By: Dean Best
Dean Best's views on the industry's hot issues.
More General Mills plants look set to shut as the US food giant wrestles with falling domestic sales. The closures will help profitability but the company will likely have to turn again to M&A to get its top line growing again.
Unilever's move to internally spin off its spreads unit was seen by many company and industry watchers as a pre-cursor to a sale. However, an imminent sale in unlikely, with the business under-pressure and a paucity of suitors standing buy.
Tough trading conditions in the UK can make it difficult for food companies to find the time and resources to build a presence overseas. However, Dean Best argues it is that market landscape that makes it imperative more companies look to exports for growth.
The private-equity owners of Hostess Brands are, according to reports, mulling a sale, just a year after buying the US snacks business. There is speculation Apollo Global Management and C. Dean Metropoulos are planning for to sell Hostess early next year. However, that looks unlikely.
Shares in Dairy Crest shot up today (6 November) after the UK dairy group announced a deal to sell its most problematic and under-pressure division - liquid milk. However, it may just be the City was not just reacting to the exit (dependent of course on competition officials approving the transaction) of Dairy Crest from a sector struggling to make money but the fact there could be takeover interest in the leaner company.
Yildiz Holding today (3 November) announced it had won the race to buy UK-based biscuit maker United Biscuits. In doing so, the privately-owned Turkish food group has moved once more to buy a major Western food brand.
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.
- Premier Foods CEO expects UK supermarket rebound
- Why Post is increasing its exposure to cereal
- Briefing: The risks and rewards of e-tail in China
- Unilever must "speed" response to consumer trends
- just-food's pick: Natural Products Expo top 10
- Post Holdings strikes deal to acquire MOM Brands
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- Crisp maker Sibell acquires Spain's Celigueta
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- Greencore expands UK, US sales
- 10 Key Trends in Food, Health and Nutrition 2015
- The Sugar Backlash and its Effects on Global Consumer Markets
- Unilever - Strategy and SWOT Report
- The Future of Retailing in the UK to 2017
- Global Consumer Trend Framework: Understanding Attitudes and Behaviors that Influence Global Consumption Habits