Food Business News - September 13, 2011 - (Page 10)

Private label products make gains in salad, sugar categories Seaboard’s Rod Brenneman to lead Butterball SHAWNEE MISSION, KAS. — Rod Brenneman, the president and chief executive officer of Seaboard Foods L.L.C., has stepped down from his current position to become president and c.e.o. of the turkey processor Butterball L.L.C., Garner, N.C. Seaboard Corp., the parent company of Seaboard Foods, acquired a 50% stake in Butterball L.L.C. earlier this year. Mr. Brenneman, who was named president and c.e.o. of Seaboard Foods in 2001 after beginning his career with its parent company in 1989, will assist with the transition on an interim basis as he vacates his former position. Butterball is the largest turkey producer in the United States and has seven processing facilities. FBN CHICAGO — More consumers became loyal to private label refrigerated salad/coleslaw, sugar and pastry/donuts from 2008 to 2011, according to a Times & Trends Report released Sept. 8 by Chicago-based SymphonyIRI Group. The number of consumers becoming brand loyal, and not private label loyal, increased in the categories of sports drinks, shelf-stable dinners and dry packaged dinners. Brand loyalty increased across 45 of the top 100 consumer product categories, according to the report called “Brand loyalty: How understanding brand equity impacts brand loyalty and delivers to the top and bottom line.” SymphonyIRI defined brand loyal as consumers purchasing a single brand, not including private label, more than 50% of the time in a specific category. Refrigerated salad/coleslaw saw the biggest percentage shift to private label among all 100 consumer product categories from 2008 to 2011. Nearly 27% of consumers were private label loyal buyers of refrigerated salad/coleslaw in 2011, which marked a 19-percentage point increase from 2008. For sugar, 64% were private label loyal in 2011, a 7.4-point increase from 2008. For pastry/donuts, nearly 25% were private label loyal in 2011, a 7-point increase from 2008. Private label gains also came in the food and beverage categories of Mexican foods, 11% after a 2.5-point increase; R.-T.-D. tea/coffee, 5.2% after a 3.8-point increase; and butter, 68% after a 5.2-point increase. Consumers are less sensitive to price changes as brand loyalty increases, according to the report. “In sugar and butter, where loyalty is fairly low, substantial price hikes have led to sharp drops in loyalty during the past three years,” the report said. Turning to brand loyalty, sports drinks experienced the biggest percentage gain from 2008-2011. A 6.5-point increase brought brand loyalty to 88%. Shelf-stable dinners experienced a 3.7-point increase to 67%, and dry packaged dinners experienced a 3.2-point increase to 59%. For the 2011 information, SymphonyIRI used the 52 weeks ended July 3, 2011. Manufacturers and retailers seeking to protect and grow brand loyalty should consider three strategies, according to SymphonyIRI. For innovation, they should address specific needs across key and target shopper segments, such as addressing a specific nutritional need, while offering a new/experiential flavor and/or texture. For price and promotion, they should develop an understanding of price elasticity across key categories and brands and use the knowledge as the basis for all pricing strategies, SymphonyIRI said. For the third strategy, manufacturers and retailers should leverage market-level models to understand expected actual impact of pricing changes before implementing changes, monitor actual versus expected, and make real-time course corrections as warranted. Consumers affected by the economy have become frugal and continue to make purchases deliberately and cautiously, according to SymphonyIRI, but despite the prolonged economic difficulty, brand loyalty is strong and growing across a number of consumer product goods categories. “While most retailers and manufacturers will instinctively pull the lever to compete on price, it’s important to understand that consistently leading with price has significant negative impacts on brand equity,” said John McIndoe, senior vice-president of marketing for SymphonyIRI. “Rather, C.P.G. leaders must harness the power of value. The battle for the shopper’s loyalty should not be dictated by low price, and winning C.P.G. marketers are clearly getting this message.” FBN Limited avocado supply hurts Calavo earnings SANTA PAULA, CALIF. — A limited avocado supply and high fruit costs in the Calavo Foods business segment pressured net income at Calavo Growers, Inc. in the third quarter ended July 31, as earnings fell 54% to $2,713,000, equal to 18c per share on the common stock. Net income totaled $5,947,000, or 41c per share, in the same period a year ago. Sales, meanwhile, rose 44% to $165,141,000 behind sharply higher avocado sales. The company said fruit avocado prices rose more than 70% when compared with the same period during the previous fiscal year. For the nine months ended July 31, net income was $7,428,000, or 50c per share, down 43% from $13,014,000, or 89c per share, in the same period of fiscal 2010. Net sales rose 29% during the nine months to $375,180,000 from $291,117,000. FBN 10 FOODBUSINESS NEWS ® September 13, 2011

Table of Contents for the Digital Edition of Food Business News - September 13, 2011

Food Business News - September 13, 2011
Kraft’s split on schedule
Nonfat dry milk prices drop as milk output rises
Shining a light on sugary drinks
Web Contents
Editorial - Preparing for the rising cost of fresh water
Private label products make gains in salad, sugar categories
Seaboard’s Rod Brenneman to lead Butterball
Limited avocado supply hurts Calavo earnings
PepsiCo outlines path for global snacks growth
F.D.A. initiates projects to trace foodborne illnesses
U.S.D.A. study shows food insecurity down from 2009
McCormick completes acquisition of Kamis
Leadership team set for Sara Lee’s CoffeeCo spin-off
Seneca, Allens terminate merger negotiations
Human milk components the focus of partnership
JBS shifting operations in Brazil
Dannon opens new innovation center
July red meat production down 4% from year ago
Aramark to acquire Filterfresh from G.M.C.R.
Tyson Foods to ramp up prepared foods output
McDonald’s investing $1 billion in Canada
Rowland Coffee integration on track at Smucker
Food trucks transitioning from fad to trend
Kraft’s split on schedule
Restructuring charges weigh on Campbell earnings
Starbucks K-Cup Portion Packs going to grocery stores
Sanderson Farms swings to loss in quarter
Nestle completes production unit for nutrition factory
Restaurant Performance Index falls beneath 100 to 11-month low in July
Washington - Shining a light on sugary drinks
Market Insight - Nonfat dry milk prices drop as milk output rises
Health and Wellness - School lunches get slimmer
Ingredient Innovations - Possible opportunity in immunity
Flavor Trends - Fire and flavor
New Product Trends - Expanding flavors and protein sources in jerky
New Food Products - Dannon introduces Activia Selects yogurt
New Food Products - Balance Bar launches nimble bar for women
New Food Products - Nestle introducing Nescafe LiquiFresh Gourmet Blend
New Food Products - New jerky from Jack Link’s uses Cholula Hot Sauce
New Food Products - Odwalla adds Super Protein Mango smoothie
New Food Products - Frito-Lay introduces Doritos and Cheetos Fiery Fusion
New Food Products - Burger King adds Quaker oatmeal to breakfast menu
New Food Products - Lifestyle Foods launching G2 snack line
INGREDIENT MARKET TRENDS - Winter wheat planting under way except in dry Southwest
Ingredient Markets
Supplier Innovations and News - Soy blend has texture characteristics of meat
Supplier Innovations and News - Sustainable palm oil certifi cation reaches Brazil
Supplier Innovations and News - Grain Processing Corp. promotes scientist
Supplier Innovations and News - Starches offer retort, freeze/thaw benefits
Supplier Innovations and News - Red Arrow launches pot roast fl avor
Supplier Innovations and News - Takasago names v.p. of consumer insight
Supplier Innovations and News - Honey, fig flavors join balsamic vinegar line
Ad Index
Food Business in the News

Food Business News - September 13, 2011