McCormick & Co. Maintains a Strategy for Consumer Division Amidst Volume Recovery
McCormick & Co., a prominent US-based producer of spices, seasonings, and hot sauces, announced that it anticipates a continuation of negative pricing for its consumer division throughout the remainder of 2023. This determination comes as part of a wider strategy aimed at achieving "healthy volume growth" swiftly, according to President and CEO Brendan Foley during the presentation of the company's third-quarter results on 1 October 2023.
The company reported a rise in group volumes by 1% for the third quarter, a statistic impacted by pricing strategies. While the consumer business volumes experienced a 1% increase accompanied by a negative pricing impact of the same percentage, its flavour solutions segment, catering primarily to foodservice, saw positive pricing influences. CEO Foley indicated a clear focus on restoring healthy volume growth, acknowledging the complexities of predicting long-term pricing due to fluctuating factors like inflation and commodity costs.
Foley, alongside CFO Mike Smith and incoming finance chief Marcos Gabriel, suggested more detailed disclosures will be forthcoming at McCormick's annual investor day scheduled for 22 October 2023. The executive team underscored the importance of pricing as a tool to navigate unpredictable market conditions.
Despite achieving a meaningful milestone in positive volume growth, the company remains challenged by broader market dynamics affecting consumer behaviour. Foley noted resilience among consumers despite their tendency to seek value, exhibiting shopping patterns of more frequent, yet smaller, purchases.
Thomas Foods International Announces Leadership Restructure
In a significant leadership reshuffle, Thomas Foods International (TFI), an Australian meat processor, has announced that Managing Director Darren Thomas will assume responsibilities as CEO, succeeding Anthony Stewart. Stewart, who will transition to an executive director role on the board at the beginning of 2025, has played a vital part in TFI's expansion both locally and internationally since joining in 2014.
The company, headquartered in Dulwich, South Australia, noted Stewart's contributions in his roles as CFO and later as chief commercial officer before his tenure as CEO beginning in 2021. This leadership transition comes as TFI continues to grow its operations across several continents including Asia, Europe, and North America. In conjunction with this leadership change, TFI appointed Alexis Junin as the new chief financial officer. The company anticipates further announcements regarding its senior leadership in the near future.
Mondelez International's SnackFutures Makes Investment in Urban Legend
Mondelez International has made its maiden investment in the UK through its venture capital arm, SnackFutures, acquiring a minority stake in Urban Legend, a better-for-you doughnut firm. SnackFutures, established in 2018, aims to partner with start-ups and innovate in fresh categories, aligning with Mondelez’s strategic focus on expanding its presence in cakes and pastries.
Urban Legend, founded by Anthony Fletcher, leverages patented air frying technology to lower sugar, fat, and calorie content by up to 75% compared to conventional doughnuts. The investment aligns with Mondelez’s recent initiatives to enter new segments, such as its recent acquisition of a majority stake in Evirth, a Chinese manufacturer of pastries and mooncakes.
Large-Scale Strike Shuts US Ports Coast-to-Coast
A major strike by the International Longshoremen’s Association (ILA) began on 1 October, impacting 36 ports in the US from the East Coast to the Gulf Coast, including major facilities in New York, Baltimore, Houston, and New Orleans. The strike, involving 45,000 workers, revolves around demands for improved wages and halting port automation projects. The disruption is expected to have significant ramifications on imports and exports, affecting industries such as pharmaceuticals, automotive, and food, with anticipated delays and increased costs.
The National Retail Federation highlighted potential economic impacts, likening it to a similar strike in 2002 that cost the US economy $1 billion per day. The strike also coincides with logistical challenges from recent natural events and is poised to influence pricing structures in supply chains.
European Union Delays Implementation of Deforestation Rules
The European Union has decided to defer the implementation of its new deforestation regulations by 12 months amid international opposition. The EU Deforestation Regulation, initially intended to commence before the year's end, mandates companies to certify that their products do not contribute to deforestation. After receiving feedback from international partners concerning their readiness, the European Commission announced a delay to accommodate necessary preparatory measures.
The regulation, which targets goods such as cocoa, coffee, and palm oil, will now become applicable to large enterprises by December 2025 and to small and micro enterprises by June 2026. These measures aim to address ecological challenges while providing industries adequate transition time, though they face criticism from environmental groups for not promptly addressing deforestation risks.
Ángel Camacho Expands with Acquisition of Portuguese Firm Maçarico
Spanish company Ángel Camacho has acquired Portuguese company Maçarico as part of its strategic plan for 2024-2026. This acquisition marks Ángel Camacho's foray into new markets such as Portugal and Brazil through Maçarico’s existing distribution networks spanning 50 countries. Both organisations, family-owned, are engaged in the production of table olives and condiments, with the deal expected to fortify Ángel Camacho’s global market position.
Nissui Group Acquires French Plant to Expand Tapas Production
Japan's Nissui Group has purchased a production facility in Saint-Hernin, Brittany, through its subsidiary Miti, as part of its aim to meet the growing demand for tapas-style seafood products. This enables Miti, previously purchased by Nissui in 2017, to diversify its offerings beyond shrimp to include squid and octopus.
Nissui, which has various international holdings including companies in the US and Europe, highlights the tapas category's potential growth due to its convenience and popularity in French markets. The acquisition is expected to bolster Nissui's strategic push for global expansion in this niche.
Lamb Weston to Restructure Amid Falling Profits, Factory Closure
Lamb Weston Holdings is undertaking a restructuring strategy, which involves closing its Connell facility in Washington and reducing its global workforce by approximately 4%. This decision arises from decreased profits and aims to secure $55 million in cost savings. Expected to face pre-tax charges of $200-250 million, Lamb Weston has also revised its fiscal guidance in light of these operational changes. The restructuring seeks to manage production more efficiently in response to soft market demands for frozen potato products.
Australia's OJC, SPC & Nature One Dairy Announce Merger
The Original Juice Company (OJC), SPC Global, and Nature One Dairy are merging to form a new powerhouse in the Australian food and beverage sector. With Robert Iervasi appointed as managing director, the newly established entity will consolidate synergies from its combined expertise in fruit juice, packaged fruit, and dairy products. The merger, which involves industry veterans and significant production capabilities, is set to be completed by November 2023, pending shareholders and regulatory approvals.
Source: Noah Wire Services