Food & Beverages

Target deserves as much investor love as Walmart

20 November 2018

Owners wiped 11 pct off the retailer’s stock after it just missed estimates. Yet soaring online revenue and a rise in same-store sales show Target, like Walmart, is dealing well with shoppers’ changing habits. Its larger rival, though, sports a better multiple on lower margins.

Beyond Meat IPO could go from rare to charred

19 November 2018

Investors who take a bite of the plant-based meat maker could get a taste of rapid growth, top-notch leaders and a way to address the looming food crisis. But the company is restricting some shareholder rights and faces competition from traditional and fellow upstart firms alike.

U.S. disposal helps clear Diageo’s sales hangover

12 November 2018

The booze giant is offloading cheap-and-cheerful drinks like Popov vodka and Black Haus schnapps to rival Sazerac for $550 mln. Forswearing discount spirits, where sales are declining, should give investors a clearer view of consumers’ demand for its more expensive tipples.

Dan Loeb wins if he loses at Campbell Soup

1 November 2018

The activist rightly blames bad dealmaking for the near-halving of the foodmaker’s share price, and wants shareholders to replace the whole board. Yet cost cuts from those bad deals should raise Campbell’s valuation whatever happens. A mass ousting is neither likely nor helpful.

Wagamama may give Frankie & Benny’s indigestion

30 October 2018

Restaurant Group is splashing out 559 mln pounds – near its market value – on the noodle chain. With its Frankie & Benny’s chain struggling, it could use Wagamama’s growth. But even if the UK doesn’t capsize post-Brexit, it looks hard for the buyer to make a tasty return.

AB InBev debt detox points to flat future

25 October 2018

The Bud owner halved its dividend to pay down a debt mountain from buying SABMiller. This should free up $4 bln annually, but it could take eight years to hit its leverage targets. Any more trouble in emerging markets will mean an even longer wait for clear heads.

Moutai makes flammable fuel for China’s stimulus

26 October 2018

As companies bid for contracts tied to Beijing’s infrastructure surge, many may toast deals with a bottle of China’s best-known liquor. The $110 bln spirit maker offers a boozy play on government spending, but a sales surge could embarrass graft enforcers, prompting a crackdown.

Patisserie Valerie fate rests on accounts’ hot air

12 October 2018

The cream cake chain will go under without fresh cash, and its CFO has been arrested. The group’s operating strength implies shareholder Luke Johnson should cough up. That hinges on whether the company’s big cash pile has been stolen, or whether the accounts themselves are rotten.

Pret’s soured image puts fat returns out of reach

11 October 2018

The ubiquitous sandwich chain is under fire after two customers died from contaminated food. When owner JAB bought Pret in May, upping margins to create lucrative returns looked straightforward. The cost of clearing up its mess now means those returns could be much less, or zero.

Tesco gives investors reason to shop elsewhere

3 October 2018

Britain’s biggest grocer is charging lower prices in its home market to fend off discounters, making it harder to hit operating profit margin targets. Doubling down with the launch of a new bargain chain may push shareholders into the arms of smaller rivals, such as Sainsbury’s.

Uber’s profitability recipe starts with Deliveroo

21 September 2018

The taxi app may buy the $2 bln European food-delivery group, says Bloomberg. It’s a hefty mouthful for a company that’s steered clear of large dealmaking. As long as Uber Eats and Deliveroo are tearing chunks off each other, though, investors have little chance of a full belly.

Mars plan for sustainable cocoa is moreish

19 September 2018

The confectioner’s $1 bln investment in the key ingredient’s “broken” supply chain benefits all from forests to farmers. As a way of getting better supplies and reassuring customers, it benefits Mars too. Other companies should feast on this kind of sustainability strategy.

Starbucks’ Italy push may help it more at home

19 September 2018

The $74 bln coffee giant unveiled a massive espresso emporium in the centre of Milan. It sounds like the equivalent of carrying coals to Newcastle. But there may be some logic here if the buzz created around the Italian launch gives a jolt to flagging sales in America and beyond.

Unilever shows wisdom of snubbing Kraft’s recipe

13 September 2018

The Dutch maker of Ben & Jerry is expanding faster, becoming a leaner company, and its investments are paying off. Kraft, meanwhile, looks light on ideas. Had Unilever accepted a merger offer two years ago, shareholders would be 15 pct worse off today.

Loeb needs Campbell Soup to taste more like Heinz

11 September 2018

The activist is trying to replace the board at the indebted $12 bln food group. He’s backing off demands for a sale, though. That leaves improving lackluster margins. Success could bring an investment win, but it’s a grind more suited to Kraft Heinz backers 3G Capital.

Sodexo’s recovery plan looks half-baked

6 September 2018

After a profit warning in March, the French catering giant wants to boost sales and profitability. Its targets still lag those of peer Compass. And boss Denis Machuel hopes to grab market share in the United States, where Compass has an edge, and staff costs are rising.

Meituan Dianping IPO demands a nemesis discount

3 September 2018

As China’s takeaway-to-taxis unicorn seeks up to a $55 bln valuation, former investor Alibaba is intensifying the rivalry. It began a loyalty plan to get customers spending more and brought in SoftBank to back its Ele.me delivery service. Bad blood should be priced into the deal.

Coca-Cola pays big price for global coffee fix

31 August 2018

The soda giant is spending $5.1 bln on the Costa chain of cafes. Justifying the frothy 16 times EBITDA multiple requires Coke to order up new markets for hot drinks. It’s another reminder of consumer groups’ lust for coffee. Investors in seller Whitbread are the big winners.

Campbell lukewarm sale pitch is begging for a cook

30 August 2018

The $12 bln soup and snack company plans to sell its fresh and international food brands, and step up cost cuts on stagnant core brands. It’s leaving the door open for a sale, but that’s unlikely to appease activists like Dan Loeb. A focused auction would be a better approach.

Yum China will struggle to get a fancier takeout

29 August 2018

The U.S.-listed KFC operator has rejected a buyout bid worth nearly $18 bln from a group led by Hillhouse. The deal already builds in supersized prospects and a hefty debt burden. A sweetened offer, given hints of weaker spending ahead, would be demanding.