfait and frozen entrees under the Chinese cuisine brand Wanchai Ferry.

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Continental consolidation
29th June 2009 16:13

After months of speculation, news reached us on Friday (26 June) that struggling UK prepared meals company Uniq has entered into a binding agreement over the sale of its French business, Marie, to LDC.

Following regulatory and shareholder approval, LDC would acquire 100% of Marie in a deal worth EUR60m (US$84.5m). The French poultry group would also assume responsibility for Marie's net debt of EUR13m.

According to Investec analyst Nicola Mallard, the deal offers Uniq "a solid price" as "trading has not been easy in the French market". Indeed, in the first quarter Marie announced a 7.6% sales decline.

Uniq told just-food that proceeds from the sale would be used to pay down debt and address a pension deficit. The remainder would then be reinvested in Uniq’s other businesses.

While the market broadly expects Uniq to announce a further sale of its remaining continental interests, a spokesperson for the company insisted that a decision is yet to be made on the way forward for its units in northern Europe. According to Uniq, the possibility of further investment and the establishment of a joint venture still on the cards.

The agreement also sees LDC consolidate its position on the highly fragmented French ready meals market. Phillip Galin, MD of fresh meals at LDC, said that the acquisition would provide the company with a crucial foothold in the branded prepared foods sector.

“Five years ago we said we aimed to develop chilled brands but we didn't have a great brand. With Marie, it is for us a way to have such a position on the French market and develop categories of products," he told just-food.

Meanwhile, further consolidation in the French food sector could also be in the offing, with rumours abound that embattled dairy group Entremont Alliance has attracted the acquisitive eye of Lactalis, among others.

France’s food sector is made up of a patchwork of smaller players. As the current trading environment places increasing pressure on weaker companies, it seems we could well be in for a swathe of M&A news from across the channel in the months to come.

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Branding and being green
19th June 2009 16:10

Brands can be bold and brands can be brash, so to have the Museum of Brands housed in a small mews in London's Notting Hill district seemed a slightly incogruous setting.

Nevertheless, Kellogg's UK arm chose the museum to host its annual business update and, amid trading conditions that have seen the rise of private label (even in relatively resilient categories like cereal), a building that celebrated the history of brands seemed fitting.

One Kellogg official told just-food the move was "a statement of intent". To sit in on a briefing in a room surrounded by Kellogg's packaging and brand campaigns past and present was certainly that.

The Kellogg's brand remains central to the group's strategy of riding out the downturn. Innovation and value are two weapons at Kellogg's disposal and the company outlined a number of examples where it said it was managing to grow despite the bleak economic landscape.

Notably, however, and perhaps as befits a brand and a business that has lasted over a century, the company was keen to demonstrate that it is looking forward.

Kellogg UK managing director Greg Peterson set down the cereal giant's moves to mitigate its impact on the environment. Their commitments on waste to landfill, carbon dioxide emissions and water usage are mirrored by many in the industry but there was no doubting Peterson's determination that Kellogg meets its targets.

It's clear that there is a business imperative to such moves, even in recession. The old trade-off between economy and environment no longer applies (witness the performance of the UK's Green Party during the recent EU elections) and consumer concerns over the environment are sticking.

"Consumers still care about it even in the midst of recession," Peterson said.

Still, as we have shown on our pages this week, companies need to tread carefully when they look to convince consumers of their commitment to the environment.

One false move could threaten that well-crafted and lucrative brand image.

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Sainsbury's swaps nostalgia for looking forward
18th June 2009 9:42

A recent ad campaign from UK grocer Sainsbury's was loaded with nostalgia, celebrating the company's 140th birthday.

Yesterday (17 June), however, Sainsbury's chief executive Justin King opted to look forward rather than look back with the unveiling of ambitious expansion plans for the country's third-largest food retailer.

Riding the back of the City's recognition of Sainsbury's recent strong performance, King asked investors to provide GBP445m (US$725.4m) for the grocer's expansion.

By the end of the day, Sainsbury's hailed a "successful" share and bond issue, the funds from which it plans to use to grow its floor space by 15% - or 2.5m sq ft - by March 2011.

Sainsbury's shares may have tumbled on news of the fund-raising but that was an expected short-term reaction; in the long term, investors should be upbeat about the retailer's prospects.

The company's sales growth remains far ahead of Tesco and only slightly behind the levels being achieved at Asda and Morrisons - two more value-driven rivals.

Sainsbury's is planning an assault on the UK's fast-growing convenience channel. Last week, convenience director Dido Harding told the British Retail Consortium's annual conference that Sainsbury's is opening one c-store a week and aims to increase that rate to two outlets a week next year.

Nonetheless, King naturally knows that a lot of hard work remains, despite Sainsbury's obvious recovery.

He told analysts yesterday that Sainsbury's needs to "work harder" to convince UK consumers that it can offer value on branded products, as well as its fast-growing, own-label Basics range.

However, the way the business has performed in the five years since King took the reins means you would not bet against the Sainsbury's boss cracking that nut, too.

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Cadbury plays Cupid in Brazil
17th June 2009 10:31

In London, the subway (locally known, of course, as the Tube) is hardly the place where you would expect to meet the love of your life.

Despite the best efforts of London Mayor Boris Johnson, the Tube is still renowned for being a place for late-night revellers to rest after a night out - and, despite the drinking ban, there remain scores of sightings of surreptitious slurps from clandestine cans of Stella.

However, as with many aspects of life, things are different in Brazil.

This weekend, confectionery giant Cadbury is launching the next stage of its campaign for new gum Trident Fresh. This next stage involves the roulette wheel of romance that is speed dating - and the UK group is using the subway of one of Brazil's largest cities to host the event.

"On Saturday night, 24 men and 24 women will meet on a Porto Alegre subway station to 'date' inside a train," a Cadbury Brasil spokesperson tells us. 

"Women will be seated, and men will circulate, changing wagon every time the train stops. The objective is that people know each other promoting "speed datings" with no more than 3 minutes. About 576 'datings' will happen."

The Cadbury Brasil spokesperson said the idea for the speed dating came from one of the ads the company is using to plug Trident Fresh in the new campaign.

It's worth wondering, however, if those that take part in the speed dating will be as glamorous as the actors in the ad.

But, still, this is Brazil we're talking about. Not Brixton.

Back in London, however, Cadbury has been further demonstrating its willingness to push the boundaries of its ads campaigns.

The company is currently running a campaign for its Cadbury Creme Egg Twisted bar and is once again harnessing the power of the public for impact.

The campaign revolves around the premise that Cadbury's Twisted bars are loose in the UK and will attempt to "goo" 16 high profile targets.

Members of the public have been asked to sign up as secret agents of the Cadbury Intelligence Agency (CIA, if you hadn't worked it out) and identify the targets.

In the hope of winning a cash prize, entrants have been filming their chase across the country and posting their efforts on youtube.

As you can imagine the entries have ranged from the peculiar to the outright surreal.

Here is just one.

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