By: Dean Best
Dean Best's views on the industry's hot issues.
There will be more requests on retailers to move on price. Not every supplier will be successful. And for those that are not, it may serve as a push to, ultimately, look for scale or for a buyer. Another round of consolidation in the sector is likely.
Mars has moved to take full control of Wrigley, buying the minority stake held in the chewing gum maker by Warren Buffett. The deal could create a stronger competitor, particularly in the US, but there are some more strategic questions for Mars to answer, while the transaction can only add to Buffett's firepower should he wish to make more acquisitions in the food industry, writes Dean Best.
There is hope the embattled UK turkey processor can be revitalised under the stewardship of Ranjit Singh Boparan, the UK businessman with extensive interests in poultry. However, there are questions about what will happen to the pensions of Bernard Matthews' staff, while the company's commercial performance is in need of improvement.
Shares in Hain Celestial nose-dived yesterday (16 August) as Wall Street responded to a surprise announcement on Monday late afternoon US time from the Earth's Best baby food maker - and it was an announcement that capped an unsettling year for the business.
Kellogg has this week made its first acquisition in the US for over four years, snapping up fledgling snack bar maker Pure Organic. The deal is similar to those made by a number of Kellogg's US packaged food peers in recent months as some of the big names in the industry try to adapt to changing consumer trends in the country. Dean Best reflects on the move.
Just a week after dropping its interest in Premier Foods, McCormick & Co. announced the acquisition of Australian chilled herbs firm Botanical Food Co. When the US herbs and spices giant's interest in Premier emerged, McCormick said it had a "pipeline" of targets and industry watchers expect the company to continue to look to M&A for growth.
Irwin Simon, the founder, president and CEO of Hain Celestial, often comes across as one of the more forthright chief executives in the US food industry, with a firm belief in his company and its prospects. With Hain Celestial's domestic business facing challenges and investor scrutiny intensifying, Simon this week set out how the company will improve its performance in the US and why he believes the group can thrive amid increasing competition - but there were signs he acknowledges the need to adapt to meet the challenge.
A striking transaction has been announced in the private-equity world, with US buy-out house Catterton to join forces with the investment arm of luxury goods group LVMH - and right along the consumer-facing parts of the food sector companies will be watching closely.
Just three years after PepsiCo and Muller launched their bid to capture part of the US yoghurt market, the companies have thrown in the towel. Dean Best believes the companies did not create distinct enough products to succeed in a competitive category.
The starting gun on the race for Quorn Foods is to be fired this week and interest in the UK meat-free business is likely to be high.
Two significant announcements this week - from dairy giant Fonterra and from infant formula group Mead Johnson - further underlined how the impact of China's recent economic slowdown is affecting companies in our sector.
UK grocer Waitrose has got industry watchers talking this afternoon (17 June) with the launch of a promotional programme that lets consumers choose which products they want to buy on offer. Rivals and suppliers will be watching very closely.
Campbell Soup Co. has again moved to inject growth into its business through M&A, snapping up US salsa-to-houmous maker Garden Fresh Gourmet. And the odds are more deals in categories like fresh food and snacks will follow.
Campbell Soup Co.'s third-quarter results included some positive news. Sales from the US group's baking and snacking arm grew solidly, while the company's profitability beat analyst expectations amid productivity savings and a pull back on promotional spending. However, Campbell's top line remains under pressure and it may have to turn to other measures to get sales growing.
In some ways, Jonathan Hart will leave the UK chocolate maker and retailer Thorntons next month in a better position than he found the business when he joined in January 2011. However, when Hart steps down on 27 June, a decision announced yesterday (18 May), Thorntons should be looking for - or be set to install - a new chief executive with more experience in FMCG and in selling branded products to UK and international grocers.
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