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September 23, 2015

General Mills Posts Solid Profit Growth in the US but International Sales Remain Worrying

Pinar HosafciAnalyst Insight by Pinar Hosafci - Packaged Food Analyst

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General Mills has recently announced its first fiscal quarter results revealing net revenue growth of  4% in constant-currency basis and profit growth of 20%, one the highest rates in its recent history. Profit growth came off the back the aggressive cost-cutting measures including trimming the workforce, closure of underperforming manufacturing facilities and ousting of extraneous businesses like Green Giant. The US accounted for the bulk of revenue growth, which was driven by Annie’s Homegrown, which the company acquired in October 2014, and ongoing renovation and innovation in cereals leading to 6% growth against the 1% decline in the overall category.  General Mills’ better-than-expected  performance stands in stark contrast with Kellogg, which operates in similar categories. The two companies overlap in multiple markets including the US and Canada breakfast cereals, France snack bars and US frozen bakery which are low growth categories and yet General Mills still managed to grow its share while Kellogg failed to do so.

The push towards organic and natural underpins General Mills’ success in the US


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September 3, 2015

General Mills sells Green Giant to B&G Foods

Green-giantInitial Comments by Emily Balsamo - Research Analyst

B&G Foods signed a deal on Thursday to acquire Green Giant and canned vegetable brand Le Sueur from General Mills for $765 million in cash. Prior to the acquisition, B&G did not own any brands of frozen foods, with Green Giant marking the company’s foray into the freezer aisle. Green Giant, which produces frozen vegetables, hummus and, vegetable side dishes, has seen declining sales in previous years. General Mills explained the sale of the company in terms of their vision for their portfolio, focusing on fast moving, less commoditized products such as cereals, yoghurt, and snacks.

General Mills said the sale was in line with its effort to reshape its portfolio to focus on brands, categories and geographic markets that have the greatest future growth opportunities. General Mills posted sales of $18.7 billion in fiscal year 2015. New York Times

The two companies have struck a deal allowing General Mills to continue to operate Green Giant under license in Europe and some other export markets. In a news release announcing the acquisition, Robert C. Cantwell, the B&G Foods president and chief executive, hinted at the future of Green Giant:

“For over 100 years, Green Giant and Le Sueur have been providing consumers with great tasting, nutritious vegetables picked at the peak of perfection. We look forward to building on that rich history by offering new and innovative products that will respond to the needs of today’s health conscious consumer.” -B&G Foods

An eye towards innovation may be what Green Giant needs to rebound sales. The transaction is targeted to close by the year’s end.

Pinar HosafciFurther Comments by Pinar Hosafci - Packaged Food Analyst
Added 9/4/15 10:00am CST

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The disposal of Green Giant has been a long time coming. Speculations around the sale of Green Giant have already surfaced in March 2015, following General Mills announcement to trim its number of divisions from seven to five. Under this new restructuring plan, frozen food, which accounts for the majority of Green Giant revenue, was integrated into other divisions. 2014 was one the worst year’s in General Mills recent history with net sales growing by less than 1% - their slowest pace since 2010. This has to a large extent to do with General Mills strong reliance on slow growing staple foods such as cereals and processed vegetables. As General Mills controls a wide range of brands in diverse categories, it faces challenges in achieving group synergies. While Green Giant is General Mills’ second largest brand following Yoplait, it has few potential synergies with the group’s core focus areas, which include yoghurt, cereals and snacks. The importance of Green Giant in General Mills’ overall portfolio has also been eroding: While in 2009 Green Giant accounted for 12% of General Mill’s packaged food sales, in 2014 the brand’s share fell to 8%. The US canned processed vegetable business accounted for the majority of this share decline, with sales crashing by over US$50 million over the course of the last five years. As a result, the company has taken a more active approach in streamlining its portfolio towards premium, higher margin products and divesting away from low growth, low profit brands such as Green Giant. This strategy to focus on high margin brands was also illustrated by the group’s recent acquisition of Annie’s Naturals, a manufacturer of premium frozen and ambient snacks. The sale of Green Giant, General Mill’s second biggest cash generator, could free up resources help the company make more acquisitions in the premium healthy food area and accelerate growth in emerging markets, in particular in China, where the group recently opened a research and development centre, the first major one outside the US.


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August 27, 2015

Spiralized Vegetables Succeed as Ersatz Pasta

Simone BarokeAnalyst Insight by Simone Baroke - Contributing Analyst

Supermarket sales of courgettes and root vegetables are revving up this season. 2015 could well be the year when more consumers than ever will be reaching their five (or six, or seven) a day fruit-and-vegetable consumption target, and all thanks to a new trend that sees common vegetables transformed into a substitute for gluten-addled staples.

Pasta is suffering

How the world of pasta has changed. Once, it was all about the content of high quality durum wheat which separated the good from the bad. Now the mere mention of wheat makes consumers feel twitchy. Our packaged food data show that value sales of dried pasta fell by 13% in Western Europe and by 6% in North America over the 2009-2014 review period (based on fixed US$ 2014 exchange rates and constant prices). In Germany, sales dwindled by 13%, in Sweden by 11% and in Italy, pasta’s ancestral home, values plummeted by a disconcerting 25%.

For today’s health and weight conscious consumer, pasta is beset by two increasingly unpalatable problems. First of all, it is made from gluten-containing wheat, and it is precisely gluten and wheat which a growing number of consumers are trying to avoid. The second issue is that pasta is regarded by many as nothing more than a low-in-nutrients-but-high-in-carbs vehicle for tasty sauces. Pasta has thus come to be branded as an “empty calorie” food, much like white bread, sales of which aren’t doing too well either these days.

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August 25, 2015

What’s New in Oils and Fats in 2015: Olive Oil vs Other Oils, a Case of Quality against Quantity

Raphael MoreauAnalyst Insight by Raphael Moreau -  Food Analyst

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While most other types of oils have seen their prices per litre nosedive between 2012 and 2014 in constant terms, olive oil has bucked the trend by recording a steady rise. Specific short-term factors leading to poor harvests in 2013 and 2014 in the world’s largest producer countries naturally played a strong part in hiking olive oil prices. However, other longer-term factor are at play, notably the positioning of virgin olive oil as a premium product, but also its reliance on sales in developed markets with high prices. Meanwhile, olive oil’s global per capita consumption saw a small decline since 2013, in contrast to the rise seen for less premium types of oil, which are more popular in emerging markets.

Divergent trends in unit prices

The rise in the olive oil unit price was largely the result of a sharp fall in production in the 2014/2015 season, with the International Olive Council estimating it as about a third lower than the previous year and the worst since 2000. This is largely due the olive crop in Italy having suffered from fly infestation and bacteria, while Spain’s crop was badly affected by drought. This follows a disappointing 2013/2014 season, with Greece seeing a major drop in production.

Continue reading "What’s New in Oils and Fats in 2015: Olive Oil vs Other Oils, a Case of Quality against Quantity" »

August 23, 2015

Euromonitor to Speak at Best of Food and Beverage Packaging 2015


Event Name: Best of Food + Beverage Packaging

Date: Oct 28-29th 2015

Location: The Hyatt Lodge at McDonald’s Campus, Oak Brook IL

Event Description:  Best of Food and Beverage Packaging 2015 brings together the best ideas from brand owners, packagers, and marketers on how to make your packaging that compelling.

Whether you’re a small entrepreneur or a billion-dollar brand manager, this conference is critical because it’s not enough in today’s rapidly changing world to produce the best-tasting pie or the healthiest drink. Your packaging must tell the story about why your product delivers value above and beyond the competition.

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August 16, 2015

What's New in Baked Goods in 2015?

Pinar HosafciAnalyst Insight by Pinar Hosafci - Packaged Food Analyst

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The global baked goods market is set to grow by 5% in current value terms, reaching US$339 billion in 2015, while volumes continue to stagnate for another year. This is to a large extent driven by bread, which accounts for 84% of total baked good sales, but continues to suffer from a decline (or at best stasis) in volumes. While bread’s lacklustre performance exerts a downward bias to the overall category, there is more to baked goods than bread. In this edition of packaged food, baked goods includes desert mixes and frozen baked goods – recategorisation that adds a further US$10 billion to market coverage – in addition to its traditional categories of bread, cakes and pastries.

2015 sees a shift in top country rankings

Egypt is expected to overcome Turkey to become the world’s second biggest baked goods market in volume terms. This is in part due to the Turkish Government’s efforts such as the Preventing Bread Waste Campaign, which significantly reduced unpackaged white bread purchases in Turkey.  In part, it is the result of the ongoing subsidies given to bread flour in Egypt, which has kept unpackaged bread affordable for the masses.  At less than US$0.5/kg, bread prices in Egypt are among the lowest in the world, leading to over purchase of the staple.  With over nine million tonnes worth of sales in 2015, baked goods volumes in Egypt are more than France and Italy combined.

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August 13, 2015

Nestlé 2015 H1 Results on Target yet Data Suggests it Needs a Reshuffle

Lianne van den BosAnalyst Insight by Lianne van den Bos - Food Analyst

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The results from Nestlé H1 are on track with 4.5% organic growth, on par with the group’s target of around 5% growth for 2015. The emphasis of today’s investor call was on portfolio management and more specifically how Nestlé is addressing known weaknesses in its portfolio. The group is struggling with weakening demand in China, the world’s second largest economy, and is facing the aftermaths of the Maggi scandal in India's instant noodles. Both resulted in a drop in trading operating profit margins for the AOA region by 80 basis points. Moreover, its stagnant frozen-food business is not helping things, despite a total rebranding of its Lean Cuisine products.

The appointment of new Chief Financial Officer François-Xavier Roger signals the group’s emphasis on portfolio management, in order to address its weaknesses. In a press release Paul Bulcke, CEO of Nestlé, stressed his confidence in the new CFO, who has vast experience in finance and control, mergers and acquisitions, and relations with regulators and investors. During his first investor call the Chief Financial Officer highlighted Nestlé’s model, designed to aid portfolio management, looking at profitability of brands amongst other things. With that in mind, Euromonitor assesses Nestlé’s current portfolio and where the group needs to rebalance.

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¡No te pierdas nuestra presentación en el Food Technology Summit & Expo 2015!


Nombre del evento: Food Technology Summit & Expo 2015

Fecha: 23-24 de septiembre, 2015

Día, fecha y hora de nuestra presentación: Miércoles 23 de septiembre de 11:30 a 12:30, Centro Banamex, México DF

Acerca del evento:  El Food Technology Summit & Expo México es el único evento en español para la industria de alimentos y bebidas, en América. Tiene lugar anualmente en el Centro Banamex de la Ciudad de México. La 8° edición se realizará los días 23 y 24 de septiembre de 2015. El piso de exposición tendrá este año 15.500 metros cuadrados de superficie, donde más de 250 proveedores de ingredientes y soluciones para la industria ofrecerán sus últimos lanzamientos. Se espera la presencia de más de 10.000 asistentes. En materia de capacitación, este evento ofrece un Summit Internacional con ocho ponencias ofrecidas por destacados speakers nacionales e internacionales, y más de 20 Conferencias Gratuitas de Innovación Alimentaria. La Expo ofrece un Lounge Privado para clientes, Coffee Breaks gratuitos, Almuerzo, Cóctel de Cierre de evento y el mejor ambiente de networking y negocios. El perfil de visitantes es: Gerentes Generales, R&D, Marketing, Producción, Nutrición y Calidad, de empresas elaboradoras de alimentos y bebidas de México y Centroamérica.  

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August 12, 2015

Is Fructose the new Trans Fats?

Simone_BarokeAnalyst Insight by Simone Baroke - Contributing Analyst

The storm clouds have been brewing over fructose for some time now, and the days when “fructose” sounded better and more natural on a label than “glucose” or simply “sugar” are fast coming to an end. Research, which implicates fructose in the development of chronic conditions, like cardiovascular disease, diabetes and obesity, is gradually mounting. We ask the question which many industry watchers must be pondering right now, namely whether fructose is destined to share the fate of trans fatty acids (TFAs), whose near-elimination from the human food supply is a very much a work in progress.

Both entirely natural and part of our food supply

There are very few compelling parallels between fructose and trans fats. First of all, both occur naturally in our food supply. Fructose is a natural sugar found in fruit and vegetables, while trans fats feature in meat and dairy foods in small quantities owing to ruminants’ metabolic processes.

As such, neither fructose nor trans fatty acids can be wholly eliminated from the human food supply, and nor do they give cause for health concerns as long as they are consumed as part of the foods in which they are inherent, and provided that these are not eaten in excess.

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August 10, 2015

Doing Business in the Halal Market

The Muslim religion is the second largest and fastest growing religion in the world, with Muslim consumers expected to reach 26 percent of the global population by 2030.

Muslim consumers seek products that cater to their religious needs and comply with Islamic requirements: from halal production process to halal labelling and packaging. The lack of permissible offerings has led to a surge in demand, as Muslims grow hungry for trendy products and services adapted to their lifestyle.

Discover opportunities in this ever-expanding pool of consumers. Download our white paper today.


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Recent Posts

General Mills Posts Solid Profit Growth in the US but International Sales Remain Worrying

General Mills sells Green Giant to B&G Foods

Spiralized Vegetables Succeed as Ersatz Pasta

What’s New in Oils and Fats in 2015: Olive Oil vs Other Oils, a Case of Quality against Quantity

Euromonitor to Speak at Best of Food and Beverage Packaging 2015

What's New in Baked Goods in 2015?

Nestlé 2015 H1 Results on Target yet Data Suggests it Needs a Reshuffle

¡No te pierdas nuestra presentación en el Food Technology Summit & Expo 2015!

Is Fructose the new Trans Fats?

Doing Business in the Halal Market