The food business blog from Michelle Russell
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And so I bid farewell
29 Nov 2013 13:38
Sachin Tendulkar isn't alone in bidding farewell to colleagues as, today, I enter into my final few hours as news editor for just-food.
It is a bittersweet departure, however, as I am not venturing far. Only a hop, skip and a jump away, from Monday (2 December) I will be taking up the role of news and insights editor for sister site just-style.com where I will be reporting on all aspects of the global apparel sector.
And it is to style that I go, with very fond and often amusing memories of my time as a just-food journalist.
Highlights include my return to Dublin - a city that made me feel incredibly welcome for three years of my young life - to interview Greencore CEO Patrick Coveney, and the challenge of interviewing the deputy CEO of Russian retail giant Magnit through a translator. I'll also remember my calorific trip to Cologne earlier this year for the global confectionery show ISM.
So as I prepare to embrace my new role with the just-style team, I bow my head and bid farewell to the food industry and thank my colleagues on the just-food team for two great years.
And to any of our food retail readers who have a presence in the apparel industry, I look forward to continuing working with you.
Tesco draws line under US venture
27 Nov 2013 15:52
Tesco has finally drawn a line under its failed US venture with the announcement the sale of much of its business in the market has been sold.
After six years of losses, Tesco has closed its deal, announced in September, to sell assets to Yucaipa, the investment vehicle of US billionaire Ron Burkle,
The UK retail giant confirmed completion of the sale of over 150 stores and the unit's distribution and production facilities in California in a London Stock Exchange filing.
"Following the announcement of 10 September 2013 that Tesco had agreed the sale of the substantive part of Fresh & Easy's operating business to YFE Holdings Inc., an affiliate of Yucaipa Companies LLC, Tesco is today confirming the completion of the transaction," a statement read.
It was all a far cry from the words of former CEO Sir Terry Leahy in 2006, when he announced the retailer's plans to enter the US.
"With the new format we now think we can expand and be profitable in America," he said.
Tesco failed to make a profit in the US. The deal with Yucaipa even cost the retailer money.
All eyes are now on what Burkle and Yucaipa plan to do with the business.
Click here for just-food's insight into Tesco's US foray and what Yucaipa could do next with Fresh & Easy.
AAK wins business amid Premier supplier review
11 Nov 2013 15:55
Premier Foods plc this morning (11 November) announced it has signed a three-year, exclusive, oils and fats collaboration and product co-development deal with food ingredients group AAK.
The partnership is a result of Premier's 'Invest to Grow' programme, which the firm says has "enabled new opportunities to strengthen and grow relationships with key suppliers".
The group has recently been on a supplier offensive this year, cutting its network in half as part of a cost-saving plan.
In July, Premier revealed it had asked firms to sign up to "strategic partnership" deals that could lead companies to invest more in innovation and product development. A review of its business has resulted in the UK food group reducing its suppliers from 3,000 to around 1,500.
Reports today also revealed Premier is demanding small firms pay GBP5,000 if they want to remain on the company's list of prospective suppliers.
According to the Financial Mail on Sunday, the Oxo and Ambrosia foods producer has written to suppliers of equipment and services telling them of plans to introduce a ‘formal supplier appraisal process'.
"To cover the administration costs of initiating this programme in 2013, we require a payment from you of £5,000 plus VAT", the letter wrote.
Critics believe the cash-strapped firm is trying to ease its financial problems by leaning on small business suppliers that have little power to resist.
This new deal with AAK, however, just proves that with this new supplier strategy, where there are losers, there are also winners.
Premier did not return a request for comment on the supplier charges at the time of going to press.
ADM moves to reassure opposers of GrainCorp deal
06 Nov 2013 14:40
US agribusiness giant Archer Daniels Midland has attempted to dampen growing political and industry opposition to its acquisition of Australian grain trader GrainCorp in the country.
ADM tabled an offer of A$12.2 per share for GrainCorp earlier this year after completing an agreed period of due diligence on the firm.
The Australian Competition and Consumer Commission approved the deal in June, but the acquisition is still to be given the okay by the country's federal government.
As the deadline for authorities to rule on the A$3bn (US$) deal has approached opposition has steadily grown.
The deal has resulted in concern from growers that they could be hit with higher grain-handling fees. It also appears to have split the Coalition, with the Nationals warning Australia will lose control of its own food security if the sale is approved.
ADM grains president Ian Pinner, however, has moved to reassure growers it won't restrict access to ports or hike fees to uncompetitive levels.
"When we talk about the investment that we'll make in the supply chain ... and the commitments that ADM is making, we're not going to change the way GrainCorp operates, in fact we want to improve it,'' he told Australia's ABC radio today (6 November).
"With regards to fees ... it's not in our interests to be uncompetitive in a marketplace that has a lot of choice. Our goal is to ensure through being the preferred supplier that we're bringing as much grain through those assets as possible and to do that we have to be competitive."
Pinner said he believes farmers will benefit from wider access to foreign markets through ADM's global network.
Most foreign investment deals are approved by Australian authorities, particularly those involving US-based companies, a long-time ally of the country.
A decision on the deal is expected to be made by 17 December.
Barilla in damage limitation move over anti-gay remarks
05 Nov 2013 15:50
Barilla has attempted to dig itself out of a massive, PR nightmare of a hole, after its CEO recently sparked outrage by saying he would never use gay couples in commercials.
In September, Guido Barilla, the chief executive of one of Italy's largest food groups, reportedly told Italian radio programme La Zanzara he would not choose to make adverts that portrayed homosexual families.
The controversial remarks sparked outrage and fierce criticism from consumers and gay rights activists.
A subsequent "apology" by Guido followed claiming Barilla "cares about everyone, regardless of race, religion, belief, gender or sexual orientation".
The apology may not have been enough though. It seems the CEO has gone one step further and called in experts to help overhaul its image and promote diversity in its ads.
In a message on its website, the pasta maker says it has established a Diversity & Inclusion Board, comprising external experts and advocates who will "help Barilla establish concrete goals and strategies for improving diversity and equality in the company's workforce and culture with regard to sexual orientation, gender balance, disability rights and multicultural and intergenerational issues".
It will also sign up to the Human Rights Campaign's corporate equality index, which rates companies on how open they are to lesbian, gay, bisexual and transgender employees.
"As a socially responsible company that serves and respects diverse consumers, we know we have to expand our commitment," said Luca Virginio, Barilla's executive director of communication. "Our goal is to do better by becoming a global corporate citizen and leader in diversity and inclusion, internally and externally."
It is not known whether sales had been hurt by boycotts since the CEO's comments but Guido will no doubt be hoping this new move will smooth things over once and for all before any real damage is done.
Shoppers urged to take price match schemes with "pinch of salt"
23 Oct 2013 15:52
UK consumer watchdog Which? has insisted shoppers should be wary of supermarket price match schemes due to a skewing of each retailer's comparisons.
In a report today (23 October) Which? claimed supermarket price match schemes "differ greatly", meaning it can be hard to tell which supermarket is the cheapest, it said. Which? analysed the till receipts of 19 Asda shops, 20 Tesco stores and 20 Sainsbury's outlets, checking the price of each basket with the supermarket's own online price match.
In the majority of cases, the supermarket visited claimed to be cheaper than its rivals. However, the consumer group said each supermarket calculates its price match schemes in different ways "We believe these claims should be taken with a pinch of salt," Which? said.
The results of the analysis found Asda was the cheapest on the most occasions (17 out of 19) according to its 'Price Guarantee'. Sainsbury's was cheaper than Asda and Tesco for ten of the visits, and joint cheapest for another two, according to its 'Brand Match'. Tesco was cheaper than Asda and Sainsbury's for ten of the 20 visits according to its 'Price Promise'.
Which? executive director Richard Lloyd, said: "Supermarket price-matching schemes can save you money but we believe they should be taken with a pinch of salt because they are difficult to compare. At a time when consumers are facing a squeeze on their household incomes, we want all the supermarkets to do whatever they can to help consumers find the best deal."
As discounters continue to gain serious ground in the UK, the price-match schemes of the main retailers are an important weapon to retain customers.
This latest Which? report was published, ironically, on the same day that Sainsbury's had an advert plugging its Brand Match price comparison scheme banned by the UK's advertising watchdog for "misleading consumers".
The Advertising Standards Authority ruled the advert implied consumers did not need to shop around to benefit from the full savings from deals, which, the watchdog said, "was not the case".
Buffett not sharing Peltz PepsiCo split sentiment
16 Oct 2013 15:04
It seems US business magnate Warren Buffett has very different views to activist investor Nelson Peltz on whether PepsiCo would benefit from a split.
Major stakeholder Peltz has been pushing for some time for PepsiCo's snacks and beverage divisions to operate as two separate companies. He first backed a plan that would split the divisions - and then potentially merge the latter with Mondelez International - earlier this summer.
In a so-called 'White Paper', Peltz argued that PepsiCo is at "a strategic crossroads" and that changing consumer tastes and the increased importance of emerging markets have changed the outlook for its key businesses.
However, Buffett offered a different view when speaking to CNBC this morning. Although not a PepsiCo shareholder, the activist investor said he would not split the company, when asked if he shared Peltz's sentiment on such a move.
"No, if I own Pepsi - if I own control of the company I'd keep both - they're both - well one of them is a terrific business and the other is a perfectly good business and why break them up," he told Andrew Sorkin.
"I believe in in running the company for shareholders that are going to stay, rather than the ones that are going to leave and if you are going to stay as a shareholder of Pepsi I think you like the idea of them having two good businesses."
Buffett's views are unlikely to deter Peltz in his quest to seek a split but, regardless. Any decision on such a move appears unlikely to be made any time soon anyway. Peltz will just have to be content, for the time being, with PepsiCo's increase in year-to-date earnings and sales issued by the firm this morning.
Click here to view the interview.
Kraft Foods, ConAgra extend marketing tie-up
11 Oct 2013 16:31
US food manufacturers Kraft Foods Group and ConAgra Foods are extending their marketing partnership through a series of new campaigns.
ConAgra and Kraft first worked together a decade ago. ConAgra's Ro*Tel tomatoes brand and Kraft's Velveeta cheese were co-marketed to create recipes including the so-called Famous Queso Dip.
Now, ConAgra, with its Hunt's tomatoes, and Kraft, with its Parmesan cheese, are adding nine recipes to the Hunt's Signature Recipe Collection - recipes made using both brands - that was launched earlier this year.
By trying these new recipes, consumers first receive a money-off coupon for the products. After creating the dish, when consumers share the recipe via social networks, they can then enter a competition to win prizes that include a chance to host a dinner party with celebrity chef George Duran.
Later this autumn, the two companies will also reportedly co-market ConAgra's Swiss Miss cocoa and Kraft's Jet-Puffed Mallow Bits in-store.
ConAgra and Kraft are also continuing to work on campaigns using the Ro*Tel and Velveeta brands. The Queso For All campaign includes online marketing, TV ads and a sampling tour across the US.
The relationship between the two companies initially began with in-store displays and promotions, and has since evolved into the kind of fully integrated marketing partnerships seen for the Hunt's and Parmesan products. By sharing portions of their advertising and promotions communications budgets, and collaborating on the campaigns, ConAgra and Kraft are hoping to - in a more financially effective way - boost sales in a challenging US grocery sector.
World Retail Congress 2013: E-commerce a key piece of the successful retail formula
11 Oct 2013 10:45
As global speakers took to the podiums over the two and a half days of the World Retail Congress in Paris, one subject reoccurred, time and again: e-commerce and the evolution of digital.
The subject is one that most in the industry will be more than familiar with, but speakers this year were keen to drive home the importance retailers should place on having a presence in this channel if they are to survive and keep ahead of the game.
According to a report presented by the World Retail Congress, almost two thirds of 150 senior retailers surveyed said they believed internet sales had become more important in the last 12 months.
And indeed this certainly appeared to be the case for those speaking at the Congress in Paris this week. Leading retailers spoke either of their already well-established e-commerce operations or their efforts to build such a presence.
Tony Stockil, CEO of Javelin Group, was also keen to drill home the importance of having a digital presence to delegates to the conference this week when he told retailers they must embrace online "or perish".
He stressed how it had become "critical" for retailers to have an online presence, which he suggested was important not just to boost sales but to drive traffic into stores.
"The incentives for retailers to transform themselves or perish is becoming more important."
Ocado CEO Tim Steiner, however, offered a different view on the subject. As a pure online retailer, he was keen to point out the "long-term headache" the rapid increase of online shopping will cause for bricks-and-mortar retailers. The digital channel, he suggested to delegates, will eat into sales within stores.
This view, however, is in contrast to results from the survey, which revealed that consumers put bricks-and-mortar stores as their "most important" channel. More than half (55%) of those surveyed planned to increase the number of their international stores, with one in three set to increase their overall store footprint.
Maybe Danish retailer Dansk Supermarked has the formula right. The results appear to fit with the strategy the group has in place to revitalise its top and bottom line. CEO Per Bank was keen to emphasise this week that the grocer was not ready to abandon its flailing hypermarket operations just yet, with a turnaround plan currently in place that he hopes will revive the format for group.
So while retailers scramble to invest in their online present in order to keep apace with evolving shopper habits, it appears they may do well to bear in mind that covering all bases may be key to growth in the long term.
Click here to read just-food's coverage of the World Retail Congress in Paris.
World Retail Congress 2013: Customer loyalty key amid changing retail landscape
09 Oct 2013 09:32
Despite talk of the rapid growth of e-commerce and optimism for the emerging markets, one key message has run through the presentations of the World Retail Congress in the last two days: don't forget the customer.
There is no doubt there has been a shift in consumer shopping habits since the recession. The convenience format has become increasingly essential, the desire for value has led to the growth of the discounter along with fierce promotional activity, and more sophisticated technology has led to a migration of consumers from bricks and mortar to online shopping.
But while shopping habits have evolved and retailers have been scrambling to invest to keep apace, those that have kept their eye on tailoring the consumer proposition are those that will win out. This has been the message to delegates in Paris this week.
Tony Stockil, CEO of Javelin Group told attendees on Monday retailers need to be more customer as well as digitally-oriented. "We need to be offering more convenience, better price, a wider assortment. They are all essential."
Ian Cheshire was keen to remind attendees the fundamental change in the retail model was down to "the way the customer controls us". Therefore, he suggests, the customer remains key.
However, it was Coca-Cola Co. chief customer officer, Sandy Douglas, that summed it up succinctly. "Disappoint a consumer and their disappointment will flash across the digital network".