Hershey today (19 June) announced plans to cut 300 jobs as part of fresh efforts to improve productivity and make the company "more flexible". It also cut its 2015 sales forecast for the second time this year – and its earnings guidance for the first time – amid continued challenges in China. Elsewhere this week, we kicked off our latest management briefing, which look at the sustainability of agricultural supply chains. And Ferrero found itself under fire from a French government minister, who claimed the way the company sourced ingredients for Nutella was hurting the environment.
"Macro-economic challenges and trends are affecting consumer shopping behaviour resulting in continued softness within the China modern trade, particularly the tier one hypermarkets where the company generates the majority of its chocolate sales" – a lowering of Hershey's expectations for 2015 in China is a factor in its move on Friday to lower its group sales and earnings targets for the year. The company had already cut its sales guidance once this year on the back of lower-than-expected sales in China.
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"Removing cost and complexity from our business will make us more flexible to quickly react to changing consumer and competitive marketplace trends" – and Hershey chairman, president and CEO J.P. Bilbrey explains why the US confectionery giant, in a second announcement, has outlined a "new productivity initiative" – which lead to the loss of around 300 jobs by the end of the year.
"These smallholder farmers are among the poorest people in the world and it's our duty to help them be more successful" – Barry Parkin, chief sustainability officer and health & wellness officer at Mars Inc., says food companies explains why the company has, with Danone, set up a fund to support farmers.
"We must stop eating Nutella, for example, because it's palm oil which has 'replaced' trees and there has been considerable damage….They need to use different raw materials" – France's Environment Minister, Ségolène Royal, appeals to consumers to stop eating Nutella to help protect the Earth's eco-systems – and then swiftly apologises for her comments.
"It just makes immeasurably different impacts compared to an Oxfam coming out and calling for something. We need that business voice" – Erinch Sahan, private sector policy advisor at Oxfam, supports recent industry and investor criticism of the Roundtable on Responsible Palm Oil.
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By GlobalData"APHIS has observed sharing of equipment between an infected and non-infected farm, employees moving between infected and non-infected farms, lack of cleaning and disinfection of vehicles moving between farms, and reports of rodents or small wild birds inside poultry houses" – The US Department of Agriculture has alleged industry practices may have contributed to the spread of bird flu across the US.
"Antibiotic resistance is predicted to cause one million deaths across Europe by 2025. This discovery is the latest warning that overuse of antibiotics on farms is posing a risk to human health" – The Alliance to Save Our Antibiotics says UK consumers are being exposed to MRSA in pork and warns of the dangers of an overuse of antibiotics on farms.
"Consumer products and retail companies in particular are extending caution in their M&A planning by focusing on the lower middle market, despite the trend toward a small number of big ticket acquisitions" –EY advisor Gregory Stemler explains how the industry is weighing up its M&A targets.
"We see lots of opportunity," he said. "This brand is really developing in the middle part of the US. We see a lot of opportunity on both coasts. The Campbell Soup Company, as well as Bolthouse Farms, has got great national relationships with grocery customers, as well as Costco and mass, so just spreading that distribution out across the country evenly would be tremendous upside" – Campbell Soup Company's Todd Putman comments to just-food about the firm's latest acquisition of salsa-to-houmous maker Garden Fresh Gourmet.
"Maybe we’ll even see [Vega] experiment with complete meal solutions like powdered drinks offered by Soylent which has attracted a cult following as a complete replacement for food for people that are too busy to cook or even prepare a simple meal" – Tom Vierhile, analyst at Datamonitor suggests some of the possible innovations WhiteWave could look to after acquiring Vega.
