Food Business News - March 24, 2015 - (Page 22)

C-Suite insight: C.P.G. at a crossroads Shake It Up! At SensoryEffects we customize the functionality of your products. Our systems impart superior flavor, body, texture and appearance to a wide variety of nutritional products including: Sports Nutrition Meal Replacement Functional Beverages Dietary Supplements Medical Foods Nutritional Creamers Contact us if you'd like to take the ordinary and turn it into something extraordinary. Toll Free: 800.251.3033 22 FOODBUSINESS NEWS ® CHICAGO - The market for consumTh k f er packaged goods is in the midst of a volatile period. While some commodity costs, most notably oil, have declined, structural changes at the retail level, with some retailers shrinking the space allocated for center-store offerings, are challenging some of the industry's largest companies. "When you look at the big C.P.G. companies, they are making less money and they are struggling with certain pieces of demand," said Chris Nay, senior managing director of food and beverage for GE Capital. "Middle market companies out there in the health and wellness category are seeing a consumer who is much more educated about diet today. "This is starting to come into play with retailers. You look at retailers like JewelOsco or Mariano's, which are focused on fresh, whole food distribution. JewelOsco still has a tremendous, packaged goods section but there is no doubt the consumer is moving to outside the center of the store. There is still a huge market in C.P.G., but growth has been soft. "The whole foods category, the natural and organic segment, is taking the business by storm. I think it boils down to the C.P.G. companies are really struggling to figure out the millennial world. Millennials are health conscious, and some companies are starting to deliver that to them." Mr. Nay said the low price of oil has the potential to propel consumer demand for products with a premium positioning. "The low price of oil is putting more money into the consumers' pockets," he said. "Both the away from home and at h b fi i d hi k home sectors are benefiting, and I think it bodes well for the manufacturers of higher price food products. There is a wind at the consumer's back, and we see the pull of value lessening. Value is still important, you will still see it at Wal-Mart and others, but I think you are starting to see the consumer be willing to pay a little extra when they go out to eat." He noted that he is seeing the increased demand reaching the quick-service restaurant category, where Mr. Nay said, "Everyone is trying to copy Chipotle." "The consumer likes that fresh ingredient feel that is out there," he said. "You are even seeing McDonald's talk about it. I think away from home will benefit more. It's the convenience factor; the consumer is looking for that convenience." In his role with GE Capital, Mr. Nay works with middle market companies, those with sales between $50 million and $1 billion in sales, and he sees that segment of the market faring well in this period of volatility in food and beverage. "Most are not ingrained in how they have done things for 20 years," he said. "Many are creating products for the consumer that are catching fire. "Middle market companies are better suited to develop new brands and products. It is coming from the retailers. The retailers are looking to companies to coinnovate. Those middle market companies are more apt to do that. Big C.P.G. companies are pushing their products on retailers. I think some C.P.G. companies do that (co-innovate) a little bit, but the retailers need that next big thing, and I think middle market companies are more open to working on it." FBN March 24, 2015

Table of Contents for the Digital Edition of Food Business News - March 24, 2015

Food Business News - March 24, 2015
Inside General Mills’ new approach to innovation
Nestle pursuing nutrition-based treatment for autism
Dairy Business News - Inclusion innovation: More than a chip or a chunk
Table of Contents
Web Contents
Editorial - Flexibility is needed to meet new opportunities
Kind raising the bar with innovation
McDonald’s to unlock power of local regions
Lancaster Colony acquires flatbread maker
SodaStream going after Keurig
Six forces shaping natural, organic product development
Stevia slow to penetrate confectionery market
C-Suite insight: C.P.G. at a crossroads
Kroger’s Simple Truth sales hit $1.2 billion for year
Private equity firm buys American Beverage Co.
Washington - Dietary Guidelines coming into focus
Market Insight - A `normal’ year for U.S. crops?
Health and Wellness - Shining a health halo over protein
Meat industry criticizes D.G.A.C. recommendation
Ingredient Innovations - Number of proposed pho alternatives widens
Still no timetable for final GRAS rule
Company Profile - Mondelez gaining momentum
New Food Products
Natural Products Expo West/Engredea
Ingredient Market Trends - Millers forecast soft red winter wheat crop at 381 million bus
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - March 24, 2015