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March 27, 2015

Why the Changing US Grocery Retail Market Underpins the Kraft and Heinz Merger

Tim BarrettAnalyst Insight by Tim Barrett - Retailing Analyst

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On March 25th, 2015 it was announced that Kraft Foods and HJ Heinz would merge, ultimately forming a packaged food power house called the Kraft Heinz Co.  This combined company would have a 5.4% value share of the entire US packaged foods market, making it the number one company in the space with nearly US$20 billion in sales. This merger is primarily a response to a changing grocery landscape which prioritizes cost efficiencies, given the emphasis on low prices for the consumer.

Wal-Mart becomes king of grocery retailing

Within grocery retail, Wal-Mart maintains disproportionate power as the nation’s dominant grocery retailer with around 20% market share in 2014. Its second largest competitor, Kroger, only has 8%. Wal-Mart has managed to tighten its grip on the grocery market over the past ten years, growing sales from US$45.3 billion in 2004 to US$156.5 billion in 2014.  Wal-Mart was able to increase its grocery sales by 245% thanks to its core strategy:  lower prices. 

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March 26, 2015

The Link Between Alcoholic Drink Consumption and Analgesics and Slimming Products in Latin America

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The consumer view that a hangover is a chemical process that can be solved with chemicals helps explain the correlation between sales of alcoholic drinks and aspirin/ibuprofen in the three Latin American countries included in this study. When weight management products are added to the equation, these industry verticals form a chain that reaches far into the festive consumer culture in these markets.

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March 25, 2015

Kraft and Heinz Merger a Cost Cutting Story

 

The recent merger between Kraft and Heinz is not a growth story, but a cost cutting story. Heinz has already cut staff and manufacturing plants previous to the merger, and in order to achieve mutual benefits, Kraft will likely have to follow suit. With the combination of insights and consumer trends teams, new product launches catering to US palates are likely in the near future.

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The Global Impact of the Kraft and Heinz Merger

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The announcement of the merger of Kraft and Heinz is big news for the industry as the merger creates one of the largest global food companies. The main goals of the merger for both Kraft and Heinz are to cut costs and develop co-branding opportunities.

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Podcast features Raphael Moreau - Packaged Food Industry Analyst

March 24, 2015

E-Commerce in China Could Boom after New Zealand Infant Formula Poison Threat

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

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Over the last few years Internet retailing for baby food has soared in China after several baby food scares caused parents to turn to the online channel to order “trusted” European brands that were sold out in-store. One of the latest threats in New Zealand could boost Internet retailing even more.

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New Zealand’s largest dairy producer, Fonterra, as well as Federated Farmers, are making efforts to reassure consumers that their products are safe after a blackmail threat was received to poison both companies’ infant formula. The letters threatened to contaminate infant formula with a poison known as 1080, used in pest control, as a protest to stop the country from using it. Biodegradable 1080 poison is the only toxin currently registered for use on mainland New Zealand as suitable for aerial targeting of possums - a major conservation and agricultural pest.

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March 23, 2015

Threat on New Zealand Dairy as 1080 Infant Formula Contamination Scare Revealed

Erika SirimanneInsight by Erika Sirimane - Business Development Consultant

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On March 10th 2015, the New Zealand Police and the Ministry for Primary Industries held a joint press conference to announce that Fonterra Co-operative Group Ltd and the Federated Farmers advocacy organisation received letters in November 2014 threatening to contaminate infant formula and other products if New Zealand did not stop using the pesticide 1080 by the end of March 2015. 1080, a pest control chemical compound commonly used by the Department of Conservation to control possum and rodent populations, represents a contentious issue in New Zealand, with the use often supported by conservationists and livestock farmers, but typically opposed by residents living in 1080 aerial-drop zones.

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March 22, 2015

A Bittersweet Future for Sugar Consumption in Packaged Food

Jack SkellyAnalyst Insight by Jack Skelly - Research Analyst

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At the start of the last century, most people worried whether they’d be able to put food on their plate: today, they’re more concerned about whether their plate has too much food. Almost every day, there are cautionary tales regarding the health risks of consuming excessive calories, fat or sugar. A modern-day version of Oliver Twist would likely be clinically obese rather than going hungry.

In Western Europe and North America, there is subsequently more pressure on soft drink and confectionery manufacturers to act responsibly. In the UK and US, there has been much effort by companies to reformulate their products, with Mars, Mondelez and Nestlé all aiming to reduce the calorie content within their countlines. As data from Euromonitor International’s Nutrition research demonstrates, many chocolate bars sold in the UK now meet a voluntary target of less than 250 calories per pack. However, will continuing concerns regarding sugar consumption affect sales?

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March 20, 2015

Case Study: Identifying Potential Targets for Milk Products after the end of EU Milk Quotas

At the end of March 2015, the European Union will abolish milk quotas, meaning EU member states are no longer restricted on the amount of milk they can produce. This increased output means a likely oversupply of milk. Using Passport and Euromonitor's Competitor Analytics system, Euromonitor identifies key markets, categories and companies that ingredients suppliers should target.

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March 11, 2015

Euromonitor participa da Vitafoods South America 2015

Vitafoods-SA

Nome do Evento: Vitafoods South America 2015
 
Data e local: 24 e 25 de Março de 2015 - Transamerica Expo Center, São Paulo, Brasil
 
Data da apresentação: 13h30-14h20, 24 de Março
 
Descrição do evento: Vitafoods South America é o caminho para fazer negócios na indústria de funcionais e nutracêuticos da América do Sul
 
Descrição da apresentação: Renata Benites Martins, analista da Euromonitor International, apresenta “Tendências em Funcionais: onde estão as oportunidades e o que o consumidor está buscando?”

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March 8, 2015

New Technologies to Spell the End of Stevia?

Simone_BarokeAnalyst Insight by Simone Baroke - Contributing Analyst

Next year, a new generation of stevia sweeteners produced by fermentation instead of extraction is going to hit the market. In other words, the leaf of the stevia plant will soon be surplus to requirements. On the one hand, this is great news for the industry: it will save costs and provide a more consistent product with a superior taste profile. But it also means that stevia’s already wobbly status as the only “natural” low-calorie sweetener is about to be thrown into even greater jeopardy. 

Stevia sweeteners 2.0

In February 2015, US agricultural and food products giant Cargill announced that its food ingredients arm, in collaboration with Swiss food technology company Evolva Holding SA, had successfully developed a method of producing stevia sweeteners by means of fermentation, thus foregoing the laborious process of extracting them from the leaf of the Stevia rebaudiana plant. The product is expected to be ready for launch in 2016. 

Cargill is, of course, not the only ingredients player going down this route. US company Stevia First, for example, reported last year that it was working on developing microbial fermentation processes with the aim of producing steviol glycoside sweeteners. 

Continue reading "New Technologies to Spell the End of Stevia?" »

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Recent Posts

Why the Changing US Grocery Retail Market Underpins the Kraft and Heinz Merger

The Link Between Alcoholic Drink Consumption and Analgesics and Slimming Products in Latin America

Kraft and Heinz Merger a Cost Cutting Story

The Global Impact of the Kraft and Heinz Merger

E-Commerce in China Could Boom after New Zealand Infant Formula Poison Threat

Threat on New Zealand Dairy as 1080 Infant Formula Contamination Scare Revealed

A Bittersweet Future for Sugar Consumption in Packaged Food

Case Study: Identifying Potential Targets for Milk Products after the end of EU Milk Quotas

Euromonitor participa da Vitafoods South America 2015

New Technologies to Spell the End of Stevia?