Milling & Baking News Corporate Profiles - October 2011 - (Page 34)

Beverages Beverages Companies adjust prices amid recession, input cost volatility P erhaps Bob Barker could serve as narrator for a show examining the beverage industry in 2011. The former host of “The Price Is Right” would talk about how beverage companies are trying to get the price of their products just right in the face of volatile commodity costs and recession-weary consumers. For example, juice companies have found it difficult to pass along price increases to consumers while coffee companies recently have sought to lower prices as commodity costs have eased. PepsiCo, Inc., Purchase, N.Y., has played the price-point game this year. Indra Nooyi, chairman, president and chief executive officer of PepsiCo, said in a July 21 conference call that operating and financial performances in North America Beverages was below expectations. “It is the consumer and competitive picture that has become more difficult than we expected,” Ms. Nooyi said. “Consumer category demand was lower than we anticipated because overall retail foot traffic and basket sizes have declined and the category pricing environment was tough. These factors led to lower-than-expected price realization and a delay in some of our planned pricing actions.” PepsiCo’s executive make-up in the beverage category changed recently. Albert P. Carey was named c.e.o. of PepsiCo Americas Beverages on Sept. 14. Mr. Carey previously was president and c.e.o. of Frito-Lay North America, a division of PepsiCo. The same day Eric J. Foss, c.e.o. of the Pepsi Beverages Co., said he will retire on Dec. 9. Pricing also affected Dr Pepper Snapple Group, Plano, Texas. Larry Young, president and c.e.o., on July 27 said to cover higher input costs, the company will raise prices and drive incremental productivity. The Cott Corp., Tampa, Fla., said North American juice volumes declined 5% in the second quarter versus the first quarter and were down double-digit versus last year. “It’s clear that double-digit pricing we took during the quarter, up from 5% in quarter one, adversely impacted our juice volumes,” said Jerry Fowden, c.e.o. Coffee prices decline In the coffee category, some input costs actually were declining. The J.M. Smucker Co., Orrville, Ohio, on Aug. 16 said it had decreased by an average of 6% the list price for the majority of its coffee products sold in the United States, primarily consisting of items sold under the Folgers, Dunkin’ Donuts and Folgers Gourmet Selections brand names. Declines in the green coffee futures market drove the price decrease. The J.M. Smucker Co. licenses the Dunkin’ Donuts brand for packaged coffee products LEADING GROUND coffee vendors LEADING GROUND % change from year ago 13.0% 6.9% 14.0% 1.9% 16.4% 4.7% 10.4% -7.2% 21.8% 15.8% 11.2% coffee brands Dollar sales $762,477,600 $431,824,200 $256,163,500 $177,152,100 $69,908,890 $69,824,700 $55,573,270 $49,699,100 $42,856,230 $276,083,200 $2,667,982,000 1 2 3 4 5 6 7 8 9 Dollar sales J.M. Smucker Co. $1,014,426,000 Kraft Foods Inc. $481,860,100 Starbucks Coffee Co. $256,163,500 Massimo Zanetti Beverage USA $89,342,310 Peet’s Coffee & Tea, Inc. $69,908,890 Eight O’Clock Coffee Co. $69,824,700 Rowland Coffee Roasters $50,293,540 Seattle’s Best L.L.C. $42,856,230 Community Coffee Co., Inc. $41,161,650 Private label $276,083,200 Total $2,667,982,000 1 2 3 4 5 6 7 8 9 Folgers Maxwell House Starbucks Dunkin’ Donuts Peet’s Coffee Eight O’Clock Chock full o’Nuts Yuban Seattle’s Best Private label Total % change from year ago 13.9% 7.0% 14.0% 16.5% 16.4% 4.7% 17.1% 6.8% -7.2% 15.8% 11.2% Data for 52 weeks ended Aug. 7, 2011 Total U.S. - Supermarkets, Drugstores and Mass Merchandisers excluding Wal-Mart Source: SymphonyIRI 34 \ October 2011 Milling & Baking News • Food Business News • Baking & Snack • Meat & Poultry Corporate Proﬁles

Table of Contents for the Digital Edition of Milling & Baking News Corporate Profiles - October 2011

Milling & Baking News Corporate Profiles - October 2011