Campbell Soup Company Appoints New CIO

Campbell Soup Company appoints Joseph Spagnoletti as senior vice president and chief information officer, effective August 1, 2008. Spagnoletti succeeds Doreen A. Wright, who led the implementation of SAP across the majority of Campbell's North American operations. Spagnoletti will be responsible for overseeing Campbell's global information technology (IT) function and providing IT strategy that will help Campbell meet its business goals. He will continue to advance the strategic IT agenda established by Wright and further develop Campbell's IT organization into a world-class global function. He will be responsible for completing Campbell's SAP implementation and delivering the full benefits of the enterprise resource system for the company. He will lead Campbell's worldwide IT department and manage all technical and application information systems. Spagnoletti will report to Campbell president and CEO, Douglas R. Conant. Commenting on Wright's departure, Conant says, "Doreen will leave a lasting legacy on Campbell Soup Company, both within the IT department and beyond. She has made important contributions to Campbell's transformation over the past seven years. From an IT perspective, she has led the establishment of a global operating model for the IT function and the strategic and operational leadership of our SAP implementation. Beyond her functional role, Doreen has tangibly improved employee engagement at Campbell through her work with the Office of Diversity her involvement in Campbell’s employee networks and her dedication to mentoring programs. I wish Doreen well as she leaves Campbell to spend more time on her life-long passion of supporting the arts. She will be greatly missed." Spagnoletti has more than 20 years of IT and management experience. He joined Campbell in 1997 as Director IT -- Food Service and held several positions of increasing responsibility within the IT function. Most recently, he was vice president, IT for Campbell North America where he successfully led several key projects, including the implementation of a trade management system and oversight of North American SAP implementations. Prior to Campbell, Spagnoletti spent seven years as an IT Director at Becton Dickinson. He started his IT career at Hospital Computer Systems and also worked at CIC/DISC.

Unilever appoints Berger Chief R&D Officer

Unilever has appointed Genevieve Berger as its chief R&D officer.

 

Patrick Cescau, group CEO, said: "I am extremely pleased to be able to welcome Genevieve to my team as an executive member. The contribution she has made to the business as a non-executive was outstanding and served to demonstrate to us how much more she could achieve in a full-time capacity."

Del Monte in talks to sell StarKist to South Korean company

Del Monte Foods Co. said Friday that it's in talks with South Korea's biggest canned-tuna maker, Dongwon Group, to sell the StarKist seafood division for a reported $300 million.

 

Discussions are in connection with Del Monte's previously announced exploration of what it calls "strategic alternatives" for its seafood business, the company said in a statement. No price was revealed.

 

StarKist accounts for about 10 percent of Del Monte's revenue, but the operation is facing ever-higher fish costs.

 

Dongwon Enterprise Co., the unlisted holding company of the Dongwon Group, hasn't made a decision on the purchase, two publicly traded affiliates said in separate statements to the Korean stock exchange in response to a query. Maeil Business Newspaper reported yesterday that Dongwon Group will join a South Korean private-equity fund to buy StarKist's assets and debts for $300 million.

 

San Francisco-based Del Monte said in May it may sell StarKist. It was this past month that Del Monte, which originally came to Pittsburgh in 2002 when it acquired four divisions from H.J. Heinz Co. for $2.5 billion, is relocating about 100 marketing and related positions from its 500-person operation on the North Shore to its corporate headquarters.

 

The Heinz transaction included StarKist, pet foods, baby foods and unbranded soups. The deal included Heinz's North Side manufacturing facilities. In 2006, Del Monte sold the North Side plant, baby food and unbranded soup units to TreeHouse Foods Inc., of Westchester, Ill.

 

Positions moving west include the last vestiges of Del Monte's pet food and StarKist tuna operations, leaving in the Del Monte Center primarily back-office jobs the company said are important to its operations. Pittsburgh employment within a year will fall to 400, the company said.

Unilever is reportedly in negotiations to sell its all, Snuggle, Wisk and Surf laundry brands to Huish Detergents. The deal could make Huish No. 2 in the North American laundry business, with Procter & Gamble leading the pack. Unilever and Huish did not comment on the reports.

Schwan Foods names Greg Flack CEO

 

Greg Flack is the new chief executive officer, president and chief operating officer of the Schwan Food Co., the company said Monday.

Flack has worked for Schwan for more than 21 years and most recently was the company’s interim CEO and president.

Flack is a graduate of Granite Falls-Clarkfield High School.

Flack has also served as the company’s president of Schwan’s Global Consumer Brands and worked in other roles for the company.

Company spokesman and executive vice president Bill McCormack said Flack will start his new role July 1.

“He’s very experienced in the food industry,” McCormack said of Flack.

Flack also knows and understands the Schwan Food Co. including having served as senior vice president and general manager of Food Service, and executive vice president for product and market strategy, McCormack said.

Flack will lead a multi-billion company with about 22,000 employees worldwide and about 2,200 locally. The company’s corporate headquarters are in Marshall. McCormack said Flack has shown an ability to lead the company in the challenges of higher commodity prices, higher fuel prices and others facing the company today.

Flack’s skill was also cited by company chairman of the board Alfred Schwan in a Monday news release.

“He has shown tremendous passion, strong business (skills) and focused vision in his role as interim leader and has demonstrated the company’s culture and values for over 21 years,” Alfred Schwan said in the release.

Marshall Mayor Bob Byrnes said the company’s confidence in Flack to lead them in challenging economic times will directly “benefit the community, not only Marshall but the region and the entire state, (all) need to have Schwan...be successful.”

It’s always good to see an employee from within the company get chosen for the highest position, said Roger Madison, the president of Bremer Bank in Marshall.

Flack has demonstrated the skills needed for the position while he served as interim leader, Madison said.

“I expect he will integrate well into the position,” Madison said.

The company’s decision should also lessen some concerns and fears the public may have about its future, particularly in Marshall, McCormack and Byrnes said.

“I think it’s reassuring the new leader of Schwan is a long-tenured employee who is committed to see it grow,” McCormack said.

When asked by the Independent if the selection of Flack should reassure those who worry the company may relocate its corporate headquarters, “I think those people should be more reassured,” McCormack said.

The end of interim leadership and the start of permanent leadership should ease some worries, Byrnes said.

“Those questions about what might happen, and some concerns, might be alleviated,” Byrnes said.

Flack’s ties to the area “are a big plus for southwest Minnesota and the community of Marshall,” McCormack said.

“That will be of benefit to us as he makes decisions for the company, while he has to make good decisions for the company, having an understanding of the local community, the local pride (is a benefit),” Madison said of Flack’s ties to the region.

Flack understands the region, McCormack said.

While Flack’s ability to handle challenges was cited, the company also said he’s focused on growing the company.

“It offers a unique opportunity to confront the critical issues facing the food industry head-on, and drive growth and competitive advantage for the future,” Flack said in the release. “I look forward to leading the company and accelerating growth and financial performance...”

Flack is a member of the first leadership class in the Schwan’s University, corporate education and leadership training system, McCormack said.

Flack has enhanced his leadership skills and has progressively stepped up in his management positions within the company, McCormack said. Flack is an example of what the Schwan’s University system is designed to do for the company and its employees, McCormack said.

Byrnes said Flack is also a product of southwest Minnesota and is an example of a local success story. Flack is an example “that a good education and hard work pays off and results in success,” Byrnes said.

I think that brings a certain level of pride to all us,” Madison said.

SABMiller plc and Molson Coors Brewing have given further details about the executive lineup for their newly partnered brewery holdings, five days after the U.S. Department of Justice Okayed the joint venture.

Andy England will become chief marketing officer for the new company, to be named MillerCoors and set to launch just after the transaction closes on July 1.

England has been the chief marketing officer at Coors Brewing Co. since January 2006. Prior to that, he served as vice president and general manager of snacks at Hershey Foods and before that as category vice president of the Dr. Pepper/7Up unit at Cadbury Schweppes.

England will report to Tom Long, current CEO of Miller Brewing Co., who will become president and chief commercial officer of the new entity, as previously announced. Current Molson Coors CEO Leo Kiely will take on that post at MillerCoors.

In addition to naming England, the soon-to-ally companies announced that Daniel Puffer will be chief operating officer for MillerCoors. Tom Cardella will become president of the new company’s eastern division and Ed McBrien will head the western division.

All told, the leadership for the new company contains seven executives from Miller and seven from Coors. Kiely said in a news conference announcing the lineup that the even split was intentional.

“We had an eye on balance,” he said.

Both SABMiller and Molson Coors will have equal voting rights in the new venture, although Miller will have a 58% economic stake in MillerCoors.

After having their joint venture cleared by the Justice Department on June 5, the companies said in a release that they expect the combined operation to lead to cost savings of $500 million annually by its third year.

Smucker to Buy Folgers from P&G For $3 Billion

 

J.M. Smucker Co. said Wednesday it has agreed to buy the Folgers coffee business from Procter & Gamble Co. in an all-stock deal valued at nearly $3 billion.

The acquisition, which also includes $350 million in Folgers debt, will nearly double the size of the Orrville, Ohio-based food company, which now has annual sales of about $2 billion and a market capitalization of about $3 billion.

Under the terms of the deal, Smucker will issue a one-time special dividend of $5 a share to Smucker shareholders prior to the merger, which it called "a clear indication of the strength of the combined businesses." P&G shareholders will then get about 53.5% of Smucker, ensuring the stock-for-stock merger is tax-free.

The agreement has been approved by the board of both companies. Cincinnati-based P&G is expected to split off Folgers and finalize the transaction structure in the early fall. Smucker expects to incur about $100 million in one-time costs related to the deal over the next two years.

As Folgers is the top-selling ground coffee in the U.S., the purchase will catapult Smucker into the leading position in the coffee market. The brand, though, has to contend with the popularity of Starbucks Corp.'s chain of coffee stores and the proliferation of gourmet coffee brands.

Smucker said the merger "provides investors with a compelling financial story and further strengthens Smucker's ability to deliver enhanced shareholder value over time." The company said the deal would increase fiscal 2009 earnings by about 9% a share, excluding one-time items, while it would result in synergies of more than $80 million.

Smucker added that if the deal closes early in the fourth quarter of this year, fiscal 2009 earnings are expected to reach $3.45 to $3.50 a share, while fiscal 2010 earnings would be expected to jump to $3.62 to $3.72 a share.

"Folgers is a perfect strategic fit within our portfolio of leading and iconic North American food brands," Smucker Chairman and Co-Chief Executive Tim Smucker said Wednesday.

President and Co-CEO Richard Smucker added, "Coffee is the perfect complement to breakfast or dessert -- two areas we know a lot about...The addition of Folgers will also enhance our ability to reach out to consumers at retail through complementary, multi-brand merchandising activities."

Smucker said following completion of the deal, the it will add more than 1,250 employees.

It isn't the first time that Smucker has struck a daring deal with P&G. In 2002, Smucker acquired Jif peanut butter and Crisco shortening in an all-stock deal valued at nearly $1 billion. Acquiring Jif and Crisco then gave it the lead position in peanut butter and cooking-oils markets.

The deal is a departure from P&G's previous plans to separate Folgers into a standalone business, as it announced it likely would in January.

P&G had decided to shed the Folgers business as part of a companywide effort to reduce its exposure to slow-growing businesses that can't keep pace with its annual sales-gain target of 4% to 6%. Folgers has a sales-growth rate of about 2% to 3%.

Since A.G. Lafley took the helm of P&G, he has been cleaning company cupboards of slow-moving food businesses to focus on faster-growing health and beauty industries.

Smucker was founded in 1897 by Jerome Monroe Smucker, who began pressing apple cider and selling apple butter off a horse-drawn wagon, according to the company's Web site. The company is still run by his descendants, including co-CEOs Richard and Timothy Smucker.

The company moved into jellies, jams, fruit spreads and ice-cream toppings, and went public in 1959. In the 1960s it coined the advertising slogan, "With a name like Smucker's, it has to be good." That same decade, Kellogg's Pop-Tarts were introduced, filled with Smucker's jam.

Besides the Mason plant, Spear operates plants in Milford, N.H. and Fulton, N.Y., with operations in the United Kingdom and South Africa.

In addition to Anheuser-Busch, key customers include Bacardi, Coke, Diageo, Grupo Modelo, Heineken, L’Oreal, Neutrogena, Pepsi, Proctor & Gamble and SABMiller. No layoffs are expected.

“In fact, we’re planning on expansion,” said Dan Muenzer, spokesperson for Spear. Mexico and Southeast Asia are likely to be regions where Spear will expand in 2009, he said.

Even Warren Buffett Puts Stock in Household Names

From his growing list of acquisitions, Warren E. Buffett seems to be investing like the world's richest 10-year-old boy, if that boy lived in 1955 America.

He is Coca-Cola's largest shareholder. He owns Dairy Queen. Last year, Buffett got a train set, buying into Burlington Northern Santa Fe Railway. And in late April, he bought a piece of the world's largest candy store, sinking $6.5 billion into the Mars-Wrigley chocolate-and-bubble gum merger.

What's next for the Nebraska billionaire investor? DC Comics? Daisy BB guns?

It is true that the 77-year-old Buffett frequently touts his childlike-love of cheeseburgers and Cokes. But his investment strategy turns out to be more sophisticated than that of a schoolboy with change in his pocket, drooling over a candy counter.

In the eyes of many, the Oracle of Omaha -- whose Berkshire Hathaway holding company owns or has major stakes in many iconic brands, including Fruit of the Loom, Kraft Foods and Johnson & Johnson -- looks like a brand investor.

Brand investors buy companies with well-known or well-regarded names -- Apple, Tiffany, Disney and McDonald's, to name a few. The belief is that even though a brand company may produce many unlike products, their qualities -- supported by strong management and a broad marketing and distribution system -- will translate into consistent, above-average returns over a long period.

"Really, nothing can go wrong with the Wrigley and Mars brands," Buffett said on CNBC after announcing that he would finance part of McLean-based Mars's buyout of Wrigley. "They have faced the test of time over decades and decades, and people use more and more of their products every day."

Brand name companies, said professional money managers who consider themselves brand investors, can often charge more for their products than their less-established competitors and weather tough times more smoothly because of their loyal customer bases. They also have the ability to leverage their name recognition to increase business -- whether it's expanding operations by attracting more Marriott hotel franchisees, launching a new flavor of Crest toothpaste or extending the Clorox brand from bleach to moist towelettes. In addition, brand companies tend to have dominance in their fields, making it difficult for new entrants to chip away at market share.

Such qualities, analysts said, are hard to measure but are certainly a force driving profits at companies whose products are consumed by millions of Americans every day.

"Brands themselves are what one might call soft assets -- they don't actually show up in the balance sheet of a company's financial statements," said Robert Millen, chairman and portfolio manager of Jensen Investment Management, which has shares in Procter & Gamble, Coca-Cola and Johnson & Johnson. "But the value of that brand is clearly in the business -- and it takes years and years to build. Once you've built that strength and you continue to feed it and support it over time, then you get . . . pricing power that allows the business to maintain margins throughout varying economic periods. Secondly, you get repeat business. And those two things lead to consistent earnings."

Branded products companies have a higher propensity to pass along price increases when they have increasing costs themselves, said Larry Coats of the Oak Value Fund. This can prove critical in a time of rising food and energy prices.

"The consumer is buying more than just the raw material," said Coats, whose top holdings include 3M, American Express, Oracle, and, perhaps unsurprisingly, Berkshire Hathaway. "They're buying something else, whether it's a trusted relationship, or confidence in the product, an acknowledgement of a higher quality."

To that end, one brand company that Coats, a value investor, has been buying in recent months is Tiffany, whose shares had been beaten down on concern that consumers squeezed by the economic downturn would curtail spending on luxury goods. In Tiffany, Coats has found a company that consistently produces gross margins of 55 to 57 percent, above the 50 percent of typical jewelry retailers.

"Jewelry is a business where the consumer doesn't really know the cost of goods sold are," he said. "They know that they want to buy a high-quality product from a retailer that they can have confidence in. In the consumer's mind, it's always delivered in the blue box. And the blue box is the symbol of that trusted relationship."

One of the key qualities Gary Bradshaw of Hodges Capital Management looks for in brand companies is the ability to expand products overseas. The thinking is that though mature brands may have little room to grow domestically, especially during an economic slowdown, they could use their overseas plants and vast marketing power to tailor their products in a way that would help them gain market share in emerging economies.

"The world is industrializing right now," said Bradshaw, who owns shares of Starbucks, McDonald's and Wal-Mart. "There are 2 billion people who are going to become middle-class citizens around the world. I believe those folks will live like we do in America."

While he is also betting on Coca-Cola, which derives more than 70 percent of its revenue from overseas, Bradshaw said he passed on Dr Pepper Snapple Group when it spun off from Cadbury to debut on the New York Stock Exchange last month, in part because 90 percent of its business is in the United States. "If it was 50 percent oversees, I'd probably be buying it left and right," he said.

Brand investing, perhaps more than any other investing style, is easy to understand and can be followed by patient individual investors who are in it for the long haul and are willing to their homework. But it's not without pitfalls.

Coats quickly realized his mistake when he bought a small stake of Eastman Kodak in 2000, back when it was the leader in the film and developing business. He and his team thought the brand was strong enough to extend its dominant position into the digital age. But ultimately, they concluded that the challenges posed from the proliferation of digital cameras, home printers and electronic imaging was too daunting.

His fund, which had bought the Kodak shares for an average of about $50, sold them off three months later at $39. On Friday, the stock closed at $15.32.

A product with top market share, however, can suddenly be challenged as a result of competitors' mergers and acquisitions.

In the mid-1990s, Matt Kaufler, a portfolio manager of the Touchstone Value Opportunities Fund, took a position in Pet, a food company with several key brands including the Old El Paso line of Mexican products. But then, competitor Pace Foods was acquired by Campbell Soup. And Pepsi began rolling out salsa sauces under the Frito Lay and Doritos labels.

"Picture a vise, and picture Old El Paso in the middle of the vise and on either side is Pepsi and Campbell's squeezing," Kaufler said. "Overnight . . . their competitive posture changed substantially. Their margins began to show the stress of that. They started to miss their earnings numbers because they had to spend more to promote their products."

It was an unsustainable situation that led to the buyout of Pet by a larger British company, which in turn ended up in the hands of General Mills.

Even Buffett has had his share of stumbles despite his long-term record. A 2007 study by researchers at Texas A&M and Ohio universities showed that from 1980 to 2003, Berkshire Hathaway beat the Standard & Poor's 500-stock index in 20 of 24 years. Its annual return beat the index by more than 12 percent over the same period.

But in 1989, Berkshire Hathaway invested $358 million in US Air for 9.25 percent of the airline's preferred stock. In his 1996 letter to shareholders, Buffett wrote that he was "beguiled by the company's long history of profitable operations, and by the protection that ownership of a senior security seemingly offered me."

But, Buffett said, he overlooked a crucial fact: The airline industry was rapidly deregulating. This created cutthroat competition that ate into US Air's earnings even as it had to maintain a cost structure held over from a time when federal regulation protected the carrier's profit. Buffett managed to unload his US Air shares at a gain in 1998, avoiding two bankruptcies by the airline in following years, but he characterized his analysis of the airline as "superficial and wrong."

Buffett also bought into retailer Pier 1 in 2004, just after its stock peaked at more than $25 per share. He sold his stake in 2007, when the stock was trading in the single digits.

As a rule, money managers say, individuals would do well to stick with brand companies that are diversified around the world, have a long record of consistent earnings and sales growth, and a history of supporting their brands. Investors should also try to stick with companies whose brands are No. 1 or 2 in most of their markets, Millen said.

The trick for investors is to buy the companies when they are out of favor because they often trade at a premium, Kaufler said. "Strong brands are rare. And it's even rarer when you can pick them up at an inexpensive price," he said.

Patience, analysts said, is important.

"Warren Buffett would say that when he goes and buys a business, he buys it with the idea that he's going to own it forever," Kaufler said.

Campbell's Chief Looks For Splash of Innovation

 

Excerpts from an interview with the Wall Street Journal

When Douglas Conant became CEO of Campbell Soup Co. seven years ago, naysayers bet against him being able to revive soup with today's busy and health-conscious consumers. Mr. Conant proved them wrong after remaking the company's condensed soups, introducing soup in microwavable containers, revamping marketing and redesigning shelving systems in supermarket soup aisles.

Campbell CEO Douglas Conant is launching new soup lines next year.

Now, Mr. Conant, 56 years old, has more proving to do. Campbell, which also makes Pepperidge Farm foods and V8 beverages, is struggling with high ingredient and energy costs as well as a competitor that beat it to market with a successful new product.

An avid sports fan and reader of business-leadership books, Mr. Conant keeps his own personal mission statement in a frame on his desk. He recently talked about the challenges of selling soup in China, getting Americans to eat their vegetables and why more people are cooking with broth. Excerpts:

WSJ: In your latest quarter, you reported that total soup sales were down by 3%. Why is that?

Mr. Conant: We had lackluster innovation beyond reduced-sodium soup and it just wasn't sufficient to compete with what I think was pretty good innovation on the part of competition. So this year we lost the innovation war in soup. We're the leader in soup and that can't happen again.

WSJ: I assume you're referring to General Mills's Progresso soup. How did they beat you and what are your plans for addressing that?

Mr. Conant: Progresso had good execution of light soups tied to Weight Watchers points, which got good traction with their primary audience of women 35 and older. We have to have a competitive entry there and we will. Our Select Harvest line we're launching next year will have a full complement of light soups.

WSJ: You recently told investors that you didn't have the right pricing plan in place.

Mr. Conant: We had anticipated costs were going to be up 3% to 4% in this past fiscal year. It turned out they were up 7%. In much of our portfolio, we were able to price to begin to cover those costs. In our soup portfolio, we were not.

WSJ: The bright spot in your soup business this year was broth. What's behind the increased demand for broth? Are people cooking more?

Mr. Conant: Actually they are, and our campaign around broth is, basically, whenever you're cooking with water you can cook with broth and have a more flavorful product. Also, this past year we introduced new sizes [of broth packaging]. We created a chef size for the heavy user and a smaller size for the occasional light user. Just getting the right sizes for consumers helped drive our growth this year.

WSJ: You're moving into Russia and China with your soups and broths. You tried to enter China in the 1990s and it didn't work out. Why is this time different?

Mr. Conant: In the '90s we had this American sense of Manifest Destiny. We thought we could just take our existing products and ship them to other parts of the world and they would be naturally hungered for, somewhat like Coca-Cola or Pepsi Cola. Well, the difference is that in every culture you go into, soup is one of the first foods that was discovered by that culture. You can't just say 'Well, we like chicken noodle here so they'll like it in China.'

Half the world's soup consumption is in Russia and China and it all happens to be homemade. So what we had to do was put teams on the ground in Russia and China for three years, just living with consumers and studying how they eat soup and trying to uncover a way for us to participate in that soup occasion. We discovered they weren't prepared to accept ready-to-serve products. So we basically have soup-starter concepts.

WSJ: Does Campbell have a position on the food-for-fuel issue and the government mandate on how much corn should be used to make ethanol?

Mr. Conant: The world has changed since the ethanol incentives were put in place and what we're saying is, it has to be re-examined because it had unintended consequences. The people that enacted it didn't realize the impact it was going to have -- that by planting more corn you'd be planting less wheat and that the price of that wheat was going to go up so much because the demand for wheat globally is so high.

WSJ: Do you think food companies benefit in a slowing economy?

Mr. Conant: Typically, food companies in inflationary times are a safer haven for investors because people need to eat. This is an unusual time, because for the first time in my career, we have inflationary times but we also have this huge spike in our grain costs and our fuel costs are at unprecedented levels.

WSJ: You're going to replace your Campbell's Select line with a new soup line under the V8 brand. Why has it been so hard to come up with a successful premium soup?

Mr. Conant: The soup category, until this year, has grown at a faster rate every year for four years, which just signals that the current offerings are good. When you try to come in on top of that with a premium product in a value-sensitive world, it's hard. It's probably not the perfect time to introduce premium-priced items in a high-inflation environment. That having been said, if you get the right value proposition, it does work.

WSJ: You've reinvented the V8 brand from being a vegetable juice or a fruit juice to being a vegetable and fruit blend with your V8 V-Fusion line. Why did you do that and what have been the results?

Mr. Conant: Americans don't eat enough vegetables. Our scientists were able to come up with a fruit and vegetable blend, which doesn't have any of the taste of vegetables but delivers a full serving of vegetables in every eight-ounce serving. Wellness is the No. 1 trend, by far, in consumer foods right now and this is right in the sweet spot. V8 will be our next billion-dollar brand.

WSJ: Do you think the food industry will undergo further consolidation?

Mr. Conant: I personally don't see the value of consolidation. I don't think bigger is better and I think focused food companies are the way to win in a sustainable way. But that having been said, Wrigley was just acquired by Mars and Hershey is always rumored to be merging with Cadbury, so who knows.

WSJ: You recently hired a mergers-and-acquisitions expert (Tarkan Gürkan from Lehman Brothers). What kinds of acquisitions are you looking for?

Mr. Conant: We have our three cores: simple meals, baked snacks and healthy beverages, and we're going to be looking to build out those areas of focus both with internal development and also with strategic fold-ins and fill-ins.

WSJ: Since you're from the Chicago area, I have to ask: Cubs or White Sox fan?

Mr. Conant: Cubs! A friend of ours says, "You've got to be careful with those Cubs. They'll break your heart." But I'm an eternal optimist. I think this is the year. It's got to be.