Tag Archive | "US"

Greencore Makes Further Platform Acquisition in the US


Greencore has further strengthened its business in the US with the acquisition of  HC Schau & Son, a fresh food manufacturer with facilities in Chicago, Illinois and Jacksonville, Florida. The acquisition, which is worth up to $19 million, will form a critical part of the supply network for a significant new multi-regional contract gain in Food to Go with a national food service chain.

Schau is a producer of fresh sandwiches and sushi as well as fresh entrees and other ready to eat items, sold through both the convenience store and grocery retail channels. It has an established modern facility in Chicago and a new high quality start-up facility in Jacksonville. For the year ended December 2011, it had revenues of $32 million (£20.5 million).

The Acquisition provides the capability and capacity to drive growth in the US, both with existing customers and with the recent new business win. It will build on the acquisition of Marketfare Foods in April 2012 by adding scale with 7-Eleven, to whom Schau is a long-term supplier in the Chicago region. In addition, Greencore has put in place a multi-year partnership with the new customer to supply its stores with approximately $50 million of Food to Go products on the east coast and in the mid-west from four of Greencore’s facilities. The delivery of this new business will be phased in between September 2012 and March 2013.

Under the terms of the Acquisition, Greencore will pay an upfront cash consideration of $13.0 million plus deferred cash consideration of $4.3 million. An additional cash amount of up to $2.0 million will be payable dependent on certain performance conditions. The transaction will be funded from existing debt facilities and will have a minimal impact on the Greencore’s leverage. It is expected to be modestly earnings accretive from the first year of ownership. Integration and transaction expenses are estimated at $2.5 million and will be treated as an exceptional item.

Patrick Coveney, chief executive of Greencore, says: “Schau, along with Marketfare, will allow us to take a strong step forward in executing the next stage of our US strategy. Greencore now has a Food to Go platform in the US that will not only enable us to better serve our existing customers, but also to support what is a significant and exciting new business opportunity.”

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Greencore Strengthens US Foods Business


Greencore Group, one of the leading convenience food manufacturers in the UK and Ireland, is strengthening its US business with the acquisition of Marketfare Foods for $36.0 million (£22.6 million). Marketfare is a leading manufacturer of food to go products for convenience and small stores in the US. Its principal customer is 7-Eleven, which it has partnered for over 20 years, and it is the largest single supplier of Fresh to Go and 7-Smart store-branded sandwiches, servicing over 1100 7-Eleven stores in the Mid-Atlantic region. In addition, it is an exclusive manufacturer of Casa Buena Cheese and Chili sauces for the entire 7-Eleven chain in the US and Canada.

For the year ended 27 January 2012, revenue for Marketfare was $65 million and EBITDA was $5.7 million. Gross assets at 27 January 2012 were $20.1 million. The transaction is being funded from existing debt facilities. It is expected to be modestly earnings accretive from the first financial year of ownership. Integration and transaction expenses are estimated at $3.5 million and will be treated as an exceptional item.

Patrick Coveney, chief executive of Greencore, comments: “The acquisition of Marketfare represents an excellent opportunity for us to further develop our food to go business in the US, building on the successful acquisition of On a Roll in December 2010. It builds additional scale with 7-Eleven, provides new competencies for us in the fast growing food to go category and extends our geographic footprint principally along the Eastern seaboard. The new product capability and geographic expansion provide the opportunity to expand further with our existing customers; the acquisition represents the next step in our strategy to build a business of real scale in the US.”

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PepsiCo and Theo Muller to Build $206 Million Yogurt Factory


PepsiCo, the world’s second largest snacks and beverages company, and Theo Muller, Germany’s largest privately owned dairy business, have chosen New York as the site for their first yogurt production facility in the US. Through their joint venture, Wave, the companies will invest $206 million (Eur153 million) and create 186 new manufacturing and support jobs to operate the new state-of-the-art facility in Batavia.

Wave considered other locations both in and outside of New York State for the facility. After a thorough evaluation, including an assessment of access to dairy resources, water supply and distribution routes to key markets, the company chose Batavia. While the facility is being developed over two years, Wave may import Muller products in order to establish a foothold in the fast-growing US yogurt business.

Wave’s investment continues a strong recent trend of major yogurt producers opening manufacturing facilities in New York. The state currently has 29 yogurt plants, which employ more than 2,000 people and produced a total of 530 million pounds of yogurt in 2011—a 43% increase from 2010 and more than double 2008 levels.

New York State is the US leader in the production of the highly popular Greek-style yogurt. Producing Greek yogurt requires approximately three times the amount of milk than traditional yogurt, making the industry a major economic driver for dairy farmers across New York State. In 2011, more than 1.166 billion pounds of milk was used for yogurt production. This is comparable to the milk production of 500 average-size dairy farms inNew York State (115 cows/farm).

The joint venture with Muller reflects PepsiCo’s ambitions to expand in dairy. In 2010, the beverages and snacks manufacturer acquired Russian dairy and fruit juice company Wimm-Bill-Dann for $5.4 billion. PepsiCo also established a joint venture with Almarai, the leading dairy company in the Middle East, in 2009.

Muller is the leader in the UK yogurt market through its Muller Corner brand.

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SABMiller and Molson Coors Move into Fast Growing US Cider Market


SABMiller and Molson Coors, through their MillerCoors brewing joint venture in the US, have moved into the cider market, the American beer industry’s fastest-growing category. Tenth and Blake Beer Company, MillerCoors’ craft beer and import division, has acquired Crispin Cider Company, the third largest producer of cider in the US.

Crispin Cider Company produces European-style natural hard apple ciders using fermented unpasteurized fresh-pressed apple juice. The company also imports a classic English Dry Cider, Crispin Browns Lane.

SABMiller and Molson Coors formed their US joint venture, MillerCoors, in 2008. MillerCoors created Tenth and Blake Beer Company in 2010 to be a leader in the crafts and import segment.

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Britvic Expands US Distribution of Fruit Shoot Brand


Britvic has signed agreements with three of the top four bottlers of Pepsi in the United States to expand the distribution of its leading soft drinks brand, Fruit Shoot. The agreements will see the manufacture of Fruit Shoot in the US for the first time, starting in Spring 2012.

 

Since its launch in the UK over ten years ago Fruit Shoot has gone on to become a leading brand in both Britain and Ireland and has been launched this year in France under the Teisseire brand. It is also sold in Australia through an agreement with Bickford’s.

 

Fruit Shoot was first introduced to the US in 2008 through a distribution agreement with Buffalo Rock, the fourth largest Pepsi bottler in the States, and the new agreements reflect the success of the brand to date. The new agreements mean Britvic now has distribution agreements with all four top bottlers.

 

Britvic has just entered a long term manufacturing and distribution agreement with Pepsi Bottling Ventures, a joint venture company owned by Suntory and PepsiCo and the second largest US Pepsi bottler, which will see Fruit Shoot being manufactured in the USA for the first time in North Carolina from May 2012. Britvic will supply proprietry beverage compounds from its manufacturing facilities in Dublin, Ireland, operated by Britvic Worldwide Brands.

 

A distribution agreement with Gross & Jarson, the third largest and privately owned US Pepsi bottler, will see Fruit Shoot being distributed in Kentucky and Ohio.

 

A distribution agreement has also been signed with Pepsi Beverages Company, the wholly owned subsidiary of PepsiCo, responsible for the majority of Pepsi bottling and distribution in the US, and which is now distributing Fruit Shoot in Florida and Georgia.

 

These agreements mark a new phase in the development of the Fruit Shoot brand in the USA, with local manufacturing allowing more ambitious expansion than has previously been possible. As a result, Fruit Shoot will now be available to consumers in more than 10,000 convenience stores, independent grocery stores and food service outlets in six states in the Eastern USA – Alabama, North Carolina, South Carolina, Georgia, Florida and Kentucky.

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C&C Group Acquires Number Two US Cider Brand


UK and Irish beverages producer C&C Group has acquired Hornsby’s, the number two domestic US cider brand, from E & J Gallo Winery, for a cash consideration of up to €20 million ($27.5 million). The deal makes C&C the second ranked cider company in the US with an estimated 20% share of a rapidly growing category. The US long alcohol drinks (LAD) market is one of the largest in the world with significant growth potential for cider – cider’s current share of LAD is estimated to be 0.2%.

 

Hornsby’s complements C&C’s Magners Irish cider brand in the US market. Magners is primarily an on-trade and East Coast brand, whereas Hornsby’s is primarily an off-trade and West Coast brand. C&C will also benefit from a broader portfolio through the combination of a US domestic cider brand with strong brand equity and a premium imported craft Irish cider brand. The deal also presents a significant opportunity for C&C to invest in and grow Hornsby’s volumes in the US and the potential to develop export led growth of the brand.

 

In the year ended 31st December 2010, Hornsby’s volumes were 61,000 hectolitres and net revenue was $11.7 million. The business is currently delivering low single-digit revenue and volume growth. Based on year to date performance, the business is expected to generate a contribution after marketing of Eur3.6 million in the 12 months to December 2011 before estimated overheads of approximately Eur1.4 million.

 

Hornsby’s is produced and packaged at Gallo’s winery in Modesto, California. The business does not have its own dedicated sales and marketing resource and as a result, Hornsby’s is managed within the context of the entire Gallo portfolio of brands. Gallo is the largest winery in the world.

 

According to Stephen Glancey, C&C’s chief executive designate, the acquisition of Hornsby’s “represents a significant step towards the development of the group’s international, cider-led strategy.” He adds: “The Transaction more than doubles our volume in a growing market; broadens the scope of our cider portfolio; and, presents significant opportunity to develop the Hornsby’s brand throughout North America.”

 

C&C estimates that annual US sales of cider are currently 400,000 to 500,000 hectolitres. US cider category volumes are growing at approximately 20% per annum.

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IDB Acquires US Cheese Ingredients Business


The Irish Dairy Board has strengthened its presence in the US with the acquisition of Thiel Cheese & Ingredients for an undisclosed sum. Thiel is a well established and leading cheese ingredients solutions company based in Hilbert, Wisconsin. With annual sales of about $50 million, the company custom formulates and produces cheese-based ingredient solutions primarily for sale to US-based food manufacturers. Thiel operates from modern state-of-the-art facilities in Hilbert and employs 66 people all of whom will remain with the company.

 

The acquisition complements and strengthens the IDB’s existing added value cheese ingredients business in the US. Thiel is an excellent fit as part of the IDB’s North American ingredients growth strategy. The acquisition will help to achieve greater scale in the value added cheese ingredients market, add new customer relationships, and provides further technology, innovation and new product applications for IDB.

 

The acquisition is being funded through IDB’s existing debt facilities. The business is being acquired on a debt free basis.

 

“We are excited about this strategic acquisition in the USA, which will transform our value added cheese ingredients business. It is an excellent and complementary fit to our existing growing USA ingredients business,” commentsKevin Lane, chief executive of IDB. “The acquisition of a profitable and well established company accelerates our growth strategy in line with our five year plans and our commitment to reinvest the divested funds into core high growth dairy businesses. This acquisition is inline with our strategic objectives of building routes to market and routes to value for dairy products.”

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Anheuser-Busch InBev to Invest $1 Billion in US Beer Business


Anheuser-Busch InBev plans to invest more than $1 billion in its breweries  and other facilities in the US. The capital expenditure programme includes resources spent or committed in 2011 toward projects to further modernise brewing processes, upgrade systems to reduce greenhouse gas emissions, and install equipment for new products and innovations, among other items, with additional allocations being made for projects through 2014.

 

“Our beer brands are the favorites of millions of US adults, and supporting their growth requires an ongoing commitment to quality, innovation and technologically advanced operations,” says Luiz Edmond, president of Anheuser-Busch InBev North America.

 

Future investments will continue Anheuser-Busch’s long-standing commitment to continuous process improvements in its operations. Projects launched since 2010 include: $60 million invested in the company’s historic St. Louis brewery for various improvements; $34 million for upgrades at the Houston brewery, including a project that allows expanded production by an additional 500,000 barrels per year; $34 million to introduce packaging and brand innovation in Cartersville; and $30 million in capital investments at the Los Angeles brewery for various projects.

 

In addition to its breweries, Anheuser-Busch is investing in its agricultural operations and other facilities. For example, earlier this year the company announced a $40 million investment in its Longhorn Glass facility in Houston. The project involved a re-bricking of the very heart of the plant – its furnace – and expanded production capacity with the introduction of one of the fastest glass-forming machines in the world.

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Dr Oetker to Build North American Pizza Factory


Dr Oetker is to construct its first frozen pizza factory in North America. The German-based frozen foods group plans to build the factory in Ontario, Canada, at a cost of $50m – its largest investment outside Europe.

When completed, the new factory will produce 50m frozen pizzas a year for both the Canadian and US markets.

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PepsiCo Launches European Search for Emerging Communications and Technology Companies


PepsiCo has announced an open call for digital entrepreneurs across Europe to apply to take part in ‘PepsiCo10’, an innovation incubator program designed to discover and support emerging technology companies whose ideas and solutions can be applied to drive business value for the global soft drinks and snacks group.

Launched successfully in the United States last June, PepsiCo has now expanded PepsiCo10 to Europe. The goal of the PepsiCo10 Europe program is to identify up to 10 of the most promising companies and give them the opportunity to work with PepsiCo in the UK to deliver pilots of their technologies, whilst receiving the support and guidance from industry-leading mentors.

PepsiCo is looking to identify businesses with ‘ready-to-go’ technologies across five categories; social media; mobile marketing; place based technology; digital video; and gaming or learning platforms. Highland Capital Partners, OMD and Weber Shandwick will continue to serve as advisors to PepsiCo throughout the program.

Selected applicants will undergo a series of rigorous assessments, and a subset will be invited to participate in a second round and submit video presentations, which will be judged by senior brand representatives from PepsiCo brands Pepsi, Walkers, Tropicana and Quaker. Companies’ ideas and solutions will be evaluated on their potential ability to impact PepsiCo’s business and to deliver on ‘Performance with Purpose’, the company’s commitment to finding innovative ways to minimise its impact on the environment; to provide a great workplace for its associates; and to respect, support and invest in the local communities where it operates.  Prospective applicants can find out more about the program and apply online until July 15, 2011 at www.pepsico10.com.

Near completion, PepsiCo10’s pilot programs in the US have resulted in the execution of successful digital marketing activations across US brands. These winning technologies include: Tongal, a video sharing platform that is currently sourcing animation video for the Brisk Tea brand; BreakOut Band, a collaboration music platform that worked with Pepsi MAX to execute at the 2011 South by Southwest Interactive and Music conference; and Evil Genius Designs, a mobile gaming platform with which PepsiCo has worked to develop a virtual reality video game featuring products across the PepsiCo portfolio.

“There is a huge appetite amongst consumers for new and exciting social media technologies and for us as a business, digital is a dynamic and increasingly important area for innovation,” points out Ian Ellington, general manager for Walkers Crisps, one of the brands which will benefit from the PepsiCo10 technologies. “We’ve already used digital and social media to great success in our past campaigns, such as Walkers’ Do Us A Flavour campaign and we now look forward to harnessing the emerging tech and start-up landscape and cultivating the next generation of digital pioneers.”

CAPTION:

PepsiCo10 winner BreakoutBand brought an interactive music beat maker to the Pepsi MAX Lot at SXSW Interactive 2011, giving music fans a chance to mix their own beats on-site, form virtual bands and create original songs via their mobile phones.

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Nestle’s Skinny Cow Ice Cream Brand Extended into Confectionery


Nestle’s Skinny Cow low-fat frozen snacks brand has launched its first ever confectionery range in the US. The Skinny Cow brand – famous with its majority female fan base for its indulgent but low-calorie ice cream sandwiches, cones, cups and bars – is extending into the confectionery category with two new products offering four different flavours.

Skinny Cow Dreamy Clusters are bite-sized treats which contain 120 calories per pouch, while Skinny Cow Heavenly Crisp bars contain 110 calories per bar. The new products continue the Skinny Cow tradition of offering ‘light’ yet indulgent treats. Indeed, confectionery is a natural extension for Skinny Cow. All four Skinny Cow confectionery products are currently available nationwide in the US, as single candy bars or pouches, or in take-home boxes.

Founded in Jersey under the name Silhouette in 1991, and featuring the Skinny Cow logo, the brand’s low calorie ice cream sandwiches were an instant hit in the small shops and markets of Manhattan, New York. In 2004, it was acquired by Nestle Dreyer’s Ice Cream and re-launched as Skinny Cow. Skinny Cow ice cream has enjoyed steady growth every year since its acquisition by Dreyer’s.

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Nestle Waters Expands Portfolio


Nestle Waters is expanding its portfolio of bottled water to include high quality iced teas, lemonades and juices through acquisition. Nestle Waters North America is acquiring the Sweet Leaf Tea Company, including its Sweet Leaf and Tradewinds beverage brands. The acquisition – which remains subject to regulatory approval and satisfaction of other customary closing conditions – follows an initial investment by Nestle Waters in the Sweet Leaf brand in March 2009.

Founded in 1998, the Sweet Leaf Tea Company, which is based in Austin, Texas, is known for its high quality teas and creative consumer communications. Sweet Leaf naturally sweetened products are made with pure cane sugar and premium tea leaves and have been certified organic by the United States Department of Agriculture (USDA).

The Tradewinds brand, founded in 1993, offers authentic, all-natural, brewed iced teas and tropical fruit juice drinks. With combined sales totalling more than $53m in 2010, the two brands’ growth will continue to be managed by the Sweet Leaf Tea Company’s existing staff.

The acquisition will bring Nestle Waters’ increased capabilities to Sweet Leaf Tea Company’s operations, allowing it to make Sweet Leaf and Tradewinds beverages available to more people across the US.

Nestle Waters North America is the leading bottled water company in the US, with sales topping $4b in 2010. In the US, the company produces six regional spring water brands; one nationally distributed purified bottled water named Nestle Pure Life; and three international bottled water brands. Worldwide, Nestle Waters has 64 brands, and operates 97 factories in 36 countries.

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Diamond Foods Bags Pringles in $2.4 Billion Deal


US-based snacks group Diamond Foods is acquiring the Pringles business from Procter & Gamble in a deal worth $2.35b. Pringles is the world’s largest potato crisp brand with sales in over 140 countries and manufacturing operations in the US, Europe and Asia. The brand has been built over 45 years with a combination of proprietary products, unique package design and significant advertising investment.

Pringles will join Diamond Foods’ portfolio of brands, which includes Diamond of California and Emerald nuts, Pop Secret microwave popcorn and Kettle potato chips, creating a premium snack focused company with total revenues of approximately $2.4b. Diamond acquired the Kettle Foods businesses in both the US and the UK from private equity group Lion Capital for $615m in cash last year.

The addition of Pringles will more than triple the size of Diamond’s snack business and leverage its sales and distribution infrastructure through a more than doubling of snack sales in the US and UK, which are Pringles’ two largest markets.

The deal will also allow Diamond to gain a broader global manufacturing and supply chain platform, with access into key growth markets around the world, including Asia, Latin America and Central Europe. International sales will account for approximately 49% of the enlarged Diamond’s revenues on a pro forma basis.

Diamond has a history of building, acquiring and developing brands through product and package innovation, efficient distribution and brand investment. The company’s total revenues have doubled and earnings per share have grown more than four-fold in the past five years.

“Pringles is an iconic, billion dollar snack brand with significant global manufacturing and supply chain infrastructure,” says Michael Mendes, chairman, president and chief executive of Diamond Foods. “Our plan is to build upon the brand equity Pringles has established in over 140 countries. This strategic combination will create an independent, global leader in the snack industry with a focus on quality and innovative products. Not only is this combination immediately accretive, it also creates a platform that we believe will allow us to build shareholder value for years to come.”

Under the terms of a split-merge transaction, P&G shareholders can elect to exchange P&G shares for shares of Diamond. The value of the deal is $2.35b, comprising $1.5b in Diamond common stock for approximately 57% of the combined company, and the assumption of $850m of Pringles debt. Diamond’s existing shareholders would continue to own approximately 43% of the combined company.

Diamond expects to incur one-time costs of approximately $100m related to the transaction over the next two years. P&G also will provide Diamond transition services for up to 12 months after closing.

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US Food and Drug Administration Publishes Import Refusal Data


The United States Food and Drug Administration (FDA) recently published a list of every foreign manufacturer that has had a shipment refused entry to the US since October 2001. In the past, FDA listed Import Refusals monthly on its website. The ‘Import Refusals’ page of FDA’s site was ‘out of commission’ due to technical problems for several months – until recently.

Now that FDA’s Import Refusal Report is once again operating, Benjamin England, founder of FDA Imports.com, a food and drug regulatory consulting firm, says that “Many foreign manufacturers will soon be facing potential enforcement action from their domestic regulatory bodies, as well as public and competitor scrutiny, concerning their products.”

FDA’s new publication of its FDA Refusals data is functioning more efficiently than ever before. Now the Import Refusal Report publicises cumulative refusal data since October 2001. The purpose for publishing FDA Refusal of Admission data is to “provide the public with information on products that have been found to appear in violation of the Act,” according to FDA. “While these manufacturers’ initial concern may be the extent to which the FDA Refusal Report affects their consumers’ image of their company,” notes Benjamin England, “there is a far greater concern to address and that’s the foreign manufacturer’s local government.”

For example, the China Inspection and Quarantine (“CIQ”) agency, which regulates and reviews the safety of food imports and issues inspection certificates and export permits, has already started sending letters to several Chinese manufacturers recently listed on FDA’s Import Refusal website page. In these letters, CIQ has been asking for an explanation about FDA Refusals of Admission of their products. Documenting what occurred can take some time and definitely money.

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Robust 2010 Performance by Heineken


Helped by the integration of its FEMSA acquisition in Latin America and continued growth of its flagship brand, Heineken increased net profit by 41% to Eur1.44b for 2010 on revenue up 9.7% to Eur16.13b. On an organic basis, net profit (beia) rose by 19.7%, driven by solid EBIT (beia) growth and lower interest costs, but consolidated beer volume and revenue were down by 3.1% and 2.2% respectively.

During the year, Heineken successfully completed the integration of the beer operations of FEMSA. On a pro forma basis, EBIT (beia) of these operations increased 44% to Eur397m and pre-tax cost synergies of Eur42m have already been realised. Heineken’s Total Cost Management (TCM) programme delivered Eur280m pre-tax savings in 2010.

Jean Francois van Boxmeer, chairman and chief executive of Heineken.

“Heineken delivered a robust performance, generating double-digit organic net profit growth for the fifth consecutive year. We achieved this against a backdrop of an improving yet still challenging economic environment in a number of our key markets. At the same time, we have made significant investments in our platform for future growth. The most transformational event being the acquisition of the beer operations of FEMSA which provide us with significant new opportunities in three of the four largest profit pools in the global beer market: Mexico, Brazil and the USA,” comments Jean Francois van Boxmeer, chairman and chief executive.

He continues: “I am particularly pleased that the Heineken brand has once again outperformed our broader brand portfolio, the overall beer market and the international premium segment as a whole. We will continue to invest in our leadership position in this segment. In addition to the acquisition of the beer operations of FEMSA, our new partnership in India and strong growth in Africa and Asia have further enhanced our exposure to emerging beer markets.”

Outlook

The relentless focus on cost reduction, global synergies and cash flow generation, which was a feature of 2010, will continue in 2011 and beyond.

Heineken expects volume sales in Latin America, Africa and Asia to benefit from ongoing robust economic conditions aided by the group’s marketing and investment programmes. Despite an improving economic environment in Europe and the US in 2011, the impact of austerity measures and high unemployment will result in continued cautious consumer behaviour in these markets, according to Heineken.

The international premium segment will continue outgrowing the overall beer market, benefiting the Heineken brand and supporting improved sales mix. Heineken forecasts a low-single digit increase in input costs and plans to mitigate this impact through increased pricing.

In Europe, Heineken will shift its prime focus towards volume and value share growth, with increased investments in marketing and innovation in Heineken and other key brands, further supported by the international roll-out of higher margin brands. Whilst this is expected to affect profit development in Europe in the near term, it underlines the brewer’s commitment to strengthening its leadership position in the region.

The TCM programme will deliver further cost savings, although at a lower level than in 2010 following the earlier than planned realisation of savings in 2010. As a result of ongoing efficiency improvements, Heineken expects a further organic decline in the number of employees.

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Kellogg’s Crunchy Nut Launched in the US


Kellogg’s Crunchy Nut, the global cereal giant’s UK megabrand, has arrived in the US. The US launch is the latest example of Kellogg Company leveraging proven ideas from around its global markets and follows three decades of success in the UK.

Kellogg is launching the brand in the US with an enormous awareness-driving campaign that will include television, online and in-store advertising. Featured among the numerous consumer promotions are one-of-a-kind marketing programmes.

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Glanbia Acquires US Performance Nutrition Business for $144 Million


Glanbia, the international nutritional ingredients and cheese group, is acquiring Bio-Engineered Supplements and Nutrition (BSN) for $144m (Eur108m) to strengthen its portfolio in the fast growing, higher margin, sports nutrition sector. The business is being acquired on a debt free basis and is expected to be earnings enhancing in 2011. The acquisition is funded through Glanbia’s existing banking facilities.

Headquartered in Florida and employing 140 people, BSN is a leading developer, provider and distributor of nutritional products designed for health, training, physique development and performance. BSN was founded in 2001 and has since become a leading US performance nutrition business. Its products are shipped to over 40,000 retail outlets in the US and distributed in over 90 countries worldwide.

John Moloney, group managing director of Glanbia.

BSN products and brand have won more than 30 sports nutrition awards in the last five years and this has created excellent brand awareness and product loyalty. All its products are multi-functional and apply to a wide range of lifestyles and consumers. Another core product area is protein powders, where Optimum Nutrition (acquired by Glanbia in 2008) is a market leader. In addition, BSN provides a choice of related performance nutrition products.

In 2009, BSN had net revenue of $135.4m and earnings before interest and tax (EBIT) of $10.1m. At the year-ended December 2009, BSN had gross assets of $30.5m. The business has delivered a good performance in 2010.

“BSN is an excellent strategic fit with our Performance Nutrition business and adds strong brand and market positions that complement and extend our portfolio. Since the acquisition of Optimum Nutrition we have established a market leading, scale position in the attractive, high growth, global sports nutrition sector,” says John Moloney, group managing director of Glanbia. “Global Nutritionals is now a Eur600 million revenue business, a position we have built organically and by acquisition in just over five years.”

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Greencore Acquires US Sandwiches Business


UK and Irish convenience food processor Greencore Group is extending its chilled prepared foods business in the US with the acquisition of On A Roll Sales, a manufacturer of fresh sandwiches based in Brockton, Massachusetts, for an undisclosed sum. Gross assets of the business being acquired at September 30th 2010 were $3.4m.

“On A Roll is a promising, growing business with a well diversified customer base of major retailers and convenience stores. This acquisition, will provide an additional revenue stream to Greencore USA’s food to go category and will complement our existing businesses in Newburyport and Cincinnati,” points out Eoin Tonge, group development director of Greencore.

Tony Hynes.

Greencore holds significant positions in the UK convenience food market across sandwiches, chilled prepared meals, chilled soups and sauces, ambient sauces and pickles, cakes and desserts, and Yorkshire puddings. Of course, Greencore is in the process of merging with rival UK convenience food group Northern Foods to create Essenta Foods, a £1.7b turnover business.

Meanwhile, Tony Hynes has decided to step down from his executive role at Greencore. Tony Hynes has helped develop the strategy of the business since his appointment in 2001 during a period of significant change in the company, its markets, its portfolio and the leadership team. He will remain on as chairman of the US business over the next twelve months.

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Danone Continues US Dairy Expansion


Danone is acquiring YoCream, the leading producer of frozen yoghurt in the United States, for $103m. The deal will enable Danone to move into frozen yoghurt, a fast growing segment in the US. It will also gain access to an away-from-home distribution network, in addition to its existing channels.

The move reflects Danone’s strategy for expansion of the fresh dairy products market in the US, in particular by extending the times and places where its products are consumed.

YoCream has pioneered the innovation, production and marketing of frozen yoghurt in the US. The company operates a state-of-the-art production facility in Portland, Oregon, to manufacture its ‘true’ frozen yogurt, which contains real yogurt that is fermented and cultured on site daily.

YoCream’s 2010 net sales are estimated at approximately $58m. The acquisition is subject to usual conditions but is expected to be closed by the end of 2010.

Danone enjoys leading positions in healthy food in four businesses – fresh dairy products (number one worldwide), water (number two in the packaged water market), baby nutrition (number two worldwide) and medical nutrition.

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Northern Foods and Greencore to Create £1.7 Billion Convenience Foods Giant


Northern Foods and Greencore, two of the UK’s leading convenience food processors, are to merge to create Essenta Foods, a £1.7b turnover business with strong positions in private label production along with significant band strength in biscuits and frozen pizzas, respectively through the Fox’s and Goodfella’s brands. The merger is expected to yield cost synergies of £40m per annum within three years, with at least half being realised within the first 12 months after completion. The merger is scheduled to be completed during the second quarter of 2011.

Essenta Foods will be owned equally by Northern Foods’ and Greencore’s shareholders. The combined business will have a high quality asset base with 33 facilities in the UK, eight facilities in Ireland and two facilities in the US.

It will benefit from strong market positions in growing segments of the market such as sandwiches and ready meals, which in the UK have experienced 9.8% and 7.7% market growth respectively in the last year. Greencore and Northern Foods have invested significantly in their respective businesses in recent years and consequently the combined group will have sufficient capacity to support further market growth in these and other segments of the market.

“The proposed merger is a great opportunity to develop fully the potential of both companies. It will create a sustainable, top tier organisation which will be capable of delivering best in class food products and innovative solutions to its customers,” says Anthony Hobson, chairman of Northern Foods.

Patrick Coveney, chief executive of Greencore.

Patrick Coveney, chief executive of Greencore, who will head the merged group, comments: “Essenta Foods presents a compelling opportunity for all stakeholders. It creates a substantial chilled prepared food company in fast growing categories in the UK which is enhanced by strong branded positions in biscuits and frozen food. The investment case is underpinned by tangible cost synergies and the platform for further growth in the UK, Ireland and the US. The time is right for both companies to build a real ‘better than both’ business and I look forward to bringing together the teams from Greencore and Northern Foods to deliver on this opportunity.”

Northern Foods recently reported an operating loss of £9.5m including restructuring charges and a drop in turnover for the six months to October 2nd 2010 as improvements in its chilled foods and bakery businesses were offset by a loss in frozen foods. Although like-for-like sales grew 2.7% in the first half, and by 6% in the second quarter, total sales were £453.0m against £466.9m in the corresponding period in the previous year. Operating profit (pre-restructuring) was £17.5m (down from £20.5m in the previous year), reflecting chilled food profits up from £7.2m to £11.8m, bakery profits up from £8.2m to £10.3m but the frozen foods recording a loss of £4.6m, against a profit of £5.1m in the first half of 2009/2010.

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Strong Annual Operating Performance by Refocused Greencore


Following three strategic disposals to become sharply focused on its UK, Irish and US convenience foods operations, Greencore has reported a 17.6% rise in group operating profit from continuing operations to Eur59.7m on sales up by 6.9% to Eur856.9m for the year ended September 24th 2010. Group operating margin from continuing operations improved by 63bps to 7.0% and Greencore also achieved a 31.8% reduction, year on year, in group net debt to Eur193.4m.

Sales in continuing businesses at the convenience foods division advanced 10.7% to Eur784.5m and operating profit increased 21.1% to Eur54.1m as Greencore capitalised on consumer trends of increased ‘at home’ and ‘on the go’ food consumption and benefited from lower UK manufacturing capacity and the further delivery on its lean and operating efficiency programmes. Sales at Greencore’s US convenience foods business grew by 18%.

Following the disposal of its malt, water and continental European convenience foods businesses for an aggregate total consideration of Eur142.3m, Greencore is a leaner, more focused convenience foods group with two key geographies, the UK and the US. The remaining, non-core ingredients and property business is trading satisfactorily and represents less than 10% of group sales and operating profit.

“We have made enormous progress in reshaping our group into a focused, growing convenience food business this year. This is reflected in the strong sales, margin and profit growth in the results of our continuing business,” points out Patrick Coveney, group chief executive of Greencore. “Furthermore, an effective disposal programme has dramatically reduced group net debt and provides the basis for further development in convenience food.”

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Belvedere Disposes of US Spirits Production Business


Belvedere, the French spirits group, has sold its US production business, Florida Distillers, for $48m. However, Belvedere will retain is US distribution business, which includes the 4 Orange and Sobieski vodka brands. Belvedere acquired Florida Distillers for $56m in 2007.

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Greencore Expects 20% Jump in Annual Profit


Greencore, which is one of the UK’s leading convenience food manufacturers and also has operations in the US, expects group operating profit, excluding exceptional items and amortisation, on continuing businesses for the twelve months ended September 24 2010 to be about 20% ahead of the previous year. Sales from continuing businesses in convenience foods are expected to be about 8% higher than in 2009.

Greencore will release its preliminary results for the 2010 financial year on Tuesday 23rd November.

Looking ahead, based on the current run rate of the business and an expected significant reduction in the group’s interest bill reflecting a full year benefit associated with the FY10 disposals, Greencore is projecting a strong performance in its ongoing business in FY11.

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Lotus Bakeries to Invest Eur27m to Expand Belgian Production Capacity


Due to rising export sales of its biscuits and cakes in France, Netherlands, UK, US and Asia, Lotus Bakeries is investing Eur27m to expand production capacity at its Belgian operations over the next three years. The group’s site at Lembeke will be extended and all caramelized biscuit production will be centred there. Lotus will also consolidate all cake production at its plant at Oostakker. Both projects are expected to be operational in 2013. Some 20 jobs will be created in the medium term.

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Northern Ireland Meat Companies Look to Growth in Global Markets


Northern Ireland’s £1.5 billion meat industry must work on strategies that will reduce costs and increase its ability to exploit opportunities that will grow in Europe and other global markets over the next decade. The business opportunities and threats, including rising feed and other costs, as well as consumer trends facing the local industry, which employs over 9,000 people, are highlighted in a major study by GIRA, a leading French consultancy specialising in the global meat industry, commissioned by Invest Northern Ireland in conjunction with the Livestock and Meat Commission (LMC).

Commenting on the 117-page study, ‘Long-Term Strategic Trends in World Meat Markets 2010-2012’, Ian Murphy, Invest NI’s managing director of clients and entrepreneurship, says: “This is one of the most significant documents that we have produced because meat processing is vitally important here in terms of the scale of its contribution to the local economy, especially rural communities, in areas such as exports, new product development and, of course, employment. Currently the industry contributes around 50 per cent of the £3 billion earned by food processing here.”

He continues: “Ensuring its long-term growth, therefore, is immensely important to Invest Northern Ireland and, of course, to the wider community. What this study does clearly and concisely is highlight the opportunities, particularly in Europe, and the challenges our companies will face increasingly from global competitors from South America, China and the US and from rising input costs such as feed stuffs and energy, as well as from the sharpening focus, particularly among European consumers, on food safety and sustainability.

“Our companies should draw great encouragement, however, from a number of points in the study. There is good news for our companies in terms of the protection provided against competition in the EU with its agri-food and environmental policies.

The study also highlights new business opportunities especially in poultry, one of Northern Ireland’s strengths, pigmeat and beef and the good reputation Northern Irish companies enjoy with key retailers which are increasingly developing their international presence. What companies must do is to redouble their efforts to ensure efficiency, productivity and overall, exports, innovation in areas such as higher value added products for niche markets, and overall competitiveness. For instance, the report identifies the advantage that companies that guarantee food safety through greater control have over their supply chain globally.

“Our commitment is to continue to work with local companies to enable them to apply the relevant points in the study, to harness the opportunities ahead and to overcome the challenges especially in key areas such as costs,” he adds.

Among the key points in the study is the projected continuing growth in poultry products. Demand for most meat products will be driven by rising populations.

While other meats will also continue to grow in sales, poultry will gain the most market share. Poultry is described as the cheapest and easiest of the farmed meats to produce. Demand in the developing world, especially China, will increase for most meat products.

EU growth will favour ‘cheaper, quicker growing species’ with chicken continuing to win market share.

Forces driving change in the industry are likely to include – increasing animal welfare concerns which would mean higher costs, higher oil prices, currency volatility, rising costs as sustainability grows in importance, and nutrition concerns among consumers and governments.

Production in some regions will be impacted adversely by issues such as water shortage and land degradation.

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Campari Acquires Liqueur Brands From William Grant For €128 Million


Italian drinks producer Gruppo Campari is acquiring the Carolans, Frangelico and Irish Mist brands from William Grant & Sons, the Scotch whisky distiller. The acquisition reinforces Campari’s position as a fast growing company in the US and key international premium spirits markets.

The enterprise value of the acquired business is Eur128.2m, corresponding to 7.5 times the pro forma EBIDTA 2009 (inclusive of the distribution margins of the Frangelico brand in the US). The transaction is expected to close on October 1st 2010 and the consideration will be fully self-financed. Overall the acquired business is expected to contribute about 1 million nine-litre cases and net sales of Eur50m on an annual basis.

Bob Kunze-Concewitz, chief executive of Campari.

“With Carolans, Frangelico and Irish Mist we add a high-quality and profitable business with upside potential and further enhance the group’s premium offering. In particular, we increase our critical mass in the highly-profitable US market and strengthen our exposure to a number of key international markets, including Australia, Russia, Canada, Spain and the UK,” says Bob Kunze-Concewitz, chief executive of Campari. “This acquisition represents a perfect fit in our acquisition framework, in business and financial terms. Moreover, it will benefit from low risk and easy integration, as we already account for 60% of the acquired portfolio volume and we are the global source for Frangelico.”

The Carolans, Frangelico and Irish Mist brands only recently became part of the William Grant portfolio following the company’s Eur300m acquisition of the spirits and liqueurs business of Irish and UK cider maker C&C Group in July 2010. The acquisition netted William Grant Tullamore Dew, the world’s second largest Irish whiskey brand with sales of over 600,000 cases worldwide, which has now become the Scotch group’s sixth core brand.

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Barry Callebaut to Expand Production Capacity After Global Supply Agreement With Kraft


Barry Callebaut, the world’s largest manufacturer of cocoa and chocolate products, and Kraft Foods, the world’s second largest food company and a global leader in confectionery, have signed a long-term global product agreement. Under the terms of the agreement, Barry Callebaut will deliver the majority of Kraft Foods cocoa products and industrial chocolate requirements around the world. The agreement, which also includes some of the Cadbury liquid chocolate deliveries under the current outsourcing agreement, is expected to more than double Barry Callebaut’s existing business with Kraft Foods.

Juergen Steinemann, chief executive of Barry Callebaut.

As a result of this agreement, Barry Callebaut will increase its production capacities primarily in the US, Canada, Cote d’Ivoire, Malaysia as well as in Europe and invest approximately $65m (SFr66m, Eur51m) over the next two years. The additional volumes will be built up gradually over a period of three years, starting immediately.

“This long-term global supply agreement with Kraft Foods ranks amongst the largest strategic deals our company has ever signed. It means that we have succeeded in firmly establishing ourselves as a leading supplier for cocoa and chocolate products to the international food industry,” says Juergen Steinemann, chief executive of Barry Callebaut. “We are excited about this partnership between two leading companies in their field which is evidence of the ongoing outsourcing and partnership trend in the chocolate industry.”

With annual sales of about SFr4.9b (Eur3.2b) last year, Zurich-based Barry Callebaut is present in 26 countries, operates more than 40 production facilities and employs about 7,500 people.

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Dogged Full Year Performance By Pernod Ricard


Pernod Ricard, the world’s second largest spirits and wine group, has reported a 1% increase in net profit to Eur951m on net sales down 2% to Eur7.08b for the 2009/10 financial year ended June 30th 2010. Organic sales growth was 2%, including a significant 9% upturn in the second half, but the results reflect negative foreign exchange factors and the disposal of the Wild Turkey, Tia Maria and Bisquit brands and the impact of the termination of Stolichnaya distribution.

The French drinks group noted a contrasting global economic environment, which improved during the second half, featuring strong growth in most emerging economies, and a very gradual recovery of consumer spending in the US against a continuing uncertain backdrop. The picture was mixed in Europe with some signs of a recovery but also the adverse impact of austerity measures.

Pernod Ricard’s top 14 brands, which account for 55% of group sales, grew by 2% in volume and 4% in value. Martell (+12%) and Jameson (+12%) achieved double digit growth and seven others continued to grow, in particular The Glenlivet (+7%), Absolut (+6%), Chivas (+5%) and Havana Club (+5%). Conversely, Mumm (-7%) reported a decline, due to the difficulties in the French champagne market. Within the priority premium wine portfolio, Jacob’s Creek sales declined by 5%, reflecting Pernod Ricard’s premiumisation strategy for the brand.

Group profit from recurring operations rose by 4% to Eur1.79b but the operating margin slipped to 25.4% of sales, compared to 25.6% in the previous financial year. Group debt was reduced by Eur1.09b, excluding translation adjustment, during the year.

Pierre Pringuet, chief executive of Pernod Ricard.

Europe excluding France was the region most affected by the crisis, posting a 3% decline in profit from recurring operations. The situation remained difficult in Western Europe (Spain and the UK) even though a number of countries achieved growth, such as Germany and Sweden, and Duty Free markets noted a recovery. In Eastern Europe, Russia and Ukraine reported a strong upturn in the second half of the year but the situation was more difficult for local vodka brands in Poland. Pernod Ricard saw satisfactory 7% growth in its domestic market of France.

Despite the economic crisis, Pernod Ricard managed to keep growing in new economies, and continued with its premiumisation strategy. “Our performance over the 2009/10 financial year was a strong and sound one. Our priorities for the 2010/11 financial year remain the development of our premium strategic brands, a continuing strong marketing investment level, and the reduction in group debt,” says Pierre Pringuet, chief executive of Pernod Ricard.

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Emerging Markets Drive Heinz


Emerging markets such as China, India, Indonesia, Latin America and Russia are expected to deliver at least 20% of Heinz’s total sales by 2013, more than double their contribution of just five years ago, according to William Johnson, chief executive of the US-based global food group.

“Emerging markets are key to unlocking future growth because their economies are growing at a significantly higher rate than developed markets; the middle-class in emerging markets will eventually outnumber the combined populations of the US and Europe; and per capita consumption of packaged foods in emerging markets has significant upside,” he explains.

Record Sales and Profit

Heinz achieved record sales of $10.5b, up almost 5%, and record gross profit of $3.8b in its 2010 financial year, despite having to navigate “the most difficult economic environment in decades.” William Johnson adds: “Our record sales were driven by solid results in our Top 15 brands and most importantly, by accelerating double-digit growth in emerging markets, our most powerful growth engine.”

With emerging markets generating organic sales growth of almost 22% in the first quarter of the 2011 fiscal year, Heinz is on track to deliver its financial targets for the full year, even though the consumer and economic environment remains challenging.

Indeed, William Johnson says the global economy is in the worst state he has seen during his 35 years in the consumer goods industry. “The near-term economic outlook for the US and Europe remains pretty dreary, marked by high unemployment and low consumer confidence.” He adds “Many consumers have gone into what I like to term as economic hibernation, eating at home more often, eating out less, reducing spending and worrying more about the future.”

Heinz is not spending much time looking for M & A opportunities in the US and Western Europe but instead is focusing almost entirely on the emerging regions of the world.

Heinz expects to deliver another year of strong results on a constant currency basis, with sales growth of 3 to 4%, operating income growth of 7 to 10%, and earnings per share growth of 7 to 10%. Heinz also projects operating free cash flow of more than $1b for the second consecutive year.

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Solid First Half Performance By Emmi


Helped by rising international sales, Swiss dairy group Emmi has increased net profit by 21.5% to SFr39.9m (Eur31m) on sales down by 0.5% to SFr1.27b for the first half of 2010. The profit margin was 3.1 % and Emmi anticipates stable sales for the second half of the year, with the margin remaining at around 3 %.

Net sales in the Swiss market fell by 2.8 % to SFr932.2m. The fall was lower than expected and was primarily due to reductions in the price for raw milk. However, sales volumes in the Swiss market remained at around the same level as the prior year.

Emmi achieved a 6.5 % increase in sales in its international business to SFr343.0m. At constant currencies, the international markets actually posted growth of 9.4 %, while volume growth was 7.2 %. The cheese business in the US developed positively and Roth Kase USA, acquired by Emmi in 2009, performed well.

Emmi’s strategy is based on three pillars – a strong domestic market, international growth and rigorous cost management. The acquisition of the Californian cheese specialist Cypress Grove Chevre, announced on 20th August, and the total acquisition of CASP (Contract Aseptic & Specialty Packaging) in New York, further strengthens Emmi’s position in its largest foreign market. Investments made in the first half of the year, such as the takeover of Fromalp in Zollikofen on 1st July, and the acquisition of a minority stake in the Italian fresh cheese specialist Venchiaredo, will also have an impact in the months ahead.

Looking forward, Emmi anticipates stable sales in the Swiss market and the international business to see sales increase by 8-10 % including acquisitions, or 6-8 % from organic growth.

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Greencore Completes Disposal of Dutch Convenience Food Business


Leading UK and Irish convenience food manufacturer Greencore Group has completed the sale of its Netherlands-based convenience foods business, Greencore Continental, to Convenience Foods Europe, a subsidiary of Parcom Buy Out Fund IV.

Greencore Continental supplies sandwiches, chilled pizzas and chilled sauces to customers based in Continental Europe. It operates from two facilities located at Liessel and Alphen in The Netherlands. The turnover of Greencore Continental was Eur58.2m for the year ended 25th September 2009 and the net assets of the business were Eur12.7m at that year end date.

Partrick Coveney, chief executive of Greencore.

The proceeds from the deal will be used to reduce Greencore’s net debt. According to Partrick Coveney, chief executive of Greencore, the disposal is in line with the group’s strategy of developing an industry leading position in convenience foods in the UK supplemented by a growing convenience foods business in the US.

Greencore enjoys strong market leadership positions in the UK convenience food market across sandwiches, chilled prepared meals, chilled soups and sauces, ambient sauces and pickles, cakes and desserts and Yorkshire puddings.

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Good Performance From Glanbia as Irish Business Returns to Profit


John Moloney, group managing director of Glanbia.

Glanbia, the international nutritional ingredients and cheese group, has delivered strong top line revenue, profit and margin growth for the six months ended July 3rd 2010 as its Irish dairy ingredients business was restored to profit. Group profit before tax increased 58.4% to Eur60.2m on revenue up 9.7% to Eur1.04b. Revenue from Glanbia’s US Cheese and Global Nutritionals business rose 22.2% to Eur490.6m while revenue from Dairy Ireland grew marginally to Eur542.9m.

Group operating profit increased 38.7% to Eur66.3m helped by a strong recovery and return to profitability in Irish Dairy Ingredients, compared with a significant loss in the same period last year, and a good performance in Global Nutritionals. Group operating margin increased 130 basis points to 6.4%.

“For the full year 2010, US Cheese & Global Nutritionals is expected to deliver reasonable year-on-year growth, underpinned in particular by the performance of Global Nutritionals. In Dairy Ireland, performance will be somewhat mixed with Irish Dairy Ingredients strongly ahead compared with a loss in 2009, Consumer Products behind in the context of a very tough trading environment and Agribusiness marginally ahead of a difficult 2009,” says John Moloney, group managing director of Glanbia.

Glanbia’s international joint ventures and associates are expected to have a good full year, underpinned by a solid performance from Southwest Cheese in the US and Glanbia Cheese in the UK, and an improved operating performance at Nutricima in Nigeria.

While the global economic environment remains uncertain, Glanbia expects to achieve strong revenue, operating profit and margin growth for the full year. Consequently, Glanbia has revised its earnings guidance upwards and is now expecting approximately 20% adjusted earnings per share growth for the full year.

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Strong Showing From Heineken


Global brewer Heineken has produced a strong first half performance but remains cautious on the development of beer consumption in Europe and the US due to continued weak consumer spending and planned austerity measures across many countries. Heineken reported a 42% jump in net profit to Eur695 million, partly due to positive exceptional items, on revenue up by 5.2% to Eur7.52b but down organically by 2% for the first half of 2010 as group beer volume declined by 2.3% organically, impacted by the weak economic environment and the effect of excise duty increases, partly offset by strong growth in Africa, Asia and Latin America.

Heineken’s organic net profit (beia) increased 17% to Eur621m, driven by higher EBIT (beia) and lower interest costs. The Dutch brewer’s Total Cost Management programme delivered savings of Eur104m during the first half.

Jean-Francois van Boxmeer, chairman and chief executive of Heineken.

“Heineken achieved strong organic net profit growth in the first half year 2010. Trading conditions remained challenging in Europe and the USA, but we realised strong group beer volume growth in Africa and Asia. The effectiveness of our premium strategy was reinforced by the continued strong performance of the Heineken brand which once again outperformed our broader portfolio and the overall beer market,” comments Jean-François van Boxmeer, chairman and chief executive of Heineken.

In the second half of 2010, Heineken will continue its focus on brand building and increase investments in key brands, which will be largely offset by lower input costs. The TCM programme will deliver further savings in the second half of the year. In addition, Heineken will focus on developing the performance of companies acquired during the last three years, including South American brewer FEMSA Cerveza, and the unlocking of synergies.

“We are well placed for the future. Our expanded footprint in Latin America complements our strong positions in Africa and Asia where we continue to see excellent opportunities for future volume growth. Our focus on cash flow has strengthened our balance sheet and our key brands are benefiting from our increased marketing investments,” he adds.

The recently completed acquisition of FEMSA Cerveza, which is expected to yield annual cost synergies of Eur150m by 2013, consolidates Heineken’s position as the world’s second largest brewer by revenues and third largest by volume, and expands its exposure to developing beer markets. In addition, it creates a platform for future value growth in three of the four largest beer profit pools in the world.

Heineken expects the organic increase in net profit (beia) for the full year 2010 to be at least in low double digits.

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Emmi Strengthens US Cheese Business


Swiss cheese producer Emmi has expanded its international business with the acquisition of US cheese specialist Cypress Grove Chevre. Based in California, Cypress Grove is well known in the US for fresh and ripened premium goat’s cheese specialties. Emmi has also increased its stake in New York-based CASP (Contract Aseptic & Specialty Packaging) to 100%. CASP specialises in contract manufacturing of aseptic milk products and forms an important pillar in Emmi’s fresh products business in the US. The purchase price for both deals was not disclosed.

Emmi plans to continue its international growth, focusing in particular on the Italian, German, Austrian, UK and US markets. The US cheese market is worth about $16.4b, with the fast-growing speciality cheese segment – in which goat’s cheese plays an increasingly important role – accounting for around $1b. Emmi generated sales of around $175m in the US last year.

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Aryzta Makes Strategic Investments in North America, Latin America and Asia


International speciality bakery group Aryzta is acquiring Tim Horton’s 50% share in Maidstone Bakeries, a Canadian joint venture between Aryzta and Tim Horton, for C$475m (Eur349m). The Maidstone facility was designed, constructed and commissioned in partnership with Tim Hortons, the leading quick service restaurant (QSR) in Canada, in 2002 to 2003.

The purpose built 400, 000 sq ft bakery based in Ontario helped transform the Tim Hortons business as its restaurants were subsequently able to produce freshly baked goods across all parts of the day. Maidstone will continue as a strategic supplier to Tim Horton’s restaurants but Aryzta will be in a position to fast track growth from its manufacturing capability in North America by using Maidstone to serve the dynamic QSR segment.

Owen Killian, chief executive of Aryzta.

Maidstone has the capability to produce a broad range of products including sandwich carriers, handheld snacks, and breakfast products both sweet and savoury to meet the demands of the QSR industry. Maidstone generates an annualised EBITDA of C$67m (Eur49m) at its estimated 55% current capacity utilisation.

With 100% ownership Aryzta will be able to market Maidstone’s spare capacity across all its customer channels with a particular focus on its recently expanded customer base following its acquisition of Fresh Start Bakeries in the US. The increased capacity utilisation will unlock value for Aryzta from its investments in Maidstone which will total Eur409 million after purchase of the Tim Horton stake.

Investment in Brazil and Asia

Separately, Aryzta’s US subsidiary, Fresh Start Bakeries, is in the process of completing an investment in three bakeries in Asia (located in Taiwan, Singapore and Malaysia) and will commence the construction of a new bakery in Brazil. These bakeries will principally service a leading international QSR operator that is expanding in these regions. The investment by Fresh Start Bakeries is expected to total about US$48m (Eur36m).

“Aryzta highly values its relationship with Tim Hortons and welcomes the opportunity to enhance the value of Maidstone Bakeries which complements our recent investments in North America. These investments significantly enhance our bakery capability in North America and in the emerging QSR growth regions of Latin America and Asia,” comments Owen Killian, chief executive of Aryzta.

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Arla Foods Expands Cheese Production in America


Arla Foods is expanding its dairy in Hollandtown, Wisconsin, in the US to match American consumers’ growing interest in ‘premium’ class quality cheese. The expansion will be completed in early summer 2011 and is set to boost sales.

Despite the financial crisis, Arla’s American sales continue to rise. Last year, Arla’s sales in the US rose by 10%, and midway into 2010 volumes sold are showing a 20% year-on-year increase. The progress is remarkable in that the niche market for quality cheese, Arla’s speciality in the US, saw a general decline during the crisis.

In American supermarkets, Arla products belong in the delicatessen departments.

About 70% of Arla’s products for the US are manufactured at the Scandinavian group’s two US dairies in Muskegon, Michigan and Hollandtown, while 30% is imported from Denmark

Arla sells around 16,000 tonnes to American consumers per year. This is only a fraction of total cheese sales in a market that is generally regarded as huge in terms of cheddar and processed cheese for burgers, pizzas and many other fast food products.

In American supermarkets, Arla products belong in the delicatessen departments. As Havarti and blue cheese are regarded as niche categories, this is an area with significant potential for boosting sales.

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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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GSK to Launch Lucozade Brand in the US


UK-based global healthcare group GlaxoSmithKline is planning to launch its Lucozade energy drink in the US, which is the world’s biggest nutritional health market. The Lucozade brand, which had sales of £376 million in 2009, is currently predominantly sold in Britain and Ireland.

However, it was recently launched in the vast Chinese market, after GSK signed an agreement with President (Shanghai) Trading Co, a trading arm of Uni-President China Holdings, a leading food and beverage company in China.

Andrew Witty, chief executive of GSK.

The moves into China and the US are in line with GSK’s goal of increasing its presence in emerging markets of the world. Andrew Witty, chief executive of GSK, plans other launches through partnership deals in markets such as Mexico and Brazil.

Indeed, the roll out of Lucozade is part of his wider strategy of creating a global and diversified business. Investment in the consumer business, which in the past had been considered a candidate for disposal, is now seen as means of growing GSK’s overall sales.

The Lucozade brand along with Ribena and Horlicks are part of GSK’s Nutritional Healthcare division. Although the Nutritional Healthcare division is only a small part of GSK’s global operation, which achieved pre-tax profits of £7.9 billion on sales of £28.4 billion last year, its is still a sizeable and lucrative business, armed with its powerful brands portfolio.

GSK is the third biggest player within the £6.2 billion UK take-home soft drinks market, behind leader Coca-Cola Enterprises and second ranked Britvic. The top three players account for almost half of this market. Lucozade was the second biggest brand within the take-home market last year and Ribena was in seventh place.

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