Milling & Baking News - June 15, 2010 - (Page 1)

THE NEWS WEEKLY OF GRAIN-BASED FOODS JUNE 15, 2010 / FEATURE Aryzta deeper into U.S. baking with Fresh Start and Great Kitchens U.S.D.A. transportation study focuses on rail industry changes impact on agriculture Story on Page 25 LATE NEWS J&J Snack acquires California churro maker PENNSAUKEN, N.J. - J&J Snack Foods Corp. of California, a subsidiary of J&J Snack Foods Corp., has acquired the assets of Colton, Calif.based California Churros, a manufacturer of churros with annual sales of approximately $11 million. Churros are described by California Churros as sticks of tender dough, made from wheat flour and other fine ingredients. They are extruded through a star-shaped tube and cut into varied sizes, then fried in shortening. The churros, which California Churros makes at a 40,000-square-foot plant in Colton, are flash frozen and primarily are sold to retail/deli, food Continued on Page 8 ZURICH, SWITZERLAND - Aryzta AG has acquired Fresh Start Bakeries and Great Kitchens for a combined $1.08 billion in two separate transactions that are expected to double the Swiss-based company's manufactured volumes. "From a business perspective we will operate with a greater geographic footprint and with much better channel access to consumers," Owen Killian, chief executive officer of Aryzta, said of the newly acquired businesses. "These acquisitions double our manufactured volumes with an additional 30 production locations in 9 countries." Aryzta paid $900 million for Brea, Calif.-based Fresh Start Bakeries. Fresh Start is a global supplier of specialty bakery products with a leading position in the quick-service restaurant segment. The company operates 29 specialty production facilities across the United States, Canada, Germany, Poland, Sweden, Spain, Brazil, Australia and New Zealand. The company also has three joint ventures located in North America, Chile and Guatemala. The company that today is Fresh Start was established in the early 1960s by Harold Freund, president of Freund Continued on Page 12 Conant sees Campbell baking, snack unit well positioned for growth NEW YORK - Because it accounts for about a quarter of company-wide sales and a slightly smaller percentage of adjusted operating earnings, the baking and snack segment at Campbell Soup Co., Camden, N.J., "may at times get overlooked," said Doug Conant, president and chief executive officer of Campbell. But in remarks made at the Sanford C. Bernstein Strategic Decisions Conference held June 4 in New York, Mr. Conant spoke glowingly and at length about Campbell's "superior growth opportunities" in baking and snacking. Since 2004, Campbell's baking and snack unit has enjoyed steady growth, with net sales in fiscal 2009 reaching $1.8 billion and adjusted operating earnings of $265 million, Mr. Conant said. Organic net sales have risen at a compound rate of growth of more than 4% during the past five years, while gross margin has increased by almost three percentage points to more than 30%. "We increased marketing expense, we increased operating earnings by almost 10% annually, adding nearly $100 million over the five years, and we increased our operating margin by some four points to over 14%, while also Continued on Page 15

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Milling & Baking News - June 15, 2010