Tag Archive | "beverages"

CCL Label’s Beverage Decoration – label and sleeve solutions for beverages


Custom-made decorations have become a main focus for the beverage industry. Whether large global companies or small emerging beverage producers, everybody is looking for unique eye-catching labels.

At this year’s BrauBeviale CCL Label presented the latest label and sleeve solutions for beverages.

Exciting effects and innovations drew many interested visitors to booth 7A-510. The Pressure-Sensitive Labels with Perfect Paper Match look created an immediate desire to pick up the bottle and feel the surface of the label. They are the perfect solution for traditional brands that originally carried paper labels, since they combine the appearance of paper labels with all the advantages of PSL.

The exhibited shrink sleeves also attracted a lot of attention. The 360° decorations are especially popular for promotion purposes or product launches. Embellishments such as different kinds of varnishes combined with brilliant printing quality make them an outstanding decoration.

The latest stretch sleeves such as the Triple S® for ViO Bio Lemonade also made a lasting impression on visitors. As well as being one of the most sustainable decoration solutions, it also offers a vast range of design possibilities.

CCL Label is looking forward to meeting existing and potential new customers again next year in Nuremberg, when the BrauBeviale 2016 opens its gates.

CCL Industries Inc. is a world leader in the development of label and specialty packaging solutions for global producers of consumer brands in the home and personal care, healthcare, durable goods, and specialty food and beverage sectors. Founded in 1951, the Company has been public under its current name since 1980.

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PepsiCo Finalises Strategic Alliance in China


PepsiCo has completed its a strategic beverage alliance in China with Tingyi (Cayman Islands) Holding, one of the leading food and beverage companies in China. China is projected to become the world’s largest beverage market by 2015. The alliance was approved by the shareholders of Tingyi in February and has now received regulatory approval.

As part of the alliance, Tingyi’s beverage subsidiary – Tingyi-Asahi Beverages Holding (TAB), one of the country’s leading beverage manufacturers – is now PepsiCo’s franchise bottler in China. TAB will partner with PepsiCo’s current bottlers to manufacture, sell and distribute PepsiCo’s carbonated soft drink and Gatorade brands. In addition, PepsiCo and TAB will begin co-branding their respective juice drink brands using the Tropicana brand name under license from PepsiCo. PepsiCo will retain branding and marketing responsibilities for these products.

Under the terms of the alliance, PepsiCo has contributed its indirect equity interests in its company-owned and joint venture bottling operations in China to TAB and received as consideration a 5% indirect equity interest in TAB. PepsiCo has an option to increase its indirect holding in TAB to 20% at its sole discretion by 2015. The shareholdings of PepsiCo’s existing Chinese joint venture partners in the joint venture bottling operations will not change as a result of the transaction.

“China will soon surpass the United Statesto become the largest beverage market in the world. As a result of this new alliance with Tingyi, PepsiCo is extremely well positioned for long-term growth in China,” says PepsiCo chairman and chief executive Indra Nooyi. “Tingyi is an outstanding operator with a proven track record of success. By leveraging the complementary strengths of each company, we’ll be able to significantly enhance our beverage business in China, reach millions of new consumers throughout the country, and create value for Tingyi and PepsiCo shareholders.”

This transaction involves the companies’ respective mainland China beverage operations. Both PepsiCo and Tingyi will continue to independently operate their respective food businesses.

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Major Restructuring at PepsiCo to Maintain Profitable Growth


With worldwide snacks and beverage volumes rising by 8% and 5% respectively, PepsiCo has increased operating profit by 16% to $9.63 billion on net revenue up 15% to $66.5 million for 2011. Reported net income rose by 2% to $6.46 billion.

The results reflect top-line gains across its worldwide snacks and beverage businesses, the acquisition of Wimm-Bill-Dann in Russia, gains from sales of certain businesses and the favorable impact of an extra reporting week offset by high commodity costs.

“In 2011, we delivered solid top- and bottom-line growth,” says PepsiCo chairman and chief executive Indra Nooyi. “We continued to stimulate strong consumer demand for our products, and our successful pricing and productivity programs partially offset the impacts of inflation. Importantly, in a year characterised by a challenging macroeconomic environment and political turbulence, we took advantage of gains from strategic adjustments to our portfolio to reinvest in key capabilities and markets.”

Full-year worldwide snacks volume increased 2.5% on an organic basis, reflecting broad-based gains in the snacks portfolio. Full-year worldwide beverage volume increased 1% on an organic basis. The volume performance was led by growth in emerging markets, where volume increased 8% in snacks and 3% in beverages on an organic basis.

In Europe, volume increased in double-digits for both snacks and beverages, including the impact of the WBD acquisition. Net revenue increased by 41%, and by 12% excluding the impact of the WBD acquisition. Full-year operating profit advanced by 18%.

PepsiCo chairman and chief executive Indra Nooyi.

To maintain its growth momentum, PepsiCo has unveiled a major restructuring and productivity program with the savings being invested in its brands. Entailing the shedding of about 8,700 jobs or 3% of the global workforce, PepsiCo’s new multi-year productivity program is expected to generate $1.5 billion of incremental cost savings by 2014 through optimisation of operating practices and organisation structure. PepsiCo plans to increase advertising and marketing support behind its global brands by $500-$600 million in 2012, with particular focus on North America. Going forward, it expects to maintain or increase that rate of support as a percentage of revenues.

As a result of the productivity programme, PepsiCo incurred pre-tax non-core restructuring charges of $383 million in the fourth quarter of 2011 and it anticipates additional charges of approximately $425 million in 2012 and another $100 million from 2013 through 2015. These charges resulted in cash expenditures of $30 million in the fourth quarter of 2011, and the company anticipates approximately $550 million of related cash expenditures during 2012, with the balance of approximately $175 million of related cash expenditures in 2013 through 2015.

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Barry Callebaut Extends Swedish Production Site


Barry Callebaut, the world’s leading manufacturer of cocoa and chocolate products, has inaugurated an extension to its dedicated spray-drying production facility in Kagerod in southern Sweden. This SFr10 million (Eur8 million) investment increases the capacity of Barry Callebaut’s centre of competence for beverages for producing spray dried products by up to 50%.

 

With the capacity extension at its specialty production site, Barry Callebaut will be able to further grow the company’s Gourmet & Specialties Products business, serving professional users with convenient products offered under a variety of beverages brands. The newly installed spray tower will commence production in December 2011. The capacity increase will partly be used for fulfilling a long-term supply agreement Barry Callebaut signed with an international specialty coffee company at the end of 2010.

 

Juergen Steinemann, chief executive pf Barry Callebaut, says: “The inauguration of the new spray tower in Kagerod marks another important milestone in growing our Gourmet & Specialties Products business. In the last decade we have continuously invested in our Beverages business and built an innovative center of competence in the south of Sweden.”

 

The Beverages division is a part of the Gourmet & Specialties Products business of Barry Callebaut. Headquartered in Sweden, it is a leading player inEuropein the area of cocoa based powder solutions used in chocolate, cocoa and cappuccino beverages. Through its Beverages division, Barry Callebaut serves the vending and office coffee industry as well as the HORECA (hotels, restaurants and caterers) business. At its site in Kagerod, Barry Callebaut operates an integrated, state-of-the art production site, where most of the beverages products are manufactured. They are mainly marketed inEurope, but are also delivered to customers all over the world.

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Unilever Reorganisation Designed to Drive Growth


Unilever has announced changes to its category and go-to-market structure to further support its growth plans, especially in its fast-developing businesses in the emerging markets. The new structure is designed to facilitate a more efficient rollout of increasingly bigger and more scalable innovations, and the optimisation of resources behind strategic priorities.

“Unilever now has over half its turnover in the emerging markets, where, over the last 10 years, growth has been close to double digits. We have an opportunity to better support this footprint of the business, to keep our strong momentum, with a more globally aligned country and category organisation,” explains Paul Polman, chief executive of Unilever.

As part of these changes Harish Manwani will be appointed as chief operating officer, with effect from 1 September, and will take responsibility for all markets, in order to drive speed-to-market behind further simplification and efficiency.

“Over the past few years we have seen a significant step-up in our innovation success rate and our speed to roll them out across markets. The new structure will further accelerate this,” adds Paul Polman.

Paul Polman, chief executive of Unilever.

The Category organisation will be broadened to four categories reporting directly to Paul Polman.

Dave Lewis, currently president , Americas, will be appointed as president, Personal Care consisting of Skin, Deodorants, Oral and Hair.

Kevin Havelock, currently executive vice president Ice Cream, will be appointed as president of the newly established Refreshment category which includes ice cream and beverages.

Antoine de Saint Affrique, currently executive vice president Skin, will be appointed as president, Food which includes savoury, spreads and dressings.

In the Home Care category, Randy Quinn, currently executive vice president Laundry, and Sean Gogarty, senior vice president Household Care, will report directly to Paul Polman.

The new structures will be put in place during the third quarter and will be fully operational before year-end.

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Fifth Consecutive Quarter of Growth at Unilever


Food, personal care and home care group Unilever has delivered its fifth consecutive quarter of growth as its transformation strategy continues. Turnover in the first quarter increased by 7% to Eur10.9b as underlying sales rose by of 4.3% with all categories growing, driven by emerging markets up 9.9%. Underlying volume growth was 2.5% and pricing was up 1.8%.

Reflecting another good performance in the emerging markets, revenue in ice cream and beverages during the quarter was Eur1.94b with underlying sales growth of 4.7%. The Magnum brand is continuing to grow rapidly, fuelled by the launches in the US and Indonesia. Cornetto is also doing well, particularly in Asia with a strong performance in China.

Paul Polman, chief executive of Unilever.

Tea grew on the back of a strong performance in South Asia, good share gains in the UK and the early success of the Lipton pyramid Green and White teas in Western Europe and Russia. AdeS soy drinks continue to deliver rapid growth in Latin America supported by new flavours, packaging and communication.

Underlying sales in savoury, dressings and spreads rose by 2.1% to Eur3.38b as all the sub-categories delivered sales growth on the back of strong innovations and increasing price. Savoury growth was driven by Knorr jelly bouillon and Knorr baking bags, successfully launched in Brazil and growing well in Europe. The mild winter held back sales of soups in Europe whilst PF Chang’s restaurant quality frozen meals are doing well in the US.

Dressings grew through the successful campaign to inspire new uses of mayonnaise. Rising commodity costs, especially in spreads, required higher pricing which led to negative volumes in the quarter. However, Unilever has a strong programme of innovation, for example the launch of Flora Cuisine liquid margarine in the UK, with more to come as the quality and taste of the group’s products are improved.

“We have delivered a good performance which demonstrates that the transformation of Unilever is progressing well; this against a backdrop of rising commodity costs, weak consumer confidence and very competitive markets. All categories are growing, driven by a particularly strong performance in the emerging markets. We have continued to deliver volume growth, albeit at a lower rate than in recent quarters reflecting the pricing action taken and the sluggishness of the developed markets. Innovation continues to be the key driver of growth,” comments Paul Polman, chief executive of Unilever. “We continue to focus on the long term development of the business and our priorities remain: profitable volume growth ahead of our markets, steady and sustainable underlying operating margin improvement and strong cash flow.”

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Record Fall in UK Food Prices


UK prices of food and non-alcoholic beverages fell by 1.4% between February and March this year compared with a rise of 0.3% between the same two months a year ago, according to the Office for National Statistics. The 1.4% this year was a record fall for a February to March period.

The downward effects were widespread and reflected supermarket led sales this year. The most notable contributions came from fruit where prices fell by 4.7% this year (also a record February to March movement) but rose by 0.7% a year ago, and bread and cereals where prices fell by a record 2.6% this year compared with a fall of 0.2% a year ago

The downward pressure from food and non-alcoholic beverages was a major contributor to a drop in CPI (Consumer Price Index) annual inflation, which was down from 4.4 per cent in February to 4.0% in March.

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Solid 2010 Performance by Royal FrieslandCampina


Dutch dairy co-operative Royal FrieslandCampina increased net revenue by 10% to Eur8.97b and profit by 57% to Eur285m during its 2011 financial year as it benefited from more favourable market conditions, particularly in Asia and Africa. However, in Europe declining dairy consumption put pressure on volume.

FrieslandCampina’s Ingredients and Consumer Products International business groups made a strong contribution to the increase in revenue and operating profit. Cheese & Butter saw an improvement in operating profit. Thanks to FrieslandCampina’s good results and the higher guaranteed price, the milk price its the member dairy farmers, which fell in 2009, increased by 25% in 2010.

The net revenue of the Consumer Products International business group (Asia, Africa, the Middle East and exports) jumped 20.3% to Eur2.28b, due to a combination of volume growth, price rises and currency effects. The net revenue of Consumer Products Europe rose by 1.5% to Eur3.27b. Although growth was achieved in Russia, in most other markets volumes were lower and prices were under pressure due to increased promotional support. Despite the difficult market conditions, the market share of most of the brands was expanded or maintained.

Cees ‘t Hart, chief executive of Royal FrieslandCampina.

Cheese & Butter’s net revenue grew by 7.3% to Eur2.35b, reflecting higher prices for both products and increasing exports of cheese. The volume of cheese produced and sold was lower, partly due to the sale of the Bleskensgraaf cheese factory, but this was offset by the higher cheese and butter prices.

The net revenue of the Ingredients division rose by 37% to Eur2.06b helped by higher income from special ingredients for the food industry, such as milk powder and caseinates.

“The year 2010 ended with a good result. The market share of most brands were improved or maintained. Volumes rose. Both the revenue and the operating profit increased in line with our ambition to grow and create value,” says Cees ‘t Hart, chief executive of Royal FrieslandCampina. “In 2010 the merger between Friesland Foods and Campina which started at the end of 2008 was completed. There is a clear focus on growth, further professionalisation of the organisation and co-operation. Our market focus and efficiency have improved, so that FrieslandCampina is now ahead of schedule in realising its synergy objectives.”

During 2011, FrieslandCampina will continue to follow its ‘route2020’ development strategy, which aims for growth in dairy based beverages, baby and infant food, branded cheeses and specialised ingredients. Investments are planned to expand production capacity and to improve efficiency and innovation.

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Surge in Sales at PepsiCo


Driven by gains across its worldwide snacks and beverage businesses, and from the acquisitions of its anchor bottlers earlier in the year, PepsiCo has reported a 34% surge in net revenue to $57.84b for 2010 with net income up 6% to $6.34b and ahead by 15% on a constant currency basis.

The successful integration of its two anchor bottlers to create more-efficient and effective beverage businesses in its key North American market and in Europe, allowed PepsiCo to deliver more than $150m in synergies from the acquisitions in 2010, above target for the year. The strong pace of synergy realisation and the identification of additional synergies have led PepsiCo to increase expectations for total synergies through 2012 to more than $550m.

During the year, the US-based soft drinks and snacks group acquired Wimm-Bill-Dann, Russia’s preeminent food and beverage company, to significantly strengthen its competitive position in Russia and Eastern Europe, while also providing a strong foothold in the attractive dairy category.

Indra Nooyi, chairman and chief executive of PepsiCo.

“The underlying performance of our businesses remained solid despite a challenging macroeconomic environment,” says Indra Nooyi, chairman and chief executive of PepsiCo. “We posted broad-based worldwide gains in both snacks and beverages, our businesses deftly balanced a delicate price-value consumer equation, and we aggressively managed costs and productivity to deliver top-tier financial results.”

She continues: “Importantly, we are entering 2011 an even-stronger, more-capable organisation. Our core global snacks and beverage businesses benefit from strong brands, world class go-to-market systems, and innovative and differentiated products and we strengthened these advantages in 2010 through targeted investments.”

While encouraged by the momentum of the businesses entering 2011, she is mindful of a weak consumer landscape given the poor macroeconomic picture, especially in key developed markets, the high levels of cost inflation for the coming year, driven by broad and pronounced commodity inflation, and a potentially difficult competitive pricing environment, particularly in beverages.

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‘Health,’ ‘Naturalness’ and ‘Energy’ the Buzzwords for New Beverages


Rising consumer interest in health and naturalness is being strongly reflected in new product activity in the global soft drinks market. According to Innova Market Insights, 60% of the soft drinks launches recorded globally in 2010 had a health positioning of some sort. This was primarily in terms of ‘passive health’ (food minus), although over 20% of products were launched with an active health (food plus) message of some kind.

“Interest in health is clearly not the only factor driving soft drinks product activity, but it has become highly significant in indicating potential future market directions, both globally and regionally,” says LuAnn Williams, head of research at Innova Market Insights. “While hydration and refreshment remain key to the market, many traditional soft drinks categories such as carbonates, are maturing, and there is rising interest in newer, often higher-value-added lines offering additional benefits, which increasingly seem to include healthier options.”

The most popular health-related claims recorded by Innova Market Insights during 2010 were undoubtedly concerned with ‘naturalness’ and freedom from artificial additives and preservatives. This encompassed a wide range of products, led by juices and water, which tend to be seen as inherently fairly natural. Over 20% of launches recorded by Innova Market Insights were marketed as free from additives and preservatives, while well over 10% were marketed as natural. Combining the two categories resulted in nearly one-third of total soft drinks launches using either one or both claims.

The more traditional health-related area of low-calorie or diet drinks also continued to receive considerable attention, with reduced-sugar, sugar-free and no-added-sugar lines taking second place overall in terms of health claims, ahead of low-calorie products. Over one-fifth of launches were positioned as either low-calorie or sugar-free/reduced-sugar/no-added sugar or both. The next place, but at a distance, went to drinks marketed as containing antioxidants, used on about 6% of the 2010 drinks launches recorded by Innova Market Insights; just under half of which were juices and juice drinks.

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Irish Food and Drink Exports Approach €8 Billion Mark


The Republic of Ireland’s food and drink export sales rose by 11% in 2010 to reach €7.9 billion. The increase, amounting to just over €800 million, was supported by a more stable consumer environment, reduced exchange rate pressures, and improved relative competitiveness. It was also boosted by rising global prices for most agricultural commodities.

“The strength of the industry’s export performance is all the more commendable for the fact that it has been achieved in what remains a highly competitive marketing environmentt” points out Dan Browne, chairman of Bord Bia, the trade development and promotion agency for Irish food, drink and horticulture. “All major categories recorded increases, led by dairy, which jumped by more than €300 million or 17%. Meat and livestock exports were almost €200 million higher while beverage and prepared food exports recorded growth of €130 million and €100 million respectively.”

Aidan Cotter (left), chief executive, and Dan Browne, chairman of Bord Bia.

The Irish food and drink industry is continuing to increase its penetration of Continental EU markets. Exports to the mainly eurozone markets increased by 14% during 2010. Continental EU markets now account for 34% of the industry’s total exports of food and drink.

The economy continues to dominate consumer thinking and behaviour throughout many key European markets, where more consumers believe their purchasing power will decrease than increase over the coming two years. The results of the fourth wave of Bord Bia’s Feeling the Pinch survey, completed in late 2010, also shows a high degree of uncertainty remains among Irish and British consumers. Indeed, the only certainty that appears to be emerging is that significant change is unlikely to materialise in 2011 and as the search for value continues, consumers are embracing the ‘new normal’.

Nevertheless, looking ahead to 2011 the prospects for Irish food and drink exports remain positive, helped by strong global demand for commodity products and a relatively tight supply situation in a number of key product categories. “In a year in which the world’s population will reach seven billion, growth in global demand is set to underpin food markets well into the future, albeit with some volatility to be expected,” according to Aidan Cotter, chief executive of Bord Bia. “The challenge for the Irish food and drink industry is to maintain its current momentum, particularly in the areas of cost competitiveness, innovation and marketing.”

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PepsiCo to Acquire 66% of Wimm-Bill-Dann For $3.8 Billion


PepsiCo is acquiring a 66% stake in Wimm-Bill-Dann Foods, Russia’s leading branded food and beverages company, for $3.8b, pending the required government approvals. Wimm-Bill-Dann is a leader in both traditional and value-added dairy products, with a solid position in juice.

The transaction will establish PepsiCo as the largest food-and-beverage business in Russia, make it a leader in the country’s fast-growing dairy category and build its presence in key markets in Eastern Europe and Central Asia. It will also raise PepsiCo’s annual global revenues from nutritious and functional foods from approximately $10b today to nearly $13b. This moves the US-based beverages and snacks group closer to its strategic goal of building a $30b nutrition business by 2020.

“Adding Wimm-Bill-Dann to PepsiCo’s portfolio is financially attractive and gives us a strong, high-growth platform in the dairy category,” says Indra Nooyi, chairman and chief executive of PepsiCo. “It also gives us clear leadership in the food and beverage industry in Russia, a fast-growing, strategically important market offering abundant opportunity. At the same time, Wimm-Bill-Dann’s strong, value-added dairy business immediately advances our global nutrition strategy to provide consumers around the world nutritious foods and beverages that are accessible, affordable and advantaged by science. Dairy has a huge, untapped potential to bridge snacks and beverages. We see the emerging opportunity to ‘snackify’ beverages and ‘drinkify’ snacks as the next frontier in food and beverage convenience.”

Wimm-Bill-Dann was founded just 18 years ago with a handful of employees. Today the group employs over 16,000 people and operates 38 production facilities.

The integration of Wimm Bill Dann is expected to yield pre-tax annual synergies of approximately $100m by 2014. The completed transaction will bring together PepsiCo’s large global food and beverage brands (Pepsi-Cola, Lipton and Lay’s), its Russian juice and water brands (Fruktovi Sad, Ya, Tonus, Hrusteam and Aqua Minerale) and Wimm-Bill-Dann’s portfolio of leading dairy and juice brands (Domik v Dorevne, Chudo, Imunele, J7, Lubimy Sad, 100% Gold Premium and Agusha).

Upon completion of the full Wimm-Bill-Dann acquisition, PepsiCo’s brands will rank first among food and beverage companies operating in Russia, with approximately $5b in revenue. PepsiCo will have six of the twenty largest food and beverage brands in Russia.

PepsiCo will be approximately twice the size of its nearest food and beverage competitor in Russia, with an unmatched distribution platform for its products. PepsiCo will employ approximately 31,000 people in Russia, Ukraine and Central Asia and have 49 manufacturing facilities, making the company one of the largest food and beverage employers in the region.

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Coca-Cola Opens Three Plants in China


Coca-Cola has opened three new bottling plants in China worth a combined $240m, continuing its rapid expansion in one of the world’s largest and fastest growing beverage markets. The new investments are a part of Coca-Cola’s three-year $2b accelerated investment in China and the latest phase of Coca-Cola’s long-term commitment to its business in China.

Muhtar Kent, chairman and chief executive of Coca-Cola.

The investment is also aligned with the government’s call to develop the central and western areas of the country. The plants in Hohhot in Inner Mongolia, Luohe in Henan Province and Sanshui in Guangdong Province will locally produce beverages such as Coca-Cola, Sprite, Fanta, and Minute Maid to quench the thirst of consumers in those regions.

 

Coca-Cola now has more than forty bottling plants in China, having opened six during the past two years. “Our business has experienced strong growth year on year in China, which is now our third largest market. More importantly, the new plants in Inner Mongolia, Henan and Guangdong, will extend our competitive edge in China,” says Muhtar Kent, chairman and chief executive of Coca-Cola.

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The Future of the $7 Billion International Weight Management Market


The international weight management market was worth an estimated $7.3b in 2009, and it is set to grow year-on-year at between 6-8% for the next 5 years, according to Leatherhead Food Research.

Weight management has been reincarnated in various forms throughout the food and drink industry over the years. The direction of the industry is shifting from ‘better for you’ products (ie diet and low and light foods) towards functional weight management products providing consumers with differentiation and added value, as well as fuelling innovation and growth within this market.

General trends identify that a successful weight management product has to be both convenient and offer a benefit which can be felt quickly, if not immediately. Indeed, Leatherhead Food Research identifies two key challenges facing the weight management industry in the near future – providing consumers with a clear benefit and message, and achieving taste and texture for the mass market.

A large array of products and ingredients ensures that manufacturers need to be clear about what their product delivers. Any benefit needs to be quickly felt or seen, otherwise consumers will become sceptical.

The final product needs to not only deliver a clear benefit, but also to taste and feel satisfying, therefore encouraging repeat purchasing behaviour.

Growth so far has largely been due to innovations within the bakery and cereals and the beverage markets (which currently hold shares of 33.5% and 28.4% respectively). Beverages and cereals (the latter of which includes cereal bars) remain the most prolific sectors for weight management claims across the globe. This is largely due to the functionality of the products (ie their ability to ‘carry’ other ingredients well), as well as the fact that they are generally perceived by consumers as both convenient and healthy.

The ‘Future of the Weight Management Market’ report presents information on the trends which help to shape this industry, with a focus on major market product sectors such as beverages, dairy and snacks. The report also details the latest ingredients being utilised in the weight management sector. The report is available from the Publications Department at Leatherhead Food Research, priced at £585, with a discounted price of £450 available to Members of Leatherhead.

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PepsiCo Plans to Invest $140 Million in New Beverage Plant in Russia


Global soft drinks and snacks giant PepsiCo plans to invest $140m to build its tenth plant in Russia. The new plant will be constructed in the city of Azov, where the company recently completed a snacks plant.

Indra Nooyi, chairman and chief executive of PepsiCo.

Both plants in Azov are part of PepsiCo’s $1b investment programme in Russia, announced in 2009. In the previous ten years, PepsiCo invested $3b in Russia. Placing both plants on the same property will allow for more efficient logistics and leverage the advantages of production processes and technologies that save water and energy.

“Russia is one of our most exciting growth opportunities, and our $250m total investment in two plants in the Rostov region reflects our commitment to this key market,” says Indra Nooyi, chairman and chief executive of PepsiCo. “Our goal is to build a premier food and beverages company in Russia, and we are actively investing in manufacturing and logistics infrastructure to achieve that. Consistent with our ’Performance with Purpose’ vision, we also are broadening our portfolio by adding healthier products, implementing new environmental initiatives and taking steps to support the growth and development of our employees.”

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Kraft Foods Opens $14 Million Sugar Confectionery R&D Centre in Europe


Kraft Foods has opened a European Gum and Candy Research & Development Centre at Eysins in Switzerland. The $14m state-of-the-art facility will focus on innovation and new product development for many of Kraft Foods’ confectionery brands, including the world’s leading gum brand Trident and the world’s leading candy brand Halls, as well as other brands like Bassetts, Carambar, The Natural Confectionery Co, Trebor and V6.

Worth $23 billion annually, the global gum market has grown by almost a quarter since 2005, and is one of the fastest-growing categories within confectionery. Kraft Foods has a number of gum brands with leading positions in markets across Europe, such as Hollywood in France, Trident in Spain, Greece and Portugal, and Stimorol in Denmark and Switzerland.

The new centre will be home to a team of product and package developers and quality experts who are responsible for breakthrough gum and candy innovation, such as the new Fresh & Clean gum product which is currently launching in markets across Europe. As the European Centre for innovation and technology for gum and candy, the team based in Eysins will collaborate closely with the Kraft Foods Global Gum & Candy Centre of Excellence, based in New Jersey in the US, to drive innovation and new technologies that support the company’s European gum and candy business and global category growth platforms.

The Center in Eysins joins 14 other Kraft Foods R&D Centres supporting the company’s global businesses including beverages, biscuits, cheese, chocolate, coffee and gum and candy.

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Early Recovery in UK Food and Beverages to Boost M&A Activity


69% of senior executives at UK-based food and beverage producers expect M&A activity to increase in the next 12 months, according to a report by Grant Thornton UK LLP which indicates that the sector has recovered early from recession. 20% (10 of the 50 respondents) said that they were planning to broker a merger or acquisition in that period.

By 13th August 2010, only 13 M&A transactions with a total value of £113m had been recorded involving food and beverage targets. The deal value was low compared to 2009, when this sector accounted for 27 deals with a total value of £14.3b. However, the 2009 result was inflated by Kraft’s £13.7b takeover of Cadbury (adding Cadbury’s net debt to the purchase price).

“Food and beverage producers had to digest sharp increases in input prices in 2007 and 2008, leaving the survivors in good shape to bear the recession. Most producers are already targeting growth, while 43% of our respondents are still cutting costs,” comments Trefor Griffith, corporate finance director at Grant Thornton.

In terms of growth strategies for the next 12 months, 46% of respondents are considering expansion into new markets, compared to 66% who are considering new product launches.

“It is remarkable that not a single respondent to the food sector survey highlighted competition from foreign firms as a significant challenge and less than half of them said that the weakness of Sterling was bad for business. Successful British exports include ready meals to France, Indian sauces to Spain, cheeses to Japan and breakfast cereals to China,” he explains.

22% of respondents saw greater domestic competition as one of the biggest challenges facing their business. This compares to 32% who named reduced consumer spending (or spending on premium goods) as the biggest challenge.

In terms of prospects, 52% said that the increasing emphasis on health and wellness presented a significant opportunity. 25% identified the fair trade and free range markets as providing significant opportunities, while 23% said the same about green consumer and local produce.

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Change of Leadership at Campbell


Douglas Conant, will step down as chief executive of Campbell Soup Company next July, at the end of the company’s financial year. Denise Morrison, president of Campbell’s North American soup, sauces and beverages business, has been appointed executive vice president and chief operating Officer in anticipation of her election to succeed Douglas Conant as chief executive at the beginning of fiscal 2012.

In her new role, Denise Morrison will be responsible for leading all of the company’s global businesses. The businesses in the North America soup, sauces and beverages division, the international division and Pepperidge Farm will report directly to her. She will also oversee corporate strategy, research and development and global marketing services.

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Nestle to Target New Opportunity in Personalised Health Science Nutrition


Nestle is creating Nestle Health Science and the Nestle Institute of Health Sciences to pioneer a new industry between food and pharma. These two separate organisations will allow Nestle to develop the innovative area of personalised health science nutrition to prevent and treat health conditions such as diabetes, obesity, cardiovascular disease and Alzheimer’s disease, which are placing an unsustainable burden on the world’s healthcare systems.

Nestle Health Science, a wholly-owned subsidiary of Nestle, will become operational on 1st January 2011. The new company will be run at arm’s length from Nestle’s main food, beverages and nutrition activities, and incorporate the existing global Nestle HealthCare Nutrition business, which had a turnover of SFr1.6b in 2009. Nestle Health Science will also have access to external scientific and technological know-how through Nestle’s innovation network as well as a number of venture capital funds in which the group has interests.

The Nestle Institute of Health Sciences will be part of Nestle’s global R&D network. Nestle plans to invest hundreds of millions of Swiss francs over the next decade to build a world-class Institute of Health Sciences, which will conduct research in relevant areas of biomedical science to translate this knowledge into nutritional strategies to improve health and longevity. The Institute will be based in the multi-disciplinary scientific environment of the Swiss Federal Institute of Technology (EPFL) in Lausanne, where Nestle is already involved in two life science initiatives.

“The combination of health economics, changing demographics and advances in health science show that our existing healthcare systems, which focus on treating sick people, are not sustainable and need redesigning. Nestle has the expertise, the science, the resources and the organisation to play a major role in seeking alternative solutions. Personalised health science nutrition is about finding efficient and cost effective ways to prevent and treat acute and chronic diseases in the 21st century,” explains Peter Brabeck-Letmathe, chairman of Nestle.

Paul Bulcke, chief executive of Nestle.

“The creation of Nestle Health Science and the Nestle Institute of Health Sciences is the best way to focus our attention and organise our unique capabilities and competencies to seize this promising business opportunity. The new set-up will give us a pioneering and leading role in this entirely new industry, while at the same time allowing us to keep the necessary focus on Nestle’s extremely important food, beverages and nutrition business,” says Paul Bulcke, chief executive of Nestle.

Nestle first entered healthcare nutrition in 1986. Over the last three years, it has made a number of strategic acquisitions in this area such as Novartis Medical Nutrition and Vitaflo. Nestle HealthCare Nutrition, currently an integral part of Nestle Nutrition, has a long established reputation as a science-based organisation and has also been setting the trend for personalised nutrition and related services in recent years.

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Coca-Cola Hellenic Opens New €130m Irish Facility


Coca-Cola Hellenic Bottling Company’s Irish business has officially opened a new energy efficient bottling plant, computerised warehouse, and community-focused visitors centre at Knockmore Hill, County Antrim, Northern Ireland. The €130 million facility employs 600 people and has the capacity to produce a wide range of non-alcoholic beverages for delivery throughout the entire island of Ireland.

The facility operates seven filling lines – four for PET bottles, one for glass, one for cans, and one for post-mix. There is a PET moulding unit with six blow moulders capable of handling 750,000 bottles per day.

In addition, the complex features a fully automated warehouse which not only provides efficient storage and retrieval, but also gives better protection to containers and pallets, improves handling times and ultimately is designed to deliver a ‘perfect’ pallet to customers, and a high quality beverage into the hands of the end consumer.

A key component of the new bottling plant is a combined heat and power (CHP) system, which has been constructed in partnership with ContourGlobal, a leading international company specialising in the development of efficient energy installations.

The CHP plant at Knockmore Hill will cut CO2 emissions at the plant by up to 66% while supplying excess clean electricity to the local power grid. The plant is the fourth to be officially opened and another 11 are under development by ContourGlobal, as part of Coca-Cola Hellenic’s commitment to combating climate change

“Our aim is to cut CO2 emissions by an average of 20% across all 80 of our bottling plants,” says Doros Constantinou, chief executive of Coca-Cola Hellenic.

Coca-Cola Hellenic is one of the world’s largest bottlers of products of The Coca-Cola Company with sales of more than 2 billion unit cases. It has broad geographic reach with operations in 28 countries serving a population of approximately 560 million people.

CAPTION:

Pictured at the opening of facility at Knockmore Hill are (left to right): Northern Ireland Enterprise Minister Arlene Foster; First Minister Peter Robinson; Marcel Martin, general manager of Coca-Cola Hellenic for the island of Ireland; Deputy First Minister Martin McGuinness; and chief executive of Coca Cola Hellenic Bottling Company, Doras Constantinou.

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First Half Improvement at Wimm-Bill-Dann Foods


Russian dairy, food and beverages group Wimm-Bill-Dann Foods increased net income by 7.1% year-on-year to US$69.5m on revenue up 17.1% to US$1.26b for the first six months ended June 30th 2010. EBITDA rose marginally to US$159.7m from US$158.3m in the same period of 2009.

The revenue increase was driven by volume growth in the group’s dairy, beverages and baby food segments and favorable pricing across all segments. Group revenue in rubles increased 6.6% versus the same period a year ago. However, gross margin declined 400 basis points to 29.9% as a result of the continued pressure of raw milk costs in the first six months of 2010.

Tony Maher, chief executive of Wimm-Bill-Dann Foods.

“Our performance continues to be strong, with significant improvements in market share across our dairy, beverages, and baby food segments, as demand resturns back to levels we have not seen since before the global economic crisis,” says Tony Maher, chief executive of Wimm-Bill-Dann Foods. “However, we continue to face the challenges in raw milk procurement, which adversely impacted our gross margins in the dairy segment in the second quarter. Despite some temporary input difficulties, we are favorably positioned across our segments to achieve our objective of expanding profitability through efficiency gains and a greater share in high value categories.”

Wimm-Bill-Dann Foods is the market leader in dairy products and children’s food in Russia and one of the leading players in the market for non-alcoholic drinks in Russia and the CIS. The group operates more than 35 production facilities in Russia, Ukraine and Central Asia.

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Strong Profits Growth at Refocusing Sara Lee


Despite a 0.8% drop in net sales to $10.8b, reflecting lower volume sales and prices, Sara Lee increased operating income by 88.6% to $918m in its 2010 financial year, driven by improved profits from across all of the US-based food and beverages group’s five continuing business segments. In particular, the North American Retail and International Beverage segments showed impressive results, while the North American Foodservice segment increased operating income in a challenging environment. Group net income jumped 39% to $506m.

Sare Lee’s discontinued International Household and Body Care businesses also reported strong fiscal 2010 results.

Sara Lee made substantial progress toward divesting its International Household and Body Care businesses in its 2010 financial year. The company announced and closed transactions for the disposal of the air care business to Procter & Gamble for Eur320m (closed in early fiscal 2011) and the Indian insecticides business to Godrej for Eur185m.

Sare Lee is working on the sale of its global body care business to Unilever for Eur1.275b and on the disposal of the non-Indian insecticides business to SC Johnson for Eur153.5m. Both proposed transactions are expected to close in calendar year 2010.

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Strong First Half From Nestle


Benefiting from deeper penetration in emerging markets of the world, the continued success of its premium products in both developing and developed markets and extra marketing investment, Nestle has increased net profit by 7.5% to SFr5.5b (Eur4.0b) on group sales up by 5.9% to SFr55.3b for the first half of 2010. Organic sales growth was 6.1%, including real internal growth of 4.6%.

The group’s EBIT margin increased by 100 basis points to 15.1%, or by 70 basis points on a like-for-like basis in constant currencies. The ongoing efficiency drive under the Nestle Continuous Excellence programme contributed to the improvement in EBIT margin, even after increased investment in the business to improve long-term performance.

Sales from Nestle’s Food and Beverages business increased by 5.6% to SFr51.0b with organic growth of 5.7% and real internal growth of 4.2%. Food and Beverages’ EBIT was SFr6.7b as the margin improved by 60 basis points to 13.0%, reported and in constant currencies. The higher EBIT margin was achieved while increasing the Food and Beverages consumer-facing marketing spend by over 14% in constant currencies.

Paul Bulcke, chief executive of Nestle.

Within Europe, Nestle exhibited organic sales growth of 2.2% and real internal growth of 1.3% as sales reached SFr10.7b and the EBIT margin rose by 10 basis points to 11.9%. In Western Europe, Nestle managed positive real internal growth in all key markets as it concentrated on increasing distribution, improving customer service and accelerating innovation and renovation. In Southern Europe, positive growth was seen in Italy and the Iberian region and, in Eastern Europe, Poland and the Ukraine were strong performers. In Russia, Nestle experienced good performances in many categories although ice cream and confectionery remained soft.

“The group’s very successful first-half performance is due to the excellent execution of our proven strategies in all parts of the world, covering the full range from premium brands to value-priced offerings, combined with the ongoing successful implementation of Nestle Continuous Excellence,” says Paul Bulcke, chief executive of Nestle.

“We have increased investment in our brands, people and capabilities and have prepared the company for a more challenging second half, which allows me to reconfirm our earlier full-year guidance for Food and Beverages: organic growth of around 5% combined with an increase in EBIT margin in constant currencies.”

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Danone to Dispose of Stake in Wimm-Bill-Dann Foods


Danone has agreed to sell its 18.4% stake in Wimm-Bill-Dann Foods to the Russian food group for a total consideration of $470m. The agreement follows the recent announcement of the joint-venture between Danone and Unimilk in the CIS region. The deal is conditional upon Danone receiving the necessary regulatory approvals for the merger of its fresh dairy products operations in the CIS region with Unimilk.

Wimm-Bill-Dann will fund the transaction from existing resources and will not require additional financing. “This agreement represents the amicable conclusion of Danone’s investment in our company, an investment Danone has held since our IPO in February 2002. This announcement and the outright purchase of our own shares reflect our confidence in the fundamentals of the business and our strategy for the future,” says Tony Maher, chief executive of Wimm-Bill-Dann Foods.

Tony Maher, chief executive of Wimm-Bill-Dann Foods.

Founded in 1992, Moscow-based Wimm-Bill-Dann Foods has grown rapidly to become the largest producer of dairy, baby food and beverage products in its native Russia and the CIS. The group employs over 16,000 people across 37 manufacturing facilities in Russia, Ukraine, Kyrgyzstan, Uzbekistan and Georgia. In 2005, Wimm-Bill-Dann became the first Russian dairy producer to receive approval from the European Commission to export its products into the European Union.

Since 2002, Wimm-Bill-Dann Foods has been expanding its geographical footprint by acquiring successful businesses in Russia and the CIS, and investing heavily in modernising its production facilities. Its strategy is to produce its core products in the regions where they are sold.

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Unilever Predicts Continued Slow Economic Growth


Unilever has reported a 35% increase in net profit to Eur2.21b on turnover ahead by 9.7% to Eur21.89b with underlying sales growth of 3.8% for the first half of 2010. Group operating profit rose by 20% to Eur3.07b.

Although prices were down by 2.6% during the first half, this was offset by underlying volume growth of 6.6%. The underlying operating margin advanced 30bps with continuing strong gross margins offset by significant investment in advertising and promotional expenditure, up 180bps.

Market growth in developed economies remains depressed whilst emerging market growth remains strong. Within its Western European region, markets were difficult, particularly in southern European countries such as Greece, Spain and, to a lesser extent, Italy.

Paul Pulman, chief executive of Unilever.

Unilever’s global ice cream and beverages business increased underlying sales growth by 5.1% in the first half while savoury, dressings and spreads grew at a less impressive 0.3%.

“We continue to operate under the assumption of slow economic growth, particularly in developed markets where consumer confidence remains fragile. We do not expect competitive pressures to ease and our ability to increase prices will remain constrained despite rising commodity costs in the second half. We still expect underlying price growth to turn positive towards the end of the year,” says Paul Pulman, chief executive of Unilever. “Notwithstanding this difficult environment and comparators which get tougher as the year progresses, the results confirm again that our strategy to focus on the consumer and to accelerate growth is working. Our priority remains to drive profitable volume growth and strong cash flow along with steady and sustainable improvement in operating margin for the year as a whole.”

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PureCircle Wins Major Global Contracts


PureCircle, the world’s leading producer of high purity stevia products, has won a number of new contracts with major food and beverage companies. In addition to its existing global supply contracts with PepsiCo, Merisant and Firmenich, PureCircle has secured global multi-year contracts with customers including Danone, Unilever, Bimbo Bakeries, Dean Foods and Kerry Ingredients.

“We have successfully diversified our client base from one exclusive customer to a number of major stratigic global F&B clients and over 100 regional and local invoicing customers around the world. Although the decision to go directly to the market has had short term impact on our sales in the early stages of the development of the industry, we are absolutely confident that it was the right decision for long term growth of the company,” says Magomet Malsagov, chief executive of PureCircle. “The breadth and depth of the client base we are developing across many food and beverage categories reflects our leadership in the fast developing stevia market.”

The PureCircle Group develops and manufactures natural food ingredients for supply to the global food and beverage industry. The current focus is exclusively in the production and sale of extracted natural high intensity sweetener (HIS).

The PureCircle Group’s objective is to take advantage of worldwide trends towards healthier diets and concerns over the use of non-natural ingredients in foods and beverages by selling natural HIS to food and beverage manufacturers.

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Cott Extends Private Label Beverages Leadership With $500m Acquisition


Cott Corporation, the world’s largest retailer brand soft drinks company, is acquiring Cliffstar Corporation, the leading private label manufacturer of shelf stable juices, for a cash consideration of $500m.

Founded in 1970, New York-based Cliffstar is one of the leading suppliers of private label beverages and the largest private label producer of apple juice, grape juice, cranberry juice and juice-blends in North America. With revenues of $654m, Cliffstar operates eleven facilities in the US and has approximately 1,200 employees.

Cott has identified cost synergies of $20m on an annualised basis from the deal, of which $14m are expected to be realised in 2011.

“As the clear leader in private label shelf-stable juice, Cliffstar is an ideal partner for Cott as we strengthen our position in private label beverages,” says Jerry Fowden, chief executive of Cott. “A combination with Cliffstar expands Cott’s product portfolio and manufacturing capabilities, enhances our customer offering and growth prospects, and improves our strategic platform for the future. Combined with Cliffstar, Cott will be a more diversified company with long-term advantages for our shareowners and retailer partners.”

The combined business has pro forma annual revenue of $1.8b in North America and $2.3b globally with adjusted EBITDA of $246m.

Employing about 2,800 people, Cott operates bottling facilities in the US, Canada, the UK and Mexico. Cott markets non-alcoholic beverage concentrates in over 50 countries around the world.

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Sara Lee Refocusing Continues With €320m Disposal


US-based food, household and body care products group Sara Lee has completed the sale of its air care operation to Procter & Gamble for Eur320m. The disposal is part of the divesture of Sara Lee’s household and body care business as it seeks to refocus on its global food and beverage activities.

Brenda Barnes, chairman and chief executive of Sara Lee.

To date, Sara Lee has completed the sale of its 51% stake in its Godrej Sara Lee joint venture to Godrej Consumer Products for a total consideration of Eur185m. In addition, Sara Lee expects to close the sales of its global body care and European detergents businesses to Unilever and its remaining insecticides business to SC Johnson by the end of 2010.

This will leave Sara Lee focused on five businesses – North American Fresh Bakery, North American Retail, North American Foodservice, International Beverage and International Bakery.

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Wimm-Bill-Dann Foods Completes Bond Placement


Wimm-Bill-Dann Foods, the largest manufacturer of dairy products and a leading producer of juices and beverages in Russia and the CIS, has completed the placement of two bond issues on the Moscow Interbank Stock Exchange, raising a total of10b rubles ($320m at the exchange rate on July1st, 2010).

Tony Maher, chief executive of Wimm-Bill-Dann Foods.

“Such strong demand for our bonds from foreign and domestic investors allowed us to increase the size of the placement from 5 to 10 billion rubles,” says Tony Maher, chief executive of Wimm-Bill-Dann Foods. “This is a striking endorsement by the investment community of our sound fundamentals, business model and strong growth prospects. The issuance of ruble bonds provides us with additional capital for future growth and further optimizes our debt portfolio.”

The two bond issues, with a total nominal value of10b rubles, have a maturity of three years, with coupons paid every six months.

Founded in 1992, Wimm-Bill-Dann Foods operates 37 manufacturing facilities in Russia, Ukraine, Kyrgyzstan, Uzbekistan and Georgia with over 16,000 employees. In 2005, Wimm-Bill-Dann became the first Russian dairy producer to receive approval from the European Commission to export its products into the European Union.

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