GLG News by Nuts Experts

Rick SheaPresidentShea Marketing Consulting Inc.

Who wins , who loses with higher food prices ?

January 10, 2008

Analysis of:Higher Food prices Start to Pinch Consumers | online.wsj.com

Commodity prices continue to rise driving prices higher in the grocery aisle.Wheat ,corn,dairy and oil prices continue to climb creating a very challenging environment for food manufacturers and retailers.The rising prices begs the question of who will this benefit and who will this hurt over 2008 ? There are several distinct categories of companies that rising food costs will impact: --Branded Food Manufacturers (Kraft,General Mills,Kellogg's etc) --Value Food Manufacturers (Private Label producers,value priced branded companies) --Restaurants and Foodservice manufacturers --Grocery Retailers

Rick SheaPresidentShea Marketing Consulting Inc.

Organic and Natural Foods Go Mainstream

December 5, 2007

Analysis of:Hot Cereal , Hey It's All Natural | www.nytimes.com

Large consumer packaged goods companies are finally waking up and embracing the volume opportunity in Organic and Natural Foods.For years ,most of the top selling products at Whole Foods and other Natural stores were made by small manufacturers.Large CPG companies were not quick to offer products because the volume was still small and there are greater difficulties in the manufacturing process to produce Natural and especially Organic products. Times are changing with many key retailers now starting to embrace Organic and Natural Foods.If their retail customers want these products its important that the large CPG companies offer them as part of their product portfolio.

Rick SheaPresidentShea Marketing Consulting Inc.

Who Will Buy Wonder Bread ?

November 8, 2007

Analysis of:Twinkies Baker Opens Door To Bids | www.reuters.com

The recent article on Interstate Bakeries bankruptcy hearings now officially puts the company in play.IBC struggling from high plant and route costs and the unprecedented rise in flour costs has been attempting to emerge from bankruptcy.IBC Management has stated that their proposal values the company at  a value of at least $580mm.Yucaipa and Bimbo (Mexican bread retailer and owner of the Oroweat brand) have formed a group to propose an alternative deal.The result has been to effectively put IBC up for sale to all competing companies.

Rick SheaPresidentShea Marketing Consulting Inc.

Ralcorp to Purchase Post cereals ?

November 5, 2007

Analysis of:Kraft Near Deal to Sell Post to Ralcorp | biz.yahoo.com

Ralcorp's potential pucrhase of Post cereals for $2.8 billion dollars will shake up the cereal category and provide another stronger competitor to General Mills and Kellogg's.The winner will be Ralcorp if they can successfully integrate Post and leverage their brands to strengthen their private label sales.The losers will be Malt-O-Meal and Quaker as both brands will be under further pressure in a consoildated category.  For Kraft Foods it means their divestiture strategy will speed up and provide them additional dollars to pursue acquisitions.Kraft's growth startegy is predicated on shifting their portfolio to focus on more international growth and focusing on the key snacks,beverages and possibly confections in markets outside the US.

Rick SheaPresidentShea Marketing Consulting Inc.

Are All Food Companies Hostage to Commodity Prices in 2008 ?

November 2, 2007

Analysis of:Kellogg's 3Q profit up,warns on 2008 | biz.yahoo.com

Wheat prices are up 100% in 12 month's. Dairy prices continue to climb, increasing the costs of most food manufacturers.Is this a temporary phenomenon or is food inflation here to stay ?  Both Kellogg's and Kraft have provided disappointing guidance in the last few weeks blaming wheat and dairy along with other commodity prices as the chief culprits.Does this mean all food companies will underperform for the next year or two ? What companies are best positioned to withstand the increasing cost pressures ?

Rick SheaPresidentShea Marketing Consulting Inc.

Can food companies survive the large increases in commodity costs ?

October 24, 2007

Analysis of:Kellogg's downgraded by Citigroup | www.marketwatch.com

Commodity cost increases (wheat,corn,oil,sugar) are causing havoc with food and CPG companies bottom lines.The significant upward pressures of wheat (+100% latest 12 months) specifically impact all cereal,baking, pasta and many other food companies profits. The key questions surrounding these increases include: 1) Are companies able to take pricing to offset this increase in costs? 2) What companies will benefit the most and be hurt the most by rising commodities ? 3) What impact will it have on consumer sales if companies pass through the cost increases? 4) What % of their total P & L is tied to commodities and can they offset the increases with savings and productivity in other places ?

Rick SheaPresidentShea Marketing Consulting Inc.

Will Wonder Bread Survive?

October 11, 2007

Analysis of:Interstate Bakeries Says Unions Only Looking Out For Their Own Interests | www.topix.com

Interstate Bakeries and its unions are locked in a negotiating stalemate  over employee jobs and compensation.Specifically, IBC's management is looking for job cuts and lower costs from the unions to make the company more cost competitive.The unions obviously are seeking to minimize impact on its members and disagree with IBC's strategic plan to reorganize the company.The results will likely determine if IBC can survive and exit bankruptcy.

Rick SheaPresidentShea Marketing Consulting Inc.

Where's Kraft Foods Volume Growth ?

September 14, 2007

Analysis of:Kraft Boosts Outlook | biz.yahoo.com

Kraft Foods has reported some progress in their recent quarterly earnings but the jury is still out on whether they can show sustainable sales and growth.Kraft has underperformed its food company peers over the last few years primarily because they have gotten away from what made them successful: new products and innovation and world class marketing.  If you look at what's been successful in the last few years in CPG food its been competitors & retailers embracing the natural & organic food trend and stronger focus on catering to the alternate channels (Walmart,Target,Warehouse clubs and even drug & convenience stores). Kraft has yet to devise a strategy that taps into these growing segments and growing customers.Until they do any volume growth will only be temporary and will be unsustainable. 

Tom PirkoPresidentBevmark LLC

Coca-Cola / Pepsi-Cola Acquisitions: Strategic Planning Issues

May 28, 2007

Analysis of:Coca-Cola Is Said to Buy Vitaminwater | www.nytimes.com

Pressure to grow in new beverage categories is intense, yet the major soft drink companies are finding the costs and risks of innovation away from carbonated soft drinks to be difficult.   A competitive buying frenzy is about to begin, but can the bottlers, programmed to sell cola, effectively accommodate the new acquisitions? 

John DuffyPresidentMarketOps, Inc.

Wild Oats Still Well Behind Whole Foods

October 30, 2006

Analysis of:Organic Growth: Wild Oats May Prove To Be Better Bet Than Whole Foods | online.wsj.com

1.  Wild Oats has lacked the forward thinking of its main competitor Whole Foods in developing its retail business focused on offering natural and organic foods.

2.  While it is encouraging that Mr. Odak has been let go there are a number of key strategic issues that must be addressed for them to achieve the kind of success that Whole Foods continues to demonstrate.

3.  The organic industry is booming, representing $20 billion of retail sales in the U.S. The category is driven by produce at 42% of the market, growing at a rate of 20-25% per year.

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