By: Dean Best
Dean Best's views on the industry's hot issues.
The imminent sale of Chiquita Brands International, the US produce giant, shows how different investment horizons can manifest on a company's share roster - and decide a business's future.
Chiquita Brands International still appears set on its proposed merger with Fyffes – and the US produce giant is, at the moment, right to do so.
Emmi's move to sell Italian yoghurt business Trentinalatte, announced this morning (6 October), was the latest example of the challenges facing companies doing business in the country's dairy sector.
Tesco's dealings with suppliers appear to be at the centre of the latest problem to emerge at the UK's largest retailer. And it is an issue that has left many industry watchers left shaking their heads in bewilderment today (22 September).
General Mills' move for Annie's has further fuelled the belief US natural and organic food companies, including Hain Celestial and WhiteWave Foods, could become takeover targets for mainstream groups searching for growth. But the price General Mills has agreed to pay for Annie's also underlines such deals would likely be expensive.
Looking at Danone's share price yesterday, one is left with the impression there is an expectation of changes at the French food group now Frank Riboud is to step down as CEO. However, those expecting wholesale change at Danone should perhaps not be so hasty. The executive moves at the top of the yoghurt maker suggest Riboud will still be central to the company's overall strategy.
Size matters, right? Scale - and the economic benefits that come with it - provide a business with clout smaller competitors find hard to battle. However, could large food companies be losing some of the advantage gained from their size?
Strategically, Dairy Crest's deals with fellow UK dairy group Fayrefield Foods and New Zealand dairy giant Fonterra to serve the global infant formula market are astute moves. But the deals could also catch the eye of some of the world's larger dairy processors about Dairy Crest's new capabilities.
Cynics will scoff a company the size of Nestle can easily afford to become a "Living Wage" employer in the UK. And perhaps there would be an element of truth in that. But the fact the world's largest food maker is willing to invest in its staff should be applauded - and the hope is some of its closest competitors - companies with vast resources of their own - will follow.
After three profit warnings in a year, it is little wonder the performance of US food giant ConAgra Foods is under scrutiny.
The City has welcomed Premier Foods' moves to spin off parts of its businesses into joint ventures but it is still the performance of the UK group's core brands that moves its shares - and that concerns investors.
With the bidding war for Hillshire Brands intensifying, it is pertinent to point out just how correct Sara Lee's management - and those on Wall Street that supported the split - were about the shareholder benefits of separating the old business.
For the more patriotic sections of Australia's food industry, there is likely to be some dismay at the prospect of another local food company falling into overseas ownership. But the proposed sale of Goodman Fielder, one of the country's largest food manufacturers, looks to be the right move for its shareholders - and for the business as a whole.
After seeing the boom in yoghurt sales in the US chip away at demand for breakfast cereal, Kellogg has accepted it needs a piece of the action. And about time, too, writes Dean Best.
In the US, a market where volume sales have been and remain under pressure, it has been expected in certain quarters that boardrooms would increasingly run the rule over potential acquisitions. Hillshire Brands executives have moved again - this time with a major deal for Pinnacle Foods.
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