Michelle Russell
The food business blog from Michelle Russell
If you would like to offer your comments, opinions, suggest topics or just have a good rant, please feel free to email: Michelle Russell.
Crunch time for PepsiCo in "all-natural" crisp lawsuit
06 Feb 2012 13:45
A New York man is the latest to file a lawsuit against soft drinks and snacks giant PepsiCo in the US.
Chris Shake is suing the firm over the "all-natural" claims on Frito Lay's Tostitos and SunChips crisps. The plaintiff says the snacks actually contain corn and oils made from genetically modified plants, according to Reuters.
Shake said he shelled out an additional $0.10 per ounce of crisps to buy the allegedly "all-natural" products, instead of a product such as Doritos, which makes no such claim, the publication noted.
This isn't the first time PepsiCo has been sued over its Frito-Lay products. A similar lawsuit was filed in California last month by Julie Gengo, alleging that Frito-Lay's snack products were "fraudulently labelled".
Both lawsuits are seeking to recover the amount of money allegedly paid by consumers in search of an "all natural" product, with the New York lawsuit estimating that the amount of total damages will exceed $5m.
However, according to the Center for Food Safety, there is no comprehensive, formal definition of the term "natural" when it is used on food labels, with the exception of some meat products regulated by the US Department of Agriculture.
This may not sit well with PepsiCo, who last year announced plans to make 50% of its snacks line from "all-natural" ingredients. To support the reformulation, Frito-Lay launched what it claimed was its largest marketing campaign in the history of the company.
On the lawsuit, a spokesperson for Frito-Lay told just-food: "Frito-Lay's first priority is making great snacks with high quality ingredients that people enjoy. We stand behind the quality and integrity of all of our products, and we are confident that our products and labeling comply with all regulatory requirements."
Polman speaks up for Unilever's food business
02 Feb 2012 14:49
Unilever CEO Paul Polman was keen to emphasise the robustness of the firm's food business this morning (2 February) after the consumer goods giant reported its annual results for 2011.
Polman told analysts the Anglo-Dutch consumer goods giant was "gaining share overall", while "maintaining reasonable volume growth" despite having taken significant pricing. "We are doing this while defending our profitability and investing in our brands," he said.
Underlying volumes from Unilever's foods division fell 3.9% in the fourth quarter of the year, leading to a 1.2% decrease for the whole of 2011. Sales from the unit were up 4.9% but that was due to the impact of price increases. Volumes from Unilever's refreshment unit - which includes ice cream - fell 3% in the last three months of the year. It was home and personal care and emerging markets - where food only accounts for a minority of sales - that drove Unilever's performance in 2011.
Polman conceded that he would have preferred "a better mix within volume and pricing" from its food division in 2011 but added: "Let's not get carried away, over the last three years this business has grown 3.5%."
He chose to focus on Unilever's spreads business to highlight the company's performance in food and its contribution to group earnings.
"It is a business that generates a significant amount of cash and profit for the company, allowing us to finance expansion in other parts of the business," he told analysts. "Looking forward we are hopeful that 2012 will bring a more stable cost and price environment, allowing us to better adjust the effectiveness of the actions we are taking to run spreads differently. We are in a good position with our focus on taste and health. It sets us up well to win with spreads in the future."
Investec analyst Martin Deboo, however, was less upbeat about Unilever's food prospects. He told just-food he was "struggling to see how it could be a positive volume outlook on food in FY12".
Nonetheless, Polman reiterated his confidence in Unilever's performance, informing analysts that, despite a gloomy economic outlook in North America and Europe, where growth is low, the company is "taking the right actions for group, for the long-term".
Reflecting on the performance of Unilever as a whole, he added: "It is better to make the dust than eat the dust ... we are confident as a company that we are making the dust. I expect certainly another challenging year out there, but we believe we are well prepared on what we need to do to further enhance our competitiveness."
We'll be running a more detailed analysis of the performance of Unilever's food divisions in 2011 - and the prospects for the businesses this year - tomorrow. Keep your eyes peeled.
US companies vie for Greek yoghurt supremacy
09 Aug 2011 14:53
The battle for the top spot in the US Greek yoghurt category looks to be intensifying after Danone launched an offensive this week.
The French food group yesterday (8 August) announced a brand relaunch and an advertising campaign targeting market leader Chobani. Danone has dropped the Dannon Greek brand and renamed the product Dannon Oikos Greek to tap into the popularity of sister brand Stonyfield Organic Oikos Greek yoghurt.
The announcement follows hot on the heels of General Mills' move this month to launch an advertising campaign in the US for its Yoplait Greek yoghurt.
A spokesperson for General Mills told just-food last week that the campaign will be its first for Yoplait Greek. And, let's not forget, the brand also received a package redesign and reformulation back in March.
Earlier this year, Danone chairman Franck Riboud described the yoghurt category in the US as an "emerging market", with US consumers eating just over half the amount of UK that UK consumers eat, by value.
In just-food's Category Crunch feature, published in May, Euromonitor described Greek yoghurt as "the big story" in the category, and this indeed appears to be ringing true as companies scramble to take a larger share of the market.
Chobani, a brand developed by privately-owned firm Agro Farma, currently leads the field with what it claims is 57% of Greek yoghurt sales in the US.
But with Kraft Foods, General Mills and Danone all investing heavily in their brands, Chobani is facing formidable competitors aware of the growth and potential of Greek yoghurt in the US.
Food inflation eases as stores boost offers
04 Aug 2011 11:47
UK shop-price growth slowed in the last month as food inflation eased and retailers offered discounts to attract shoppers, according to the British Retail Consortium (BRC).
Food inflation slowed to 5.2% in July from 5.7% a month earlier, while retail prices rose by 2.8% from a year earlier after advancing 2.9% in June, the BRC and Nielsen revealed yesterday (3 August).
BRC director general Stephen Robertson said the fall in overall shop price inflation came almost entirely from food.
"Good crops of seasonal fresh fruit and vegetables boosting supplies and cheaper animal feed easing the pressure on meat prices were the prime reasons food inflation fell, offering some respite to squeezed household budgets.," he said.
The fall will no doubt bring welcome relief to UK shoppers, who are seeing their finances continually squeezed. But there is also no doubt that shoppers will continue looking for savings to help pay for increases in other household bills.
UK cheese makers feel the heat
27 Jul 2011 13:46
Over 3,000 cheeses from around 25 countries, under a 70,000 sq ft marquee and in blazing heat. It might not sound like an ideal way to spend a Tuesday but for the UK cheese sector yesterday (26 July) was the start of a key event in the industry calendar.
Around 40,000 visitors made the trip to Nantwich in Cheshire for the largest two-day agricultural show in the UK and the International Cheese Awards. The great and the good of the cheese industry gathered for the event, which saw the likes of Arla Foods, Dairy Crest, First Milk, Wyke Farms, Asda and Tesco display their wares for the trade to sample.
And, of course, just-food was in attendance and, among other executives, managed to catch some time with Wyke Farms managing director Richard Clothier, First Milk's commercial director Richard Hollingdale and Dairy Crest customer marketing manager Adam Mehegan.
All spoke of the tough economic pressures the industry is facing but, amid the challenges, emphasised the importance of continued investment and innovation. And all three pointed to three key trends that manufacturers are focusing on - health, packaging and flavour.
Clothier told just-food that, as consumers "migrate up the flavour profiles of cheese", it is important that Wyke adjusts its innovation to suit.
"Consumers are looking for stronger and stronger cheeses, particularly ones that articulate more and more provenance, so we've been trying to innovate the packaging to articulate that better to the consumer," Clothier said.
He added that, along with flavour, key issues include adding healthier products to the company's portfolio and developing improved "packaging functionality" in the form of zip-tight packs and shelf-ready packs.
Mehegan told just-food that it is important for manufacturers to offer something unique to the consumer.
"As a business we are always trying to identify where the growth is going to come from. People are very emotive about cheese and if a brand offers a point of difference then they will buy it," he said.
"Lighter variants have now launched and the headroom there for growth is considerable. Health remains a massive focus for us going forward," he added.
And so as the show came to a close for the trade visitors yesterday, the industry prepared itself for today's consumer event, which for the manufacturers is seen a key day for receiving important feedback from the people who of course will buy and eat their products.
The Potential of Social Media - just-food needs you
24 Jun 2011 15:09
Social media is now playing a huge role in fuelling the food industry's relationship with its consumers.
However, questions remain over how to use the tools on offer. How can we fully utilise Facebook in order to engage with consumers, does tweeting really have an impact on sales and who should be responsible for an organisation's social activity?
These are questions you may be able to answer. We would love to hear your thoughts on how you and your company are using social media.
We've put together a 12-question survey, which should only take you a few minutes to complete.
As a thank you, we'll send you a complimentary copy of the upcoming 'Social Media in the Food and Drinks Industry' report when it's published, early next month.
Please click here to go to the survey.
Coca-Cola to challenge PepsiCo in dairy?
11 Feb 2011 15:34
While PepsiCo is looking to build its presence in dairy with the recent acquisition of a 77% stake in Wimm-Bill-Dann (WBD), arch rival The Coca-Cola Co has indicated its interest in the category.
PepsiCo yesterday (11 February) repeated its confidence in WBD, which it purchased in December last year for US$3.8bn.
Speaking on an earnings call, CFO Hugh Johnston told analysts: "We're excited about the benefits Wimm-Bill-Dann brings to our Eastern European business in terms of scale, operating capability and the expansion of our product portfolio, and we're equally excited about establishing a meaningful foothold in the fast-growing value-added dairy category."
However, in an interview with Bloomberg on Wednesday, Coca-Cola CEO Muhtar Kent said the firm will put "a lot of effort" into dairy drinks in conjunction with its growing juice business.
Coca-Cola's Minute Maid unit already sells a dairy and juice drink in China called Pulpy Super Milky.
No doubt Coca-Cola will look to build on this and really stir up the dairy drinks market.
Unilever feels force of Egypt troubles
31 Jan 2011 17:46
Consumer products giant Unilever has become the latest firm to suspend some of its operations in Egypt as widespread political protests against the country's president, Hosni Mubarak, enter their seventh day today (31 January).
Unilever told just-food today that it had closed "some of its offices" in the country, although the company declined to give further information on whether the troubles had affected its production operations.
While a number of major companies have curtailed operations in the country, on a macro level, analysts warned that Egypt's economic growth has already been damaged by the protests.
Moody's cut its rating on Egypt by one notch, warning that Egypt's public finances could suffer if authorities respond to the crisis by raising wages or increasing subsidies on food and fuel, the Guardian wrote today.
Sister site just-drinks reported this morning that Heineken has suspended beer and soft drinks operations in Egypt and flown ex-patriot employees out of the country. Snacks giant PepsiCo confirmed today that it was also doing the same with its own employees.
"PepsiCo's first priority is the safety of our employees and their families," the firm said in a statement. "We are continually evaluating our operations and making adjustments based on local conditions with employee safety in mind. Employees who are not residents of Egypt but who happen to be there at this time are being assisted by the company to return to their home countries as soon as feasible."
Other known companies to be affected by the protests include chemicals company Akzo Nobel, Japanese auto company Nissan Motor and US-based General Motors.
According to the BBC today, there is US$25bn of foreign investment in Egypt, around half of which is made up of shares in companies based in the country. If protests continue, economics could play a significant role in forcing a settlement.
Finsbury caught up in egg scare
07 Jan 2011 17:17
Finsbury Food Group has been revealed as one UK food manufacturer to have been affected by the contaminated egg scare.
The European Commission detailed how liquid egg from German farms where animal feed has been contaminated with dioxins entered the UK in processed products destined for human food. The UK's Food Standards Agency (FSA) has advised that there is no risk to health.
One of the firms involved is UK cake maker Finsbury. The company said that a site for its Memory Lane Cakes division received a batch of liquid egg containing a "small percentage of eggs" from a farm in Germany "potentially affected by a dioxin contaminated feed incident".
Finsbury insisted that the company has had "no confirmation that the batch of egg is contaminated with dioxin or at what level".
The batch was used to produce a range of short shelf-life cakes supplied to major UK customers. The majority of the products will have already been sold and have passed their use by date.
However, the firm said in a statement: "The board of Finsbury does not believe that there will be any significant or lasting impact on the group given the limited volume of product affected, however any product recalls that occur are covered by the company's insurance and whilst disruptive, there is no health risk."
Another firm also thought to be involved is Kensey Foods, based in Cornwall.
The European Commission said it is "closely monitoring the situation".
Snow falls but M&A activity heats up
22 Dec 2010 16:16
Even in the run-up to Christmas, the M&A merry-go-round keeps on turning.
Following the news this week that French dairy co-op Sodiaal has finalised plans to buy cheese maker Entremont Alliance, another significant piece of M&A hit the headlines.
Dutch food ingredients group DSM announced yesterday (21 December) that it has struck a deal to buy US-based Martek Biosciences in an all-cash transaction worth US$1.09bn. The transaction, DSM said, will add a "new growth platform for healthy and natural food ingredients for infant formula and other food and beverage applications".
CEO and chairman Feike Sijbesma has insisted that the deal is a "very attractive and strategic opportunity" for the Dutch firm, and said that it now plans to expand Martek's "strong position" in infant formula worldwide.
The all-cash transaction sent DSM shares up almost 4% on the Amsterdam Stock Exchange yesterday and analysts agreed that DSM's acquisition of Martek could benefit both firms.
Petercam analyst Jan van den Bossche told just-food: "It is a logical step given that they had an exclusive supply relationship with Martek. They know each other already pretty well and extensively, so in that sense, from management and cultural integration points, it seems to be a very clean fit."
More M&A news emerged in the UK today with food tycoon Ranjit Boparan, a shareholder in Northern Foods, admitting he could launch a hostile takeover bid for the food maker. Northern, the UK food group, is planning to merge with Ireland's Greencore. Shareholders are set to vote on those plans next month.
Boparan has been amassing a stake in Northern since its plans to merge with Greencore were announced last month. He currently holds 6.6%. Will he table an offer for the business? We will more than likely have to wait until after Christmas?








