Around the Food Industry

Frito-Lay to Target Women

Snacking has long been seen as guy turf, but PepsiCo's Frito-Lay division is looking to introduce Smartfood popcorn clusters, its first snack targeted specifically at women. The snacks will be a combination of sweet & salty, and are being touted as a source of fiber and calcium. In addition, the snacks will contain no artificial colors, flavors or preservatives, and will be packed in 120-calorie individual bags. PepsiCo's CEO, John Compton, anticipates $650MM in sales to women. Additionally F-L will be concentrating on more "healthier for you" offerings.

New British "Dating Service" For Waste

The London Waste and Recycling Board was launched last July to broker waste producers (food manufactures & retailers) with recyclers and energy users to help encourage innovation in waste disposal. The goal is to help generate energy through anaerobic digestion and improve recycling of waste materials. Estimates boast supplying up to £504MM 10% of London’s gas and electricity costs. The move comes as the British Retail Consortium (BRC) has appealed to government to encourage recycling rather piling on new costs to retailers as is the usual solution. A new report from the Local Government Association (LGA) is lobbying for supermarkets to pay for recycling services to reduce the £1.8bn spent on waste removal and landfill through 2011. Reports show up to 40% of food packaging in the U.K. could be recycled. Retailers counter that consumers often have no way to recycle the packaging materials at the local level. In the U.S., recycled materials have piled up without adequate end users for the material, resulting in localities now accepting only limited amounts of recyclable plastics.

Nestlé Income Waaaay Up

In a further sign of food companies weathering the current economic storm, net profit for Nestlé climbed 69% for 2008 to 18bn Swiss francs ($15bn), up from 11MM Swiss francs in 2008. Sales for the year were 109,909MM Swiss francs ($93.596MM), up 2% from 107,552MM Swiss francs during the previous year. "Zone Americas" was the company’s engine for growth, with sales of 33,134MM Swiss francs ($28,209MM), a 10.3% growth rate with 2.7% real internal growth. Nestlé committed to 5% growth during the coming year, based largely on its prediction of leveraging its innovation and strong core brands.

Unilever Focusing – Again – on Volume

Buffeted by bad publicity surrounding a Belgian grocery chain's decision to pull its products for "excessive profits," Anglo-Dutch giant Unilever has announced its intention of focusing on volume in 2009 according to CFO Jim Lawrence. Volume actually fell in the 4th quarter of 2008, and investors generally like to see top-line sales always inching upwards. But as usual wholly lacking in fresh ideas, the company says it will consider bringing down prices by putting out smaller packages. No surprise for a company who many critics argue ruined the Ben & Jerry's brand after it purchased the property, then (despite promises to leave well enough alone) tried to run it like any other brand in their portfolio. Unilever also once turned down a snack licensing opportunity our company brought them that could have generated 7-figure royalties in favor of co-packing the product at a net loss. In true conglomerate fashion, the company eventually did nothing with the opportunity.

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