Food Business News - August 16, 2011 - (Page 12)

Pilgrim’s Pride’s second-quarter earnings plunge The company will close its Dallas processing facility on Sept. 30 higher than a year ago,” said Bill Lovette, president and chief executive officer. “At this time of year we are usually benefitting from stronger market pricing and increased demand from both food service and retail, but to date neither that demand nor pricing has materialized.” Mr. Lovette said Pilgrim’s Pride is making structural changes in its book of business in order to share the cost burden from higher grain prices. The company is in discussion with customers to move toward a more viable business model that ties pricing for chicken products closer to the market, such as through a combination of market- and cost-based pricing. The company also announced it is closing its Dallas processing facility. The facility is scheduled to be shuttered on Sept. 30, and production will be consolidated into other company facilities, including its Mount Pleasant, Texas, processing plant. “By closing the Dallas facility, we can consolidate that production volume at three other plants and help those sites run closer to full capacity,” Mr. Lovette said. “In addition, we will eliminate the cost associated with transporting live birds from northeast Texas to the Dallas processing plant and shipping offal from Dallas back to our protein conversion plant in Mount Pleasant. This will significantly reduce our costs and allow us to operate more efficiently. In addition, we believe it will go a long way toward helping position Pilgrim’s to emerge from the current industry down-cycle as a leaner, more competitive company.” During the second quarter, Pilgrim’s sales and volume in food service and retail rose slightly, according to the company. Export demand remained strong during the quarter, with sales, volume and pricing hitting all-time highs for the period. Year-to-date export sales are up 65% and volumes have climbed 50%. “Our partnership with JBS USA is helping us enter new markets and increase our penetration in many existing markets,” Mr. Lovette said, adding that Pilgrim’s share of the U.S. export market for chicken has climbed to 24% from 17%. For the first six months of fiscal 2011, Pilgrim’s Pride recorded a loss of $248,901,000, which was significantly higher than the loss of $12,629,000 the company suffered during the same period of fiscal 2010. Sales for the period were $3,815,166,000, an increase compared with 2010 when they were $3,350,486,000. FBN GREELEY, COLO. — High feed costs, weak consumer demand and an oversupply of chicken took a significant toll on Pilgrim’s Pride Corp. during the second quarter of fiscal 2011, ended June 26. As a result, the company recorded a loss of $128,141,000. During the same period of the previous year, Pilgrim’s Pride’s net income was $32,918,000, equal to 15c per share on the common stock. Sales for the quarter were $1,922,690,000, an increase compared with the previous year when sales were $1,707,568,000. “Pilgrim’s total feed-ingredient purchases through the first six months of 2011 were more than $400 million Snyder’s-Lance swings to loss in quarter Company acquires a northeastern snack food distributor CHARLOTTE, N.C. — Charges related to the conversion of a direct-store delivery system to an independent operator model were a factor in Snyder’s-Lance, Inc. posting a loss during the second quarter. For the quarter ended July 2, the company had a loss of $3,848,000, which compared with income of $12,405,000 during the same quarter of the previous year. Revenue during the quarter was $412,541,000, up 75% from $235,417,000. “Although our second-quarter profitability was disappointing, our company remains strong and on track to complete the integration plans laid out following the merger that created Snyder’sLance,” said David V. Singer, chief executive officer. “With the exception of our private brands products, the company’s sales and profitability are in line with our expectations. Net sales of our branded products increased by 3.5% compared to last year with solid growth in pretzels, sandwich crackers and kettle chips. Our D.S.D. integration efforts remain on track to be completed by mid-year 2012. So far, commitments from our employees and other sources to purchase the routes we have offered for sale have exceeded our internal expectations, which support our confidence in meeting our integration and D.S.D. synergy targets.” For the six months ended July 2, the company had income of $7,001,000, equal to 10c per share on the common stock, down 40% from $11,720,000, or 37c per share, during the same period of the previous year. Revenue during the six months was $801,011,000 up 75% from $457,034,000. Snyder’s-Lance also announced it has acquired all issued and outstanding shares of George Greer Company, Inc., a snack food distributor for Rhode Island, eastern Massachusetts and New Hampshire. “We’re excited to expand our directstore delivery distribution system in New England with the addition of Greer,” said Ed Good, president of S-L Distribution Co., a subsidiary of Snyder’s-Lance. “Leveraging the strengths of Greer is a great way for us to extend the reach of our D.S.D. network, expand service for our customers and enhance the longterm opportunities for our independent operators in the region.” Greer mainly distributes the Cape Cod, Lance, Archway, and Stella D’oro brands as well as other brands and private label products. FBN 12 FOODBUSINESS NEWS ® August 16, 2011

Table of Contents for the Digital Edition of Food Business News - August 16, 2011

Food Business News - August 16, 2011
Ralcorp to buy Sara Lee refrigerated dough business
Whey protein’s emerging mass appeal
Gluten-free labeling in the spotlight
Web Contents
Editorial - Search for insights in P.&G.’s farewell to food
Nestle profi t down in fi rst half of year
Sara Lee income up sharply in year
Pilgrim’s Pride’s second-quarter earnings plunge
Snyder’s-Lance swings to loss in quarter
Consumers taking active role in beverage trends
Cargill recalls 36 million lbs of ground turkey
Consumers more concerned with fat, calories than HFCS
Investment group partnering with Kettle Cuisine
Smart Balance purchases gluten-free food company
Sunsweet acquires Function Drinks
Kraft's big Split
Additional amicable separations
Ralcorp to buy Sara Lee refrigerated dough business
Ralcorp net down on impairment charge
F.D.A. warns Lazy Larry brownies are unsafe
Cott income climbs 19% in second quarter
Lower salad volumes contribute to loss at Chiquita
Restaurant Performance Index above 100 in June
Cost and taste remain barriers for functional foods
Sugar prices strong as supplies tighten
Gluten-free labeling in the spotlight
Health and wellness remains at the heart of oil innovations
Inside the guar gum bubble
Use hydrocolloids to save on costs
Dairy Business News
Conditions remain diffi cult for Dean Foods
Dean Foods suffers loss after litigation charge
Whey protein’s emerging mass appeal
Adding ethical value
Dannon adds Greek Oikos to portfolio
Caribou adds ‘Grown-up Grilled Cheese’ to menu
Beech-Nut to co-brand baby food with Mott’s
Earth’s Best expands Sesame Street line
Popchips introduces jalapeño variety
Kettle Brand launches reduced-fat chip line
Tropical fl avor line extends beyond familiar
SunOpta completes purchase of juice company
Spicetec names director of marketing
Carton protects fragile products
GPC hires scientist, sales representative
F.D.A. has no objection to krill oil’s GRAS status
Birko to buy maker of washing, pasteurizing systems
Ingredient Markets
Ad Index
Food Business in the News

Food Business News - August 16, 2011