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J.M. Smucker to Shutter 4 Plants
3/25/2010

J.M. Smucker to Shutter 4 Plants

J.M. Smucker to Shutter 4 Plants

J.M. Smucker Co. is closing four plants, including one in North Texas, and cutting 700 jobs in the U.S. and Canada, the food maker said Wednesday.

The company, which makes Folgers Coffee, Smucker's jams and other products, is closing coffee plants in Sherman and in Kansas City, Mo., to consolidate production in New Orleans. The Sherman plant will close next spring, and Kansas City operations will cease in 2012, the company said.

It's also closing fruit-spread plants in Memphis and Ste. Marie, Quebec, and moving the bulk of its production to Orrville, Ohio, where the company is headquartered. Those plants will close in summer 2013.

Smucker inherited the one-story, 450,000-square-foot Sherman plant in 2008 when it acquired Folgers.

Sherman employs about 95, the smallest workforce among the four targeted plants.

Once the Sherman plant closes, Smucker's only Texas production facility will be in El Paso, where it makes Eagle brand condensed milk.

Smucker said it will spend $220 million over the next three years to build a plant in Orrville, improve facilities in New Orleans and upgrade equipment and technology at its Ripon, Wis., plant to support the changes.

Tim Smucker, chairman of the board and co-CEO of the company, said the consolidation is important for long-term growth. The company expects to save $60 million annually, excluding one-time costs, when the transition is complete.
Kraft Names Chambers Head of North America Gum, Candy Businesses
3/19/2010

Kraft Names Chambers Head of North America Gum, Candy Businesses

Kraft Names Chambers Head of North America Gum, Candy Businesses

Kraft Foods Inc. in an internal memo named a former Cadbury executive, Jim Chambers, to head its confectionery and gum businesses in North America.

Mr. Chambers was named president of confectionery and general manager for the Immediate Consumption Channel for Kraft Foods North America. Growing the newly acquired and lucrative gum business in North America and pushing its own brands into new locations in convenience stores is a key part of Kraft's strategy on the acquisition.

Mr. Chambers will oversee such Cadbury brands as Trident gum and Halls in the region, among other offerings within the newly combined company.

Kraft's integration of Cadbury involves deciding which top executives from both companies will stay on and in what roles. It is being closely watched because the company now faces the challenge of melding together two large businesses and drawing sufficient cost savings and growth to justify the $19 billion acquisition of the U.K. chocolate maker.

Mr. Chambers will report to Kraft's current president of North America, Tony Vernon.
GMA Appoints Turner VP of Industry Affairs
3/18/2010

GMA Appoints Turner VP of Industry Affairs

GMA Appoints Turner VP of Industry Affairs

The Grocery Manufacturers Association (GMA) yesterday appointed Todd A. Turner to the position of VP of industry affairs, in which role he will lead the day-to-day operations of the industry affairs department and efforts in the sales and supply chain and technology practices. He will report to Stephen Sibert, SVP of industry affairs.

“[Turner] is a veteran of the retail and CPG industries, with a proven track record of providing first-rate member service as an association executive,” said Sibert. “He is well equipped to help food, beverage and consumer product manufacturers deliver on their promise to provide safe, healthy and affordable products to consumers.”

Before joining GMA, Turner was VP of membership and urban affairs at the Food Marketing Institute (FMI), where during his 14-year tenure he helped boost dues revenue by 40 percent, generated $1.7 million in additional revenue by establishing an associate member program and developed an industry-wide supplier diversity program.

His previous experience also includes a stint at the Joint Center for Political and Economic Studies, a think tank focused on the study of issues affecting African-American families, and a pharmaceutical sales position at Merck and Pfizer.

The Washington-based GMA represents food, beverage, and consumer products companies, and promotes sound public policy, champions initiatives that increase productivity and growth, and helps ensure the safety and security of consumer packaged goods through scientific excellence.
TreeHouse closes acquisition of Sturm Foods
3/2/2010

TreeHouse closes acquisition of Sturm Foods

TreeHouse closes acquisition of Sturm Foods

TreeHouse Foods Inc. said Tuesday that it has completed its $660 million acquisition of Sturm Foods Inc., a private label manufacturer of hot cereal and powdered soft drink mixes in Manawa in Outagamie County.

Westchester, Ill.-based TreeHouse financed the acquisition through the closing of its previously announced offerings of $400 million in aggregate principal amount of 7.75 percent senior notes due 2018 and 2.7 million shares of common stock at a price of $43.00 per share. TreeHouse financed the remainder of the purchase price under its existing revolving credit facility.

TreeHouse Foods chairman and CEO Sam Reed has said that the acquisition of Sturm will give TreeHouse leadership position within the private label hot cereal and powdered soft drink mix categories.

Sturm had sales of $340 million for the 12 months ended Sept. 30. Following the acquisition, TreeHouse will have sales of about $1.9 billion and adjusted earnings before taxes and expenses of more than $275 million. TreeHouse has said it expects the addition of Sturm to boost annual earnings by more than 16 percent, adding 38 to 40 cents per share.

Founded in 1905, Sturm Foods has 750 employees and operates three facilities in Manawa. The company sells to both retail and food service customers. The bulk of its product portfolio is evenly mixed between hot cereals and powdered soft drink mixes. The remainder of its portfolio consists of other dry mix products.

TreeHouse (NYSE: THS) is a producer of pickles, nondairy creamer, soups, sauces and condiments. Bay Valley Foods, a manufacturer of powdered creamer, pickles, condiments and other food products with operations in Green Bay, is the major operating division of TreeHouse Foods.
Merck Agrees To Acquire Millipore for $7.2 billion
3/1/2010

Merck Agrees To Acquire Millipore for $7.2 billion

Merck Agrees To Acquire Millipore for $7.2 billion

German drug and chemical conglomerate Merck KGaA said Sunday it has agreed to buy U.S. laboratory and biotech supply company Millipore Corp. in a deal valued at $7.2 billion, including assumption of debt.

The news came days after Millipore, which makes products to help develop and process drugs, said it was evaluating strategic alternatives.The company posted $1.65 billion in revenue last year.

The deal would expand Merck's presence globally, as Millipore, based in Billerica, Mass., does most of its business outside the U.S., including 40% in Europe. It also will help Merck diversify its business away from pharmaceuticals. Days ago, the company, which isn't related to Merck & Co. of the U.S., issued a downbeat 2010 outlook that underscored how the high cost of bringing drugs to market would eat into profits this year.

A news report last week said Thermo Fisher Scientific Inc., a heavyweight in the laboratory-supply sector that analysts said would benefit from adding Millipore, had made an unsolicited $6 billion takeover offer for the company. Thermo Fisher didn't confirm this, and a spokeswoman on Sunday said the company would not comment on the Merck-Millipore deal.

In a statement, Merck said it would pay $107 per share, cash, for each Millipore share. That represents a 13% premium to Millipore's closing price of $94.41 on Friday, and a 50% premium to where Millipore traded a week earlier, before consolidation speculation took hold. At the end of December, Millipore's long-term debt stood at $890.2 million.

Merck expects the combined business to generate annual cost savings of about a €75 million ($100 million) within three years of closing the deal, which the company forecast will happen in the second half of this year. It said it will fund the transaction through available cash and a term loan.

Merck said the two companies would create a €2 billion entity for the life sciences sector.

The deal is in line with Merck's strategy of focusing on "high-margin specialty products with an attractive growth profile," the company said. By tucking Millipore into its chemicals business, that unit will generate 35% of the company's revenue, up from 25% today.

Millipore has two units: one makes products used in life-science research and development, and the other makes products to help process pharmaceutical and biotechnology drugs.

Merck, which posted revenue of €7.7 billion last year, sells drugs for cancer, neurodegenerative diseases, autoimmune diseases and fertility. It also has a consumer health business and a chemicals business that makes products like liquid crystals for televisions, among others.

The deal will allow Merck to "cover the entire value chain for our pharma and biopharma customers, offering integrated solutions beyond chemicals," said Karl-Ludwig Kley, Merck's chairman, in the statement.

Merck said it expects the transaction will gain regulatory approval. The deal requires antitrust clearance along with approval from Millipore shareholders.
Diamond Foods to buy Kettle Foods for $615 million
2/26/2010

Diamond Foods to buy Kettle Foods for $615 million

Diamond Foods to buy Kettle Foods for $615 million

The acquisition, expected to close by the end of Diamond Food's fiscal year ending July 2010, will be funded through a new five-year $600 million credit facility, an equity offering and available cash, the company said in a statement.

Diamond expects the deal to add to earnings in fiscal 2011 and add more than $250 million in revenue.

Assuming the transaction closes before the fiscal year 2011 begins, the company expects full-year earnings of $2.25 to $2.35 a share.

Diamond Foods also reported second-quarter earnings that edged past estimates, helped by strong snack demand.

The company also raised its full-year outlook and now expects earnings per share of $1.79 to $1.83 a share on net sales of $595 million to $610 million.
Coke to buy Coca-Cola Enterprises Inc.'s North American operations
2/25/2010

Coke to buy Coca-Cola Enterprises Inc.'s North American operations

Coke to buy Coca-Cola Enterprises Inc.'s North American operations

In a strategic about-face driven by big changes in consumer tastes, Coca-Cola Co. was nearing a deal late Wednesday to buy the bulk of its largest bottler, according to people familiar with the matter.

As part of the deal, Coke would buy Coca-Cola Enterprises Inc.'s North American operations, the people said. The rest of the bottler, which consists of operations in several European countries, would remain independent and acquire Coke bottling operations in Scandinavia and Germany.

While exact terms of the transaction could not be learned late Wednesday, the deal's value could be approximately $12 billion to $13 billion, including equity and assumed debt, said one person familiar with the matter.

A Coke deal would mark a major change in the strategy the company has pursued for decades—setting up large, independent bottlers run separately from Atlanta-based Coke itself. It would also come as PepsiCo is about to close acquisitions of its two largest independent bottlers, putting pressure on Coke to make a similar move to gain the same competitive advantages PepsiCo stands to reap. The anchor bottler strategy worked well for Coke in the 1980s and 1990s when consumers were drinking increasingly more soda that was shipped in high volumes.

But since then, the interests of Coke and its bottlers have diverged, as the drinks giant seeks to adapt to consumers moving away from soft drinks to more niche, noncarbonated offerings. Owning a bottler would give Coke flexibility. It could decide to distribute through its bottling system, through which products are delivered directly to stores. Or it could deliver drinks through warehouses, which is cheaper and preferable for products too small or not profitable enough to distribute cost effectively through the more expensive "direct store delivery" system.

For Coke's everyday consumers, the deal potentially could mean lower prices, with some costs of distribution eliminated, and a wider variety of drinks, including niche products, in stores as the company gains greater distribution flexibility, according to industry experts.

Any deal could prove risky. A marketing and branding company, Coke could be distracted by taking on bottling drinks in a huge market. The net effect on its balance sheet is unclear: It would not only absorb bottling assets, but also potentially spin off others that it currently owns in Scandinavia and Germany as part of the deal. Coke owns several of its bottlers around the world, also including bottlers in Brazil, India and China.

PepsiCo announced last April that it aimed to subsume Pepsi Bottling Group Inc. and PepsiAmericas Inc. Pepsi said the $7.8 billion deal will allow it to have greater control over development, distribution and marketing of new products with the acquisitions, which are expected to close Friday.

Owning its bottlers allows PepsiCo to negotiate alone with retailers, rather than sharing that task with representatives of separately publicly traded bottlers.

The boards of both Coke and CCE were expected to meet Wednesday evening to approve the transaction. It is still possible the deal could be revised or fall apart at the last moment, said the people familiar with the matter. A Coke spokesman declined to comment. A CCE representative did not immediately respond to requests for comment.

CCE represents 16% of Coke's volume world-wide and is the primary bottler for the U.S. and Canada. Last year, the North American operations accounted for 70% of CCE's net operating revenues, with the remainder coming from Europe.

In Europe, the company's territories include Belgium, continental France, the U.K., Luxembourg, Monaco and the Netherlands. The deal under consideration would likely keep these operations inside a publicly traded CCE, with Coke swapping some of its own European bottlers into the company.

Shares of Coke were little changed in 4 p.m. trading Wednesday on the New York Stock Exchange at $55.16. CCE stock fell less than 1% to $19.18 on the Big Board, giving it a market value of $9.4 billion. In after-hours trading, CCE shares jumped 25% on the news.

After setbacks earlier in the decade, Coke's sales have recovered globally in recent years under former Chairman and CEO E. Neville Isdell, who retired last April, and current Chairman and CEO Muhtar Kent. Its stock is up 40% since sinking to $39.15 in October 2004. CCE's stock is about where it was in October 2004, though it has recovered after hitting close to $8 in November 2008.

For Coke, the deal would represent a partial reversal of a strategy it pioneered in the mid-1980s. Worried about losing control over its disparate bottlers, Coca-Cola's chief financial officer at the time, M. Douglas Ivester, forged a plan to create big, publicly traded "anchor bottlers" such as CCE in which it would own a large stake—up to 49%—while keeping the bottlers' assets off its books.

CCE went public in 1986. Coke remains its largest shareholder, with a 34% stake as of the end of last year.

That bottling system allowed Coke to build a network of anchor bottlers around the globe, maintain a powerful influence with large stakes, and generate an additional profit stream by buying up small bottlers and then selling them to the new anchor bottlers. But by the late 1990s, some of the big bottlers also became a problem for Coke, saddled with debt from acquiring small bottlers and new equipment.

Broader changes in consumer habits have also put pressure on the bottling system in the U.S., which was traditionally geared toward manufacturing and selling carbonated soft drinks rather than the types of drinks that are growing faster these days, like "enhanced water," or bottled water with vitamins and flavors.

When PepsiCo Chairman and CEO Indra Nooyi launched that company's similar move in April, she said owning the two bottlers would give it the flexibility to decide how its beverages should be distributed. As the industry moves from a heavy reliance on carbonated soft drinks into water, juice, teas and other noncarbonated drinks, some soft-drink bottlers don't have the equipment to manufacture the noncarbonated drinks and many are sold in small volumes. "We can accelerate revenue growth and be more agile and flexible," Ms. Nooyi said at the time.

PepsiCo has said it expects to save $400 million by 2012 from the deals. But Bill Pecoriello, chief executive of ConsumerEdge Research LLC, believes the company may actually reap more than $600 million.

PepsiCo hasn't yet laid out specific changes it plans to the way it delivers its drinks. But according to Mr. Pecoriello, the company is likely to move some of the distribution of its Gatorade sports drink from an outside operator to its bottling system, which will save it money.

Since PepsiCo announced its plan to acquire Pepsi Bottling Group Inc. and PepsiAmericas Inc., Mr. Kent, the Coke CEO, has staunchly defended Coke's system of maintaining independent bottlers, calling it "still the best way to win in the marketplace."
Merck Consumer Health appoints Bridgette Heller President
2/16/2010

Merck Consumer Health appoints Bridgette Heller President

Merck & Co., Inc. announced the appointment of Bridgette P. Heller as Executive Vice President and President, Consumer Health Care. Ms. Heller will succeed Stanley F. Barshay, who had postponed his planned retirement to serve in a transition role following the merger of Merck and Schering-Plough. Effective March 1, 2010, Ms. Heller, 48, will report directly to Richard T. Clark, Merck's chairman, president and chief executive officer, and will serve on the company's Executive Committee.

As leader of Consumer Health Care, Ms. Heller will leverage Merck's consumer products brands to capitalize on new growth opportunities, including expanding the consumer business in markets outside the United States. Merck's Consumer Health Care division is home to a variety of household names, including, among others, AFRIN, CLARITIN, COPPERTONE, DR. SCHOLL'S, MiraLAX and LOTRIMIN. Each day, millions of people count on one or more of Merck's industry-leading brands that help prevent or treat various common conditions.

"We are extremely pleased to welcome Bridgette as the leader of our Consumer Health Care division," said Mr. Clark. "While the Consumer Health Care business already has an established presence around the world, it also represents an attractive growth opportunity for Merck. Bridgette has an impressive track record of leading multi-billion dollar businesses, as well as exceptional marketing acumen, both of which will serve her well in leading growth initiatives for Merck's consumer business."

"This is an exciting time to join the new Merck, with its focus on the consumer health care sector," said Ms. Heller. "I look forward to working with the talented team throughout this division to pursue growth through enhanced innovation, creative research and development and improved products in our Consumer Health Care business."

Ms. Heller most recently served as President of Johnson & Johnson's Baby Global Business Unit since 2007 and prior to that she was Johnson & Johnson's Global President, Baby, Kids and Wound Care. While at Johnson & Johnson, Ms. Heller led a global team across all functions of the business unit with worldwide revenues of over $2.5 billion.

Before joining Johnson & Johnson Ms. Heller was founder and managing partner at Heller Associates from 2004-2005, where she provided consumer-centric growth strategies for companies outside of the traditional consumer packaged goods arena. Previously, Ms. Heller provided hands-on leadership as Chief Executive Officer and Chairman of the Board of Chung's Gourmet Foods, the second largest U.S. egg roll manufacturer. And before that Ms. Heller served as Executive Vice President and General Manager, Coffee Division at Kraft Foods, Inc. where she had full P&L responsibility for the largest coffee portfolio in the U.S. with $1.5 billion in revenues. In this capacity, Ms. Heller operated across multiple sales channels, including grocery, specialty retailers and direct-to-consumer and directed an internal organization of 500 employees across four manufacturing facilities, and an additional 550 employees from three outsourcing partners. Prior to that, Ms. Keller held a variety of managerial roles at Kraft since 1985.

Ms. Heller received an MBA from the J. L. Kellogg Graduate School of Management at Northwestern University and received her B.A. from Northwestern University.
Robert Conley joins Evenflo as President
2/10/2010

Robert Conley joins Evenflo as President

Robert Conley joins Evenflo as President

Evenflo Company has appointed Robert Conley as president, effective Jan. 25.

“Rob is a long time industry executive with extensive knowledge of the baby and juvenile product markets,” said Evenflo CEO Perry Odak. “In addition, his experience throughout North America, South America and Asia will be vital as we further expand our business globally.”

Conley’s most recent position was CEO of the Chinese manufacturer Kingstar, one of Evenflo’s major suppliers. He was previously vice president of sales and marketing for Graco; president of NOJO, an infant bedding company; and president of Combi, a Tokyo-based juvenile company.

“Evenflo is a company with a proud, 90-year tradition of quality that I am thrilled to be part of during these exciting times,” said Conley. “As we continue to introduce innovative, industry-leading products, I look forward to scaling new heights and seizing new opportunities in the years ahead.”

Conley will be based at the firm’s Miamisburg headquarters, and report to Odak.

Evenflo is a privately-held manufacturer and marketer of infant and juvenile products. The company’s product offering spans a broad range of essential infant and juvenile product categories, including car seats, travel systems, infant and toddler feeding, carriers, stationary activity centers and home safety products.
Ben & Jerry's CEO resigns
2/10/2010

Ben & Jerry's CEO resigns

Ben & Jerry's CEO resigns

Ben & Jerry's CEO and Vice President of Global Brand Development Walt Freese is resigning, the ice cream company announced Tuesday.

Freese joined the company, now owned by Unilever, which is based in the Netherlands, more than 8 years ago, according to a company statement.

He plans to pursue other business and investment opportunities but will continue to lead the Vermont company through March.

''Walt has done an outstanding job,'' John LeBoutillier, Unilever's senior vice president of foods in the U.S.

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Kraft Names Chambers Head of North America Gum, Candy Businesses

GMA Appoints Turner VP of Industry Affairs

TreeHouse closes acquisition of Sturm Foods

Ben & Jerry's CEO resigns

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