Heinz’s Growth Prospects Under New Private Equity Ownership

Analyst Insight by Ildiko Szalai, Senior Company Analyst at Euromonitor International

Heinz, the world’s 13th largest packaged food manufacturer, is set to be taken over by two private equity firms, Berkshire Hathaway and 3G Capital, for US$28 billion. Under this new private ownership, with a strong financial boost Heinz could be in a good position to intensify its international growth, M&A activities and potentially realise its long-stated ambition to become a major global player in baby food. Although becoming part of one of the world’s most successful private equity groups offers good financial synergies, it cannot benefit from operational leverages in the same way if it was integrated with a food industry player.

The deal has already been approved by the board but still needs to be voted on by the shareholders. It is expected to be finalised during the last three months of the year. The high cost, which consists of the US$23 billion price and company debt of US$5 billion, reflects Heinz’s global reach, strong brand equity and consistently positive financial performances. For the fiscal year ending 30 April 2012, Heinz reported net sales of US$11.6 billion, up 9% on 2010. In line with its overall strategy to grow its emerging market presence, Heinz reported growth of 21% in these regions in 2011.

E960: Stevia May Be an Additive but Its Natural Sourcing Will Make It a Winner

Analyst Insight by Lauren Bandy, Ingredients Analyst at Euromonitor International

First, the challenge was its bitter aftertaste. Now, the natural status of stevia – one of the key features of the ingredient that sets it apart from other high intensity sweeteners - has come under fire, particularly in Western Europe. Given that stevia – or steviol glycosides - is classified as an additive, it cannot be called ‘natural’ in the EU, which could be seen as a threat to its success. Yet there is no sign that this is going to affect its performance in the region: newly published Euromonitor data shows that in 2012, Western Europe overtook China to make it the third largest market for stevia ingredients in the world, behind the USA and Japan.

Global Retail Food Packaging Reaches 1.8 Trillion Units in 2012

Over 2012, global retail volume sales of food packaging rose, reaching 1.8 trillion units. Flexible plastic’s position as the leading growth pack type will continue to 2017, drawing from broadening demand for low-priced confectionery, bakery goods as well as staples such as milk, yoghurt and noodles among emerging regions. Although mature countries do offer growth potential, Asia Pacific will lead the way with China accounting for 36% of unit gains, ahead of other BRICs and Africa/Middle East.

Hear Euromonitor Speak at the Food Technology and Innovation Forum

Date: 5-6, March, 2013
Location: The Burlington Hotel, Dublin, Ireland
Presentation Date and Time: 6, March, 14-14:40 

Speaker: Lianne Van Den Bos, research analyst at Euromonitor International, will present "Growth Opportunities Through Innovations in Health Food Product Development." She will explain how to capture new growth opportunities by developing successful natural product lines.

The Annual World Food Technology and Innovation Forum brings together world leaders in food research and development, food innovation, marketing and food technology to debate and shape the future of the food industry.

Key themes include:

• Understanding and communicating with the new consumers vis-à-vis the current economic crisis
• Using social media to create new consumer interaction and food innovation strategies
• New food research and development strategies
• Creating successful open innovation networks to stimulate fresh innovation
• New ingredient innovations
• Capitalising on the growth in premium and luxury food sales
• Strengthening the brand against private label competition
• Innovation in health food products

Please visit the Food Technology and Innovation Forum event website for more information.

Connect with us on Twitter! We'll be live Tweeting during our presentation and throughout the event!

@WTGFoodInnovate
#FoodInnForum
@Euromonitor 

Hear Euromonitor Speak at Gulfood 2013: Food Leaders’ Summit

Event dates: February 25-28, 2013
Location: Dubai World Trade Centre, Dubai, UAE, Openning Panel discussion
Panel Session Date and Time: Global Food Leaders' Summit, February 25, 14:15-14:45 

Topic: ‘Who is shaping the Future of Food? Big Business, Consumer or Public Policy?
Speaker: Sana Toukan, Research Manager, Middle East 

Sana Toukan, Research Manager, Middle East at Euromonitor International will join the opening panel session to discuss the powerful influence which consumer preferences exert on the future of food. 

Can the industry respond or is big business simply delivering its own agenda under a clever marketing smokescreen? Should governments intervene the vendor-buyer relationship, and if so, when and how? 

Please visit the Global Food Leaders' Summit event website for more information. 

Five Pack Types to Watch in the Food Packaging Industry in 2013

Analyst Insight by Rosemarie Downey, Global Head of Packaging Research at Euromonitor International

The food packaging industry showed a strong performance in 2012, and 2013 looks just as good; sales are forecast to grow a further 3%, with global retail packaging consumption set to reach 1.87 trillion units this year. As far as dynamic gains go, there’s an interesting mix of high performers to take note of for 2013 and beyond. Liquid cartons are well represented, both through the shaped liquid carton, forecast to be the fastest growing pack type this year, and through the brick carton.

Top Five Functional Trends for 2013: Emerging vs Developed Markets

Analyst Insight by Diana Cowland, Health and Wellness Analyst at Euromonitor International

Functional health and wellness products continue to be in high demand as consumer knowledge about the efficacy of ingredients spreads across the globe. Functional ingredients are associated with a wide range of health trends offering additional benefits beyond regular nutrition. The latest Health and Wellness research findings revealed that fortified/functional products are set to see a strong constant annual growth of 5% over 2012-2013, equivalent to US $11.5 billion globally.

According to Euromonitor International, the top five functional trends for 2013 include:

1. Desire for energy

2. Long-term weight control    

3. Probiotics: The year of US, China and Brazil

4. Preventative ageing

5. Heart-healthy emerging markets

Snack Products Benefit from the Super Bowl

The Super Bowl, which determines the yearly champion of the National Football League or the NFL, is often the most watched American television broadcast of the year and the second-largest day of food consumption in the US. The event calls for not just parties, but massive snacking. Categories such as chips and dip, nuts and beer can all expect a huge push on Super Bowl Sunday, as well as consumer food service outlets. Operators such as Pizza Hut and Taco Bell are prepping for the big game by offering Super Bowl themed box meals, which historically sell well during the event.

Watch this video on Youtube

Commodities Roundup: January 2013

The big news this month is sugar prices, which dropped in the intercontinental exchange since the beginning of the year. Output projections from the US Department of Agriculture are higher than normal, especially from Brazil, which is expected to produce 5 million more tonnes than last year. Francisco Redruello, Senior Foods Analyst at Euromonitor, also discusses wheat, corn, cocoa, and skim milk powder prices in this podcast.

Francisco Redruello is speaking at the 3rd Annual European Food Manufacturing & Safety Summit, 2013. 

Download as an MP3

New “Maintenance of Blood Sugar” EU Claim Opens Door to Targeting Metabolic Syndrome

Analyst Insight by Diana Cowland, Health and Wellness Analyst at Euromonitor International

The legalisation of the EU’s article 13.1 on 14 December 2012 has opened up new focus areas for functional food and drink, one of which is the maintenance of blood sugar levels. Spikes in blood glucose are linked with decreased satiety, cardiovascular disease and the “metabolic syndrome”. Although genetic predisposition undoubtedly plays a major role, the condition is ultimately triggered by lifestyle factors, such as the typical “Western” diet. The International Diabetes Federation (IDF) estimates that a quarter of the world’s adult population had metabolic syndrome.