Food Processing - August 2008 - (Page 23)

worldwide … We added several tuck-in acquisitions in key markets and segments … We funded incremental investment to explore breakthrough R&D opportunities.” Nestle, especially in North America but also worldwide, was aided by the 2007 acquisition of baby-food company Gerber, bought from Novartis AG. But it wasn’t all based on acquisitions. “The food, beverages and nutrition business, with … an increase of 9.2 percent, was the main contributor to growth,” said the company’s annual report. “It achieved organic growth of 7.1 percent, with real internal growth of 4 percent and pricing of 3.1 percent. This relatively high level of pricing, compared with recent years, reflects our success in passing on raw material cost pressures and is a testament to the strength of our brands.” The biggest growth (17.1 percent) of any of our top 10 companies belongs to Dean Foods. The Dallas-based dairy became the biggest fluid milk supplier in the world by acquisitions, and it made a big one in early 2007: Friendship Dairies, one of the largest dairies in the northeastern U.S. But input costs rose faster than sales. Raw milk prices in the second half of 2007 averaged more than 80 percent higher than in the prior year, so it was no surprise that Dean’s sales soared even as profits dipped – for the second year in a row. But the biggest sales increase on our chart belongs to Pilgrim’s Pride. Its $1.2 billion purchase of Gold Kist Inc. in December 2006 created the world’s largest chicken company and fueled its 45 percent sales growth. More importantly, after losing money in 2006, Pilgrim’s Pride returned to profitability in 2007. The past year saw the beginning of two main trends that had huge impacts on the sales and the bottom lines of our Top 100 companies: changes in consumer spending patterns and soaring agricultural commodity prices. Those trends continue unabated into 2008. First, consumer spending is changing as a result of the stumbling economy and rising energy prices. Unemployment is high and mortgages are dicey, but people are not giving up their homes or their cars. What they are doing is eating out less often and being a little more careful how they spend their money. There’s speculation this could bring about the disappearance of second- and third-tier brands. Brand loyalists will continue to spend a little more on their favorites but for other products may turn to private label or economy brands whenever they perceive little or no difference in quality. “For the first six months of 2008, the producer price index for ‘intermediate foods,’ the food products used in the production of final food products, rose 15 percent, following a 14 percent jump in 2007,” says Kevin Flaherty, senior vice president and senior research analyst with GE Commercial Finance. “That’s the most severe inflation since the 1973-74 period.” He also notes that, in the first half of 2008, retail food store sales growth outpaced restaurant sales growth for the first time since 1993, when the U.S. Census Bureau began tracking those metrics. Also, there are a couple of new names on the list … but only new names for old companies. Swift, which was owned by a holding company, was bought in mid-2007 by Brazilian meat processor JBS S.A. and renamed JBS Swift & Co. (sometimes referred to as JBS USA). Also semi-new is Dr Pepper Snapple Group. The North American beverage operations of Cadbury Schweppes PLC were spun off into an independent company on May 7. They accounted for $5.7 billion of what last year was $7.6 billion in U.S.- and Canadian-based sales of Cadbury Schweppes. A note about these figures: We count only value-added/ready-forsale food products, meaning all packaged foods and even beef patfoodprocessing.com ties sold to McDonald’s but not ground beef or raw milk sold to another food processor, nor ingredients. And we count only U.S.- and Canadian-manufactured products. Exports are OK, but not products manufactured overseas. alphabetic index Ag Processing Inc. 38 Agropur Cooperative 41 American Crystal Sugar Co. 66 American Foods Group LLC 67 American Seafoods Group LLC 96 Anheuser-Busch Cos. Inc. 5 Associated Milk Producers 56 B&G Foods Inc. 99 Birds Eye Foods 81 Brown-Forman Corp. 35 California Dairies Inc. 50 Campbell Soup Co 21 Canada Bread Co. 58 Cargill Inc. 20 Chiquita 25 Coca-Cola Co. 13 Coleman Natural Meats 92 Colgate-Palmolive Co 51 ConAgra Foods Inc. 9 Constellation Brands 46 Cott Corp. 65 Dairy Farmers of America 47 Dannon Co. Inc. 74 Darigold 59 Dean Foods Co. 6 Del Monte Foods 31 Dole Food Co. Inc. 16 Dr Pepper Snapple Group 19 Flowers Foods Inc. 45 Foremost Farms USA 57 Fortune Brands Inc. 37 General Mills Inc. 7 Gilster-Mary Lee 84 Glanbia Foods Inc. 64 Golden State Foods 98 Gorton’s 94 Goya Foods Inc. 86 Great Lakes Cheese Co. 52 H.J. Heinz Co. 27 H.P. Hood Inc. 43 Hain Celestial Group 82 Hershey Co. 24 Hilmar Cheese 83 Hormel Foods Corp. 18 Imperial Sugar Co. 80 Interstate Bakeries Corp 36 J&J Snack Foods 97 J. R. Simplot Co. 73 J.M. Smucker Co. 39 JBS Swift & Co 11 John B. Sanfilippo & Son Inc. 95 Kellogg Co. 10 Keystone Foods 60 Kraft Foods Inc. 3 Lactalis USA/Sorrento 89 Lancaster Colony Corp. 87 Lance Inc. 85 Land O’Lakes Inc 29 Leprino Foods Co. 42 Maple Leaf Foods 22 Mars Inc. 14 McCain Foods 48 McCormick & Co. 70 McKee Foods Corp 75 Michael Foods 62 Molson Coors Co. 32 National Dairy Holdings LP 55 National Grape Cooperative 90 Nestle (U.S. & Canada) 4 OSI Group 76 Parmalat Canada 49 Pepsico Inc. 2 Perdue Farms 33 Pierre Foods 91 Pilgrim’s Pride 12 Pinnacle Foods 68 Prairie Farms Dairy Inc. 71 Procter & Gamble Co. 26 Ralcorp Holdings 44 Reser’s Fine Foods 93 Riceland Foods Inc. 77 Rich Products Corp. 40 Ruiz Foods 100 SABMiller PLC 23 Sanderson Farms 61 Sanfilippo (John B. Sanfilippo) 95 Saputo Inc. 30 Sara Lee Corp. 17 Sargento Foods Inc. 88 Schreiber Foods Inc. 34 Schwan Food Co. 54 Seaboard Corp. 69 Seneca Foods Inc. 72 Simplot (J.R. Simplot) 73 Smithfield Foods Inc. 8 Smucker’s (J.M. Smucker) 39 Sunkist Growers 79 Swift (JBS Swift) 11 TreeHouse Foods Inc. 78 Tyson Foods Inc. 1 Unilever North America 15 Wells’ Dairy 63 Weston Foods 28 Wm. Wrigley Co. 53 August 2008 food processing • 23 http://foodprocessing.com

Table of Contents Feed for the Digital Edition of Food Processing - August 2008

Food Processing - August 2008 Contents Editor’s Plate NewsBites Special Report Rollout Food Biz Kids The Top 100 Ingredients Show Report Plant Operations MRO Q&A Case History New Supplier Products Toops Scoops

Food Processing - August 2008

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