By: Dean Best
Dean Best's views on the industry's hot issues.
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.
California is, in its own words, "facing one of the most severe droughts on record" and food and beverage companies are under scrutiny. The situation has served to bring a serious issue facing the industry to wider attention - and that may spark more companies into action in an area where environmental advocates say its record is mixed.
There were some cautiously positive noises coming out of Kellogg yesterday (5 May) as the US food group announced its first-quarter results - but a number of questions still hang over the Special K and Pringles maker.
PepsiCo yesterday (22 April) reported a set of solid underlying first-quarter results. But it was away from the numbers that the US food and drinks giant stirred more interest, with Indra Nooyi's comments on the need to adapt to the changing ways consumers define health attracting attention.
Today was a positive day for Unilever in some ways. The FMCG giant's first-quarter sales beat expectations and its shares rose steadily in London. Broadly, however, it is too soon to say whether Unilever can enjoy sustained growth from its food business.
The US food industry is going through a period of significant change and the major names have struggled to come up with the answers to meet new consumer habits. There have already been signs some are turning to M&A - think of the sales of Bolthouse, of Annie's and even Krave jerky last month - and the Kraft/Heinz mega-merger suggests deal-making could accelerate.
At the Consumer Analyst Group of Europe conference in London, Danone's recently-appointed CEO Emmanuel Faber gave a presentation to the investors and analysts in the audience that gave a sense of seriousness, of realism at the French food giant.
It was a bumper week of 2014 financial results, particularly from the US, but a flurry of announcements - including some surprise admissions - from across the pond on Thursday perhaps best served to underline the challenges facing mainstream food manufacturers in the country.
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.
- Premier Foods to push on with range revamp
- Focus: Why Dairy Crest needs to offload dairies
- Sweets & Snacks Expo: just-food's pick
- UK Responsibility Deal must solve credibility gap
- Why FMCG background key for next Thorntons CEO
- Dairy Crest earnings fall
- JBS "seeking M&A" in Americas, Australia
- General Mills launches Greek yoghurt in Australia
- Cadbury to cut Australian jobs
- Arla expands in Egypt with Juhayna JV