Food Business News - February 11, 2014 - (Page 20)

Meat costs will hinder Hillshire in second half All of the fiber. Fiber Caloric Reduction Non-GMO Easy to Use Non-allergenic Heat & pH Stable Sugar Reduction Texturizer Great Fiber Recovery Insoluble & Soluble Versions None of the negatives. PenFibe® Non-GMO Fiber Line: Give your health and wellness products a boost of fiber and caloric reduction - without affecting their taste or texture - with this unique line of non-GMO fibers. For the most innovative food ingredients and solutions, choose Penford. 800-652-4732 Food Ingredients 20 FOODBUSINESS NEWS ® CHICAGO - The cost of beef and pork, specifically sows, will continue to challenge Hillshire Brands through the second half of the year, the company said Jan. 30. As a result, Hillshire is focusing on cost reduction and pricing. "We expected input costs to be higher this year, but not anything like what we've experienced," said Sean Connolly, chief executive officer, during a conference call with financial analysts. "The increases we've seen in the pork and beef markets exceeded all of our forecasts and have driven major cost increases." Maria Henry, chief financial officer for Hillshire, drilled deeper into the issue of input inflation. "The areas that they're rising continue to be in beef and in sows and the outlook on P.E.D.v (porcine epidemic diarrhea virus), that one's tough," she said. "We watch very closely the number of new reported cases on that, and while we're very hopeful that one of the vaccines that is being developed, as people try to combat this will work, that remains a variable for the second half of the year." Rabobank's quarterly pork report, which was published Jan. 30, said the global implications of P.E.D.v, which has been found in Canada, Mexico and the United States, are unknown. But the banking firm did say it expects the impact to the United States to be more severe than the U.S. Department of Agriculture is currently projecting, and that it likely will hamper U.S. pork production growth into 2014. For the quarter, Hillshire Brands' operating income fell 23% to $116 million. Sales for the quarter rose 2.1% to $1,082 million. "Our overall company sales growth was driven by pricing, which we took to offset higher input costs, and also by favorable mix in both (retail and food service) segments," Ms. Henry said. "Gross profit dollars and rate were down versus last year, primarily as a result of significantly higher input costs." Mr. Connolly said much of the pricing taken during the second quarter was on seasonal items and that the company benefited from customer loyalty associated with holiday recipe usage of the products. The pricing taken during the The increases we've T seen seen in the pork and beef markets exceeded all of our forecasts and have driven major cost increases. . - Sean Connolly, chief executive officer, Hillshire Brands d half f h ill be second h lf of the year will b on core i items. In an effort to mitigate any negative elasticity from the price increases, Mr. Connolly said the company will spend more on marketing and promotion and new product innovation. "In the second half of this year, we have exciting new innovations coming on a number of our core brands and some new news from our Golden Island acquisition as we build our presence in the very promising jerky category," he said. For the first half of fiscal 2014, Hillshire Brands' total operating income was $171 million, a 44% decline from the first half of fiscal 2013 when it recorded an operating income of $215 million. Sales for first six months rose 1.6% to $2,066 million. FBN Meijer to build dairy facility in Ohio GRAND RAPIDS, MICH. - Meijer, a retailer that operates 204 supercenters and grocery stores throughout Michigan, Ohio, Indiana, Illinois and Kentucky, has signed on to build its first Ohio-based dairy production facility in the Dayton region. The Tipp City, Ohio, plant will employ 103 and produce milk and a variety of other dairy products for Meijer's stores as part of the $100 million investment. "Meijer is very pleased to continue our investment and growth in Ohio," said Rick Keyes, executive vice-president of supply chain operations and manufacturing for Meijer. "With 42 stores and a major distribution complex, Ohio is a very important state for us. This new facility will help support our continued growth as a company as well as our continued success in Ohio." FBN February 11, 2014

Table of Contents for the Digital Edition of Food Business News - February 11, 2014

Food Business News - February 11, 2014
Post to buy PowerBar from Nestle
Beverage ingredients in the spotlight
Beef prices are red hot
Table of Contents
Web Contents
Editorial - Cause marketing gaining momentum
Green Mountain, Coca-Cola form partnership
McDonald’s is learning less is more
F.D.A. proposes sanitary food transportation rule
Price increase still planned for Chipotle
Inside Tyson Foods’ prepared foods strategy
Beef, chicken drive gains for Tyson
Meat costs will hinder Hillshire in second half
Meijer to build dairy facility in Ohio
Hershey seeks to set new bar in spreads
Washington - Putting the new farm bill in focus
Health and Wellness - Digesting the additional benefits of gut health
Are designer fibers on the horizon?
Ingredient Innovations - Making cereal more satisfying
More satiety strategies
Beverage Business News - Beverage ingredients in the spotlight
New Food Products
Ingredient Market Trends - Weather woes continue to affect markets
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - February 11, 2014