Food Business News - October 23, 2012 - (Page 56)

the shop,” he said. “It stands for exhilaration and it is the theme is it is what we do and it’s brought to life through action sports. This brand is all about young men between 16 and 32, 34, and it’s a lifestyle product.” Targeting this demographic with a campaign featuring celebrities popular with teens, Mr. Carey said Mountain Dew has been positioned as “the safe energy drink and it plays in that space.” In the period leading up to his presentation, Mountain Dew sales were up 6%, which Mr. Carey described as a “big number.” More broadly, Ms. Nooyi was positive about the carbonated drink business after their third quarter results were issued. “Based on the IRI all-channel data, we gained both value and volume share in the quarter,” she said. “So, even with higher pricing at retail, we grew our volume share. Our brand equity scores are strong, and our brand-building investments are working.” On the other hand, the noncarbonated business, which had been the stronger piece of the Pepsi beverage portfolio in recent years, did not do well. Slow momentum has reduced exuced d-calorie pectations for Pepsi’s mid-calorie soft drink. ed “Our noncarbonated e beverage performance in North America was more challenged, driven by three factors,” Ms. Nooyi said. “First, we cleaned up our juice g portfolio by pulling out of unprofitable juice drinks. Second, we made deliberate decisions not to compete in case-pack water at unprofitable pricing levels. And third, Gatorade’s performance was off this quarter, which is really a function of competitive pricing actions and an inventory outage at one of our major accounts. Q4 is off to a good start, and we expect the business to be positive for Q4.” Mr. Carey tagged Gatorade as the “big drag in Q3.” He said the brand already has begun to show signs of revival in the fourth quarter, driven by a Tingyi partnership poised for flight PURCHASE, N.Y. – An upbeat outlook for PepsiCo’s new strategic beverage alliance in China was voiced by Indra Nooyi, chairman and chief executive officer of PepsiCo, Inc., in a conference call with investment analysts. Ms. Nooyi spoke Oct. 17 in a call following the release of third quarter financial results. In March, PepsiCo completed the transaction forming an alliance with Tingyi (Cayman Islands) Holding Corp., a leading food and beverage company in China. Under the deal, Tingyi’s beverage subsidiary – TingyiAsahi Beverages Holding Co Ltd. (TAB) has become PepsiCo’s franchise bottler in China. The country is expected to become the world’s largest beverage market by 2015. In the call, Ms. Nooyi said the Tingyi integration is “substantially complete” and that volume growth has grown steadily since June. Still, Ms. Nooyi said the fastest growth is still to come. “We haven’t yet started to reap the benefits of the increased Tingyi manufacturing footprint because we haven’t yet pulled the cold fill lines in the new Tingyi plant,” she said. “So, the benefits you are seeing now is just a benefit from our own brand equity.” The potential for the partnership is extraordinary, Ms. Nooyi said. “The alliance between PepsiCo and Tingyi creates the largest beverage company in China with a 1.5 to 1.6 relative market share versus the next largest competitor,” she said. “Between us, we will basically cover the entire country and have over 70 plants (versus 20 before the alliance) between the two of us in China. So, I think 2013 and forward this business is going to look very, very good.” More generally, Ms. Nooyi said she is optimistic about the business outlook for China. Responding to a question, she said she has been there three times this year and would be returning still again this month. The slowdown in economic growth is a significant issue in the country but should not be overblown, Ms. Nooyi said. “From a consumer product perspective, especially on small ticket items which are very basic food and beverage products, you don’t really see the impact in our categories,” she said. “And, in every city that I have been in China, and I’ve crisscrossed the country, there is buoyancy. There is a certain optimism in the country. Of course, everybody would like the growth to go back to 9% or 10% in China, but at 7.8%, I still think China is performing at the peak of its game versus all the other countries in the region, or in the world today.” BBN 56 FOODBUSINESS NEWS ® October 23, 2012

Table of Contents for the Digital Edition of Food Business News - October 23, 2012

Food Business News - October 23, 2012
Private label penetration forecast to grow in U.S.
Softer demand slows rate of Nestle sales growth
Drought’s impact becomes clearer
Table of Contents
Web Contents
Editorial - Food issues dampened before election
Culver acquisition boosts B&G third-quarter income
Foreign exchange rate cuts into McDonald’s earnings
Structural changes cut into PepsiCo sales in third quarter
Legislation proposed to track antibiotic use on farms
Dean Foods posts preliminary WhiteWave-Alpro results
California poultry processor files for Chapter 11 protection
Peapod testing virtual grocery stores in the Northeast
Shell egg prices push Cal-Maine income up sharply
ConAgra to close pork processing plant
Cereal Partners Worldwide to reduce sugar, sodium
Frozen food sales projected to remain sluggish
New food safety effort targets consumers
ConAgra Foods looks to heighten focus on nutrition addition
Cholesterol profile of U.S. adults improving
Food and beverage C.P.I. increases in September
Strong China results boost Yum! earnings
Global Greek yogurt introductions accelerate
Sunland recall reverberates throughout the industry
JBS USA has option to acquire XL Foods
Washington - F.D.A. issues guidance for food facility registration
Sports Nutrition - Broadening the appeal for sports nutrition products
Ingredient Innovations - Ushering in the next generation
Convenience Store Trends - On-the-go gourmet
Beverage Business News - Looking for a Pepsi rebound
Old Orchard debuts frozen sweet tea line
Red Bull to add fruit-flavored energy drinks
Lawsuit takes aim at New York’s 16-oz beverage rule
Coca-Cola profit climbs on volume growth
Beverage industry embraces calorie counts on vending machines
Journal report links sugary beverages to obesity
Tingyi partnership poised for flight
Beverage still tops at Pepsi...barely
Beverage Trends - An (energy) shot in the arm
New Food Products
Ingredient Market Trends - CME Group to acquire the K.C.B.T
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - October 23, 2012