Food Business News - February 23, 2016 - 10

WhiteWave broadening its Horizon

DENVER - The WhiteWave Foods Co. continues
to expand its Horizon brand
beyond the organic milk
category as new non-dairy
products in the portfolio contributed to strong growth in
the past year. Net income for
WhiteWave in the year ended
Dec. 31, 2015, was $168 million, equal to 96c per share
on the common stock, up
20% from $140 million, or 81c
per share, in 2014. Net sales
for the full year were $3,866
million, up 13% from year-ago
sales of $3,437 million.
"When we take a look at
the broader Horizon business,
we are incredibly pleased
with what we saw in 2015,"
said Blaine McPeak, chief

operating officer, during a
Feb. 11 earnings call with
financial analysts. "It had
some of the strongest growth
across our company, with
growth in the teens here.
That's off of an organic milk
category that is growing high
single digits... At the same
time, we are seeing these
extra
adjacencies
really
contribute to our top-line
growth perspective."
Within the past couple
years, WhiteWave has added
macaroni and cheese, cookies,
crackers and squeezable fruit
snacks under the Horizon
banner. Along with shelf-stable
single-serve milks, Horizon's
center-store platform represents a "couple hundred

million dollar business" that is
growing at an accretive rate,
Mr. McPeak said.
"We are really going to focus
on velocities and continuing
to build the strength of that
portfolio as well as some
selective innovation here,
in particular in the mac and
cheese area," Mr. McPeak
said. "And beyond that, we see
nice runway as well in other
adjacent dairy categories,
be that cheese or butter or
yogurt. And we have seen nice
strong growth in those areas,
double-digit growth, that has
been added to our top-line
profile as well.
"I think it all reflects that we
have a very, very strong brand
that has great credence with
moms. And we continue to
look to build upon the strength
in the core milk category, as
well as extend that a little bit
further in others."
Net income for the fourth
quarter rose 46% to $48
million, or 28c per share,
from $33 million, or 19c, for
the prior-year period. Net
sales increased 13% to $1,028
million from $911 million.
WhiteWave's Americas Foods

and Beverages segment, which
includes plant-based foods and
beverages, coffee creamers
and beverages, and premium
dairy, posted full-year net
sales of $2,768 million, an
increase of 18% over the prior
year, driven by volume growth
and aided by pricing benefits
within the premium dairy
platform. Operating income
for the segment increased 26%
to $334 million for the year.
Net sales for the Americas
Fresh Foods segment, which
includes the Earthbound
Farm brand, fell 2% to $566
million for the year, as
9% growth in the organic
packaged salad category
was offset by a decline in
fresh fruits as a result of
the company's decision to
rationalize the lower-margin
business. Operating income
declined 47% to $25 million
for the year.
For the year ahead,
WhiteWave expects to deliver
constant-currency net sales
growth of 11% to 12% and
adjusted operating income
growth in the high teens to
low-twenties on a constant
currency basis. FBN

Pilgrim's Pride plans sizable strategic investment
GREELEY, COLO. - Pilgrim's
Pride Corp. has unveiled a
$190 million strategic capital
investment plan designed to
enhance growth and expand
production of Pilgrim's Pierce
Chicken brand, which is marketed and sold to food service
operators. The effort, initiated in the fourth quarter
of fiscal 2015, is part of
a focused effort to reinvest cash flow back into
the business to support sustained margin
growth and improve
efficiencies, Pilgrim's
Pride said.
"We believe one of our
competitive advantages is the

FOODBUSINESS NEWS

valued partnership we provide
to key customers," said Bill
Lovette, president and chief
executive officer. "Our cash
flow reinvestment plan will
present opportunities for our
customers to accelerate sales,
improve profitability and grow
their businesses."
Pilgrim's Pride said the
cash flow reinvestment plan
is tailored to meet customer
needs through targeted capital spending in feed production, fresh chicken and prepared foods, including caseready. Strategic investments
within the plan include:
* An $18 million investment
at a Pilgrim's case-ready facility

to streamline deboning and
packaging processes;
* A $25 million investment
at the company's Moorefield,
W. Va., prepared foods facility to enhance existing fully
cooked chicken lines and add
an additional line to meet
growth demands for the Pierce
Chicken brand;
* A $35 million investment
to acquire property and construct a new feed mill in Nashville, Ark., to lower feed costs,
enhance feed conversion and
improve live poultry performance; and
* A $20 million investment
at the company's Mayfield, Ky.,
poultry complex to reengineer

the facility to improve its value-added product mix in alignment with the needs of a key
customer. The project will result in the addition of approximately 150 new jobs in 2016.
"We are excited to have the
opportunity to leverage our
strong balance sheet to reinvest into our company," said
Fabio Sandri, chief financial
officer. "Our strategy remains
to explore every opportunity
at our disposal to grow our
business and create shareholder value. Today's announcement reinforces Pilgrim's commitment to operational excellence, sustainable growth and
margin creation." FBN

February 23, 2016

Food Business News - February 23, 2016

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