Unilever boss Paul Polman in management reshuffle

Paul Polman, the new boss of consumer goods giant Unilever, has moved to stamp his authority on the company by unveiling a management reshuffle.

Mr Polman told employees he wants Unilever's major divisions and locations to benefit from leaders who "deeply understand the power of bringing innovation to the market place".

Mr Polman took up his role as chief executive of Unilever, whose products include Pot Noodles, Persil washing powder and Vaseline, at the beginning of this year and has already made significant changes.

Earlier this month, as Unilever posted annual results, he refused to set out guidance for the company's prospects in 2009. He said forecasts would be "inappropriate" given the "exceptional times we live in", but investors reacted coolly to the decision and the shares have fallen almost 10pc since.

As part of the restructuring of the company's management, Mr Polman has moved to bolster the finance team by appointing Henning Rehder, currently chairman of Unilever in Germany, Austria and Switzerland, to senior vice-president finance for categories and research & development, and Robert Etman to senior vice-president finance global supply chain.

"It is absolutely crucial that we strengthen our supply chain capabilities to win in market," wrote Mr Polman. "We are currently not at par with competition."

Other changes include Kevin Havelock moving from president Unilever North America to executive vice-president global ice cream, and Arun Adhikari, group vice-president for North East Asia, becoming senior-vice president laundry Asia AMET (Africa, Middle East and Turkey).

John LeBoutillier, the general manager of ice cream US, will take up Mr Havelock's former role, while Alan Jope, at present the general vice-president SCC (spreads and cooking category), becomes executive vice-president greater China.

"Increasingly a strong CD [customer development] and/or marketing background will be required from our cluster leaders to ensure that brand and category positions are built again and we consistently grow share," Mr Polman told staff. "Our appointments reflect this."

The reshuffle, to be implemented in April, follows a focus on cutting costs since Mr Polman's arrival.

The company – which owns 13 brands that generate more than €1bn (£896m) in annual sales – has frozen salaries across the group, plans to reduce business travel by 30pc this year, and will align bonuses more closely with performance.

"With most – but not all – of the restructuring efforts behind us, we now need to firmly focus on the growth agenda for the organisation," Mr Polman added. "A key part of this will be driven by the strength of our innovations which have to become bigger, bolder and better; but also by our ability to translate these into in-market success."

Interstate Bakeries moving its HQ to Dallas

Interstate Bakeries Corp., one of Kansas City’s best-known companies, is moving its headquarters to Dallas now that it has emerged from 4 1/2 years in bankruptcy.

An Interstate spokesman said being based in Dallas will make it easier for the maker of iconic brands such as Wonder Bread and Hostess Twinkies to find the talent needed to move the company forward.

Interstate was founded in Kansas City nearly 80 years ago.

“A larger metropolitan area like Dallas will provide the company with a number of benefits, including access to a broader base of senior level executives with experience in the packaged consumer goods industry, which are needed for its success in rebuilding after emerging from Chapter 11,” said Interstate spokesman Lew Phelps.

The move involves only 20 positions, about 10 top executives and their support staff, Phelps said. That will leave close to 200 people at the current headquarters at 12 E. Armour Blvd.

“The company intends to continue to maintain a strong presence in Kansas City and looks forward to continuing to be a part of the Kansas City community, as it rebuilds and grows,” Phelps said.

There are about 200 employees at the corporate headquarters now. After the headquarters move in the next couple of months, some positions that were left vacant during the bankruptcy will be filled, returning the total close to 200, Phelps said.

The company has a total of roughly 600 employees in the area, including a plant in Lenexa and other operations.

The company exited bankruptcy Feb. 3. Before filing bankruptcy in 2004, the company was the largest wholesale baking company in the U.S. and one of Kansas City’s few Fortune 500 companies.

Many members of Interstate’s senior management, including Chief Executive Craig Jung, came to the company during its restructuring. Jung, who was hired in February 2007, previously was CEO of Panamerican Beverages, the third-largest Coca-Cola bottler in the world, covering seven Latin American countries.

Interstate is now controlled by New York investment firm Ripplewood Holdings, which made an investment of $130 million to take ownership of the company.

With the acquisition Ripplewood put two of its partners, Greg Murphy and John Cahill, on the Interstate board. Murphy had been president and chief executive of Kraft Food Bakery Cos. Cahill was previously chairman, president and chief executive of The Pepsi Bottling Group. Pepsico’s Frito Lay is based near Dallas.

Interstate was created in 1930, when Kansas City’s Schulze Baking Co., owned by Roy Nafziger, merged with a group of seven West Coast bakeries managed from Los Angeles.

Sara Lee Beverage Unit appoints JP Schretlen as its new Chief

Sara Lee Corp. today appointed Jan Pieter (JP) Schretlen to vice president and general manager for its foodservice beverage unit.

Schretlen, 37, will lead all aspects of Sara Lee Foodservice business development for beverage in North America. His leadership of the beverage business team will drive innovation behind key initiatives including ongoing investment in the company's liquid-coffee solutions and its line of sustainably produced coffee under the Good Origin brand. He will report to Tom Hayes, president, Sara Lee Foodservice.

"JP has significantly contributed to our position as industry leader in beverage," Hayes says. "His dedication to innovation and deep understanding of customer needs will further enable Sara Lee to help them feed their bottom line."

Schretlen previously held the title of commercial director of business and industry for Douwe Egberts Coffee Systems in the Netherlands. He joined the company in 1995 and has since held marketing and sales positions within the company's international beverage business, including managing the Douwe Egberts brand in the Netherlands and serving as the general manager of Laurentis, the Dutch market leader in espresso.

Board Chair Wolfe Resigns; Nevels Elected to Be Chairman

The Hershey Company today announced that Kenneth L. Wolfe, the Company's non-executive Chairman of the Board of Directors, has resigned from the Company’s Board of Directors effective immediately.   Mr. Wolfe, who was the Company’s Chairman and Chief Executive Officer from 1994 to 2001, served as non-executive Chairman since November 2007. He decided to step down following a request from the Hershey Trust Company, trustee of the Milton Hershey School Trust, the Company’s controlling stockholder, that he not stand for re-election at the Company’s annual meeting of stockholders on April 30, 2009. The Trust indicated that, consistent with the Company’s historic governance model, it wanted to have one of its representatives on the Board serve as Chairman of the Board.   The Board announced its unanimous election of Director James E. Nevels to succeed Wolfe as non-executive Chairman of the Board of Directors. “Ken Wolfe came out of retirement to serve the company he loves, at an hour when his service was greatly needed,” Nevels said. “Ken has helped to stabilize the Company’s performance and to establish a foundation for future growth, and the entire Board is deeply grateful for his service. I aspire to mirror Ken’s excellence in his service to the Board, the Company and all its shareholders. I look forward to working with my colleagues on the Board and with the Company’s management to execute our strategic plan and build upon our recent improving marketplace and financial performance.”   “On behalf of the employees of The Hershey Company, I echo Jim’s gratitude to Ken for his many years of outstanding service,” said David J. West, President and Chief Executive Officer, The Hershey Company. “I have worked with Jim in various capacities for a number of years. Moving forward, we will continue to work to sustain our momentum and build value for all shareholders.”   Nevels has served on the Company Board since November 2007. He also is a director of Tasty Baking Company, the Pro Football Hall of Fame, and the Hershey Trust. Nevels is Chairman of The Swarthmore Group, one of the nation’s largest minority-owed investment-advisory firms, which he founded in 1991. Nevels will be the first African-American Board Chairman in The Hershey Company’s history.

Welch’s names Brad Irwin as President & CEO

Brad Irwin has been named president and chief executive of Welch's, effective Feb. 16, the Concord-based marketer of Concord and Niagara grape-based products said today.

Irwin will succeed David J. Lukiewski, who retired in October, a Welch's spokeswoman said.

Irwin's most recent position was president of Cadbury Adams North America LLC, the confectionery business unit of Cadbury Schweppes plc, and Irwin's resume includes a 20-year stint with Procter & Gamble Co., the consumer products giant.

"The addition of Brad Irwin as president & CEO comes during an important time for Welch's," Joe Falcone, chairman of the board and president of National Grape Cooperative Inc., said in a statement. "We're continuing to build relevance with consumers. Brad's experience with other consumer-based brands and proven organizational leadership will be crucial in helping drive our business forward successfully."

Unilever to Buy TIGI Hair-Care Business

Unilever agreed to buy the TIGI professional hair-product business and its hair-care schools for $411.5 million from the owners of Toni & Guy hair salons.

Unilever, whose products include Ben & Jerry's ice cream, Hellmann's mayonnaise and Dove soap, said Monday that the acquisition illustrates its strategy of focusing on personal care and higher-growth areas.

With the TIGI deal, the Anglo-Dutch consumer-goods company will add brands such as Bed Head and Catwalk to its lineup, which includes hair-product lines Sunsilk and Suave.

"TIGI's strength in styling and its fashion and beauty expertise will also help us raise the bar on innovation for our existing hair brands," said Vindi Banga, Unilever's president of foods, home and personal care.

The deal is expected to close by the end of March, subject to regulatory approval.

TIGI employs about 550 people and has operations in the U.S., U.K., Italy, Germany and Australia.

It had sales of $250 million last year, with almost half coming from the U.S.

The business will operate as a stand-alone global unit within Unilever and will report to Michael B. Polk, president of Unilever Americas.

The deal doesn't include the Toni & Guy salons or the Toni & Guy brand, which are owned by Toni Mascolo.

Pfizer in Talks to Buy Wyeth

A combination of these two U.S. pharmaceutical giants would redraw the boundaries of the global drug industry, which has suffered from flagging product development and high fixed costs. It would also represent a high-stakes gambit for Pfizer, which has been stung in the past by expensive acquisitions.

The two sides have been in discussions for months and a deal isn't imminent, the people said. Given recent market volatility and overall economic uncertainty, the talks are especially fragile and could collapse, the people warned.

Pfizer spokesman Raymond F. Kerins Jr. said the company doesn't comment on "market rumors and speculation." A Wyeth spokesman said, "We don't comment on marketplace rumor."

Joining New York-based Pfizer and Madison, N.J.-based Wyeth would create a behemoth with combined revenue of about $75 billion and a line of blockbuster drugs including Pfizer's cholesterol drug Lipitor and Wyeth's pediatric vaccine Prevnar.

Pfizer, the world's largest drug maker by revenue, would likely use a combination of cash and stock for the acquisition. Details on price haven't been worked out, but Wyeth has a market capitalization of about $52 billion and premiums in the sector have averaged just over 20%. That would put the value of the deal at well over $60 billion.

If completed, a deal could create billions in cost savings through the combination of back-office operations, research and development, sales and manufacturing. Like other major pharmaceutical companies, Pfizer and Wyeth face the looming expiration of patents on their most lucrative products as well as intense competition from makers of generic drugs. In addition, a tougher regulatory environment in the U.S. and overseas has made it more difficult to win approval for new treatments, forcing companies to narrow their research focus.

Those realities have prompted calls for industry consolidation from the investment community. For years, companies have withstood pressure to merge, hoping that new discoveries would allow them to maintain independence. But with drugs generating an estimated $30 billion in sales losing patent protection over the next several years, many analysts have been saying industry consolidation is inevitable.

Unlike other sectors of the economy, the pharmaceutical industry has historically been buffered from downturns because patients typically don't stop seeking treatment for major ailments. While there are growing signs that this recession has triggered a decline in prescription-drug consumption among cash-strapped consumers, major companies nonetheless have streams of cash they can use for acquisitions.

Pfizer alone had more than $27 billion in cash and equivalents on its balance sheet at the end of 2008, Goldman Sachs estimated in a recent note to investors. Analysts believe that most of that money is outside the U.S. and Pfizer would suffer a tax hit if the company repatriated the funds. Many in the industry have been waiting to see what Pfizer does before pursuing deals of their own.

Pfizer posted revenue of $48.4 billion and a profit of $8.1 billion in 2007, the most recent year for which data are available. Wyeth's revenue totaled $22.4 billion and its profit $4.6 billion in 2007.

The stocks of both companies have held up fairly well over the past year compared with the rest of the market. Pfizer's shares have fallen about 23% while Wyeth's stock is down 7.5%. The S&P 500 is off 37% over the same period.

Combining major drug companies doesn't solve the industry's short-term need for new drugs, but it would allow the industry to slash research-and-development spending, which accounts for nearly 20% of sales at many companies.

With more scale, drug companies would also be better positioned to acquire biotech companies, which many believe will be a source of future treatments. Many pharmaceutical companies have already begun to buy or strike drug-development deals with smaller biotech firms. While promising in the long term, such deals tend to bring too little revenues and profits in the short term to make up for the loss of blockbuster drugs.

Since Jeffrey B. Kindler took Pfizer's helm in 2006, there have been rumors he would seek a major acquisition. Pfizer has been battling generic competition for some of its top drugs, while its best-selling drug, Lipitor, which accounts for one-fourth of its revenue, loses patent protection in 2011. It has had trouble bringing new products to market.

Mr. Kindler has been cutting costs, firing more than 15,000 employees since January 2007. A person familiar with the matter say Pfizer is planning to cut as many as 2,400 sales-force jobs in the first quarter of 2009. The chief executive has also been revamping drug-research efforts, shuttering laboratories and selling manufacturing plants.

Investors and analysts have grown increasingly frustrated that these steps aren't enough to return Pfizer to the kind of profitability that made it a stock-market star in the 1990s and early 2000s. Since Mr. Kindler took over, Pfizer stock is down 34%, compared with a drop of 20% for the Dow Jones Wilshire Pharmaceuticals Index.

Critics have lambasted Pfizer's 2006 sale of its consumer business, which included the Listerine, Visine and Lubriderm brands, as well as nonprescription drugs Sudafed and Nicorette. That unit is now helping its buyer, Johnson & Johnson, weather problems in its own prescription drug business.

Of big drug makers, Pfizer in particular has been built through big acquisitions. It gained full control of Lipitor after a $116 billion takeover of Warner-Lambert Co. in 2000. But Pfizer's deal-making history also suggests the pitfalls of what analysts say is a reliance on big takeovers over strong in-house research and smart licensing.

Pfizer bought Pharmacia in 2003 largely for painkiller Celebrex, but sales plunged after a rival drug, Vioxx, was withdrawn in 2004 over heart risks.

"The record of big mergers and acquisitions in big pharma has just not been good. There's just been an enormous amount of shareholder wealth destroyed," said Gary Pisano, a Harvard Business School professor who has written about the issue.

Wyeth has had struggles of its own in the past year or two, with sales of its new antidepressant Pristiq taking off slowly and a plunge in sales of heartburn drug Protonix after generic competition came sooner than expected. Midstage trial data of an Alzheimer's drug the company is developing with Elan Corp. have also disappointed some investors.

Nonetheless, analysts have named Wyeth as a likely target because the company has products and businesses that complement Pfizer's lineup. It's not clear what role Wyeth CEO Bernard Poussot would play in the combined company.

Wyeth has already established a foothold in biotechnology. The company has had strong success with Prevnar, its pediatric pneumococcal vaccine, which brought in $2.11 billion in sales in the first nine months of 2008, a 12% increase over the year-earlier period. The company's pipeline includes a new version, Prevnar-13, that is designed to offer enhanced protection against pneumococcal disease. Another strong biotechnology seller in Wyeth's portfolio is the anti-inflammatory biologic Enbrel, which Wyeth co-markets with Amgen Inc.

Wyeth also would bring with it an animal-health business and consumer-health unit whose brands include Advil, Robitussin and ChapStick. Those businesses would help offset the cyclicality and risks of the drug business.

In the absence of big merger deals, pharmaceutical companies have tried to buy time by slashing costs. Most notably, the industry has eliminated about 15,000 sales jobs since pharmaceutical sales-rep ranks reached a peak of about 105,000 in the first quarter of 2006, according to ZS Associates, a sales and marketing consulting firm.

Consultants say the industry still hasn't cut costs nearly enough, and analysts have increased the pressure on executives like Mr. Kindler. Investors are especially keen on acquisitions from cash-rich pharmaceuticals companies now that values of smaller companies have shrunk.

"There is no major payday in R&D coming in the next several years, and the personal makeovers will not be enough," Deutsche Bank analyst Barbara Ryan wrote in a recent note to investors.

Mexico's Grupo Bimbo Closes Acquisition Of Weston Foods Inc

 

Mexican bakeries concern Grupo Bimbo SAB said Thursday it has completed the acquisition of the U.S. bakeries operations of Canada-based George Weston Ltd.

Bimbo paid $2.38 billion for Weston Foods Inc. and an additional $125 million for certain financial assets.

The buyout, which more than doubles Bimbo's presence in the U.S., was financed with $2.3 billion in bank debt and existing cash, Bimbo said in a press release.

Bimbo Bakeries USA now has 35 plants, 7,000 distribution routes and employs more than 15,000 people. Bimbo said results of Weston Foods Inc. will be reflected in its first-quarter earnings from Jan. 21.

ConAgra Foods names Andre Hawaux President of Consumer Foods

 

ConAgra Foods Inc. promoted Chief Financial Officer Andre J. Hawaux to lead its consumer foods division and Controller John F. Gehring to replace Hawaux.

Hawaux, 48, joined the giant food maker in 2006 as financial chief after 25 years of experience with PepsiCo Inc. and its bottlers. He will oversee Conagra's $7.5 billion consumer-foods business, which makes Healthy Choice, Marie Callender's and Banquet brands of frozen meals.

"Andre is a proven operator, and over the past several months, he's shown very strong leadership in improving our execution and analysis within" the segment, said Chief Executive Gary Rodkin. The division's sales rose 4.4% and profit rose 2.2% as higher prices more than offset a 4% volume drop.

Gehring, 47, served as interim CFO before Hawaux joined the company. His most recent responsibilities included financial oversight for the company's commercial foods business.

ConAgra - whose brands also include Chef Boyardee pasta, Hunt's ketchup and Peter Pan peanut butter - saw profits fall in the latest quarter amid the absent of its trading operations. They were sold in 2008 to allow the company to focus on its food business.

Anheuser-Busch InBev To Open N.Y. Office

Anheuser-Busch InBev plans to open a functional management office in New York to better support the needs of the combined global organization.

This office would operate under the direction of the global headquarters in the Netherlands.

"The creation of Anheuser-Busch InBev will generate significant growth opportunities from leveraging the company's combined brand portfolio, including its global flagship brands Budweiser, Stella Artois and Beck's, its leading global distribution network and by applying best practices across the new organization," says the company. "In addition, over 40% of the newly combined company's earnings are now generated in the United States, which has become the company's largest market."--Nina Lentini