This week saw a continued focus on M&A, as further evidence of the global trend towards consoidation in the sector emerged. The battle for Australia’s Warrnambool Cheese and Butter Factory rumbled on and Mexico’s Sigma launched a takeover bid for Spain’s Campofrio. Results from retailers in Europe and the US confirmed the ongoing impact of weak economic conditions, with Wal-Mart lowering its outlook and Ahold confirming domestic market share pressure. The UK’s Sainsbury’s once again managed to buck this trend, booking another sterling set of results. Meanwhile, snacks giant PepsiCo said that it will beef up investment in India as it looks to offset soft sales in developed markets with emerging market growth.
“Bega Cheese has a proven history of growing the workforces of, and investing in, the companies it acquires” – Bega Cheese executive chairman Barry Irvin details the group’s “final offer” for WCB.
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“Saputo‘s strategy in acquiring Warrnambool is to position Warrnambool as the centre of its operations in Australia and its main platform from which to service the demand for dairy products in the Asia Pacific region” – Saputo espouses competitive benefits of its improved WCB offer.
“We’ve built a highly successful business in India over the course of many years, and we believe we’ve only scratched the surface of the long-term growth opportunities that exist for PepsiCo and our partners” – PepsiCo chairman and CEO Indra Nooyi on the group’s plan to invest US$5.5m in India by 2020.
“The acquisition of Campofrio is consistent with Sigma’s long-term growth strategy and gives it the opportunity to expand its current market coverage in the Americas, to become a global leading refrigerated foods player” – Alvaro Fernandez, Alfa president, explains the rationale behind food unit Sigma’s bid for Campofrio.
“Our business model is to stick to the Nordics, understand those markets better than anyone else and then be the local champion. There will be private label, there will be multinational competition, and in between those two main competitors there is ample space for the well-founded competitive local provider” – Orkla chief executive Age Korsvold on the firm’s position as a regional powerhouse.
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By GlobalData“Market transformation can only happen if everyone involved takes responsibility and is held accountable for driving a sustainability agenda” – Unilever chief procurement officer Marc Engel on the firm’s sustainable palm oil drive.
“Industry volumes remain soft, raw milk cost increased and our transitory costs in production and distribution associated with the loss of volumes and plant closures were higher than we anticipated, resulting in an operating performance that was below our plan” – Dean Foods CEO Gregg Tanner details why the company’s performance missed expectations.
“Excluding the addition of new stores (C-1000 conversions), [Ahold domestic chain] Albert Heijn lost market share in Q3 (versus market growth of c. 2%). We estimate this was already the case in H1 but clearly less pronounced. It seems that especially Lidl (and a few smaller chains like EM-TE) are doing well and are picking up share from C-1000.” – Patrick Roquas, Rabobank analyst, highlights margin pressure impacting Ahold’s domestic business, news that forced down the group’s share price.
“We think it will be an own-label Christmas. The savvy shopper wants quality but doesn’t want to spend any more than is necessary” – Sainsbury’s CEO Justin King predicted following the group’s “strong” first-half numbers.
“The market conditions are tough, competition is fierce and our customers’ budgets are under intense pressure. We’ve continued to invest in lowering prices which has held them down for our customers while driving volume growth. This means we enter the crucial fourth quarter in a solid position.” – Asda CEO Andy Clarke commented on the tough UK trading environment as parent company Wal-Mart lowered its full year outlook.
