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European Business News – Week ending October 1, 2010

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European Business News – Week ending October 1, 2010

October 01
16:42 2010

Famous for its R&D capability and global reach, Nestle is taking a lead in combining food science with that of the pharmaceutical industry. The creation of Nestle Health Science and the Nestle Institute of Health Sciences will take the concept of functional foods and ‘nutrition, health and wellness’ to a new level. Nestle’s aspiration is to pioneer a new industry sector – personalised health science nutrition.

Nestle intends delivering world class excellence in biomedical research to better understand human diseases and ageing, and to use this knowledge to develop products to prevent and treat health conditions such as diabetes, obesity, cardiovascular disease and Alzheimer’s disease.

Female Lead

Denise Morrison.

Female chief executives of major food and beverage companies are a rarity but the number is about to be increased following Campbell Soup Company’s decision to appoint Denise Morrison as executive vice president and chief operating officer in anticipation of her succeeding Douglas Conant as chief executive in July 2011. She is obviously well versed in leading a large business having, for the last three years, headed the North American soup, sauces and beverages unit, which accounts for 42% of Campbell’s $7.7b turnover and about 63% of its profit.

She joins a select band of female heads of the largest US food and beverage corporations featuring Indra Nooyi at PepsiCo, Irene Rosenfeld at Kraft Foods, and Patricia Woertz at Archer Daniels Midland.

Indra Nooyi.

Indeed, Indra Nooyi was recently named by Fortune magazine as the most powerful woman in US business for the fifth year in a row. Of course, Irene Rosenfeld led Kraft’s recent $18 billion hostile takeover of Cadbury. Indra Nooyi is reported to have been paid a salary of more than $14 million last year while Irene Rosenfeld received $22 million.

Another prominent US business woman, Brenda Barnes was head of Sara Lee until retiring for health reasons in August. She had also become the first female chief executive at PepsiCo, leading the group’s North American business.

On this side of the Atlantic, there are no food and drink companies of a comparable scale headed by women. However, female chief executives of major companies include Hanne Refsholt, chief executive of Norwegian dairy co-operative TINE; Kate Allum, head of UK dairy co-operative First Milk; Stella David at Scotch whisky distiller William Grant & Sons; and Dominique Heriard Dubreuil, chairman of French drinks group Remy Cointreau.

Escalating M&A Activity

A recent report by Grant Thornton indicates that the UK food and beverage industry has recovered early from recession and that merger and acquisition activity is set to escalate. Having been preoccupied with cutting costs to cope with sharp input price inflation in 2007 and 2008, many UK-based manufacturers are now focusing on new product launches and expanding into new markets.

Indeed, UK exports of food and non-alcoholic drinks to overseas markets are forecast to break the £10 billion barrier for the first time this year.

Also confirming the report’s findings on M&A activity, two major UK-based branded food businesses – United Biscuits and Unilever’s Ragu and Chicken Tonight ambient sauce brands – have been put up for sale. UB has attracted the interest of Chinese food conglomerate Bright Food Group. Another well know British business, Dairy Crest, is also the subject of acquisition speculation after Theo Muller, the privately owned German-based dairy group which is also the leader in the UK yoghurt market, increased its stake to a declarable 3.04%.


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