Food & Beverages

Alibaba’s $2 bln food sale hints at indigestion

17 July 2018

The e-commerce firm is raising new funds from outside investors for its meal delivery arm Ele.me, media reports. This comes just three months after Alibaba took full control of the unit. Rival Meituan's mooted $4 bln Hong Kong flotation might be giving Jack Ma stomach jitters.

Rotten food is least of UK grocers’ Brexit worries

11 July 2018

British supermarket operators worry that failure to reach a deal with the EU would see goods stuck at the border. More serious is the prospect of tariffs on imports from the bloc. That would leave them scrambling to protect thin margins and their market share from foreign rivals.

Smucker sells inconvenient Doughboy

10 July 2018

The jam maker is shedding Pillsbury and other baking brands for $375 million because of soft sales. It sees a brighter future in snacks, coffee and pet food. But as PepsiCo’s Frito-Lay unit shows, consumers aren’t shunning unhealthy foods, just those that require a little effort.

Premier Foods CEO heave looks like M&A appetiser

10 July 2018

Activist Oasis has upped its stake in the maker of OXO cubes to oust boss Gavin Darby. Its plan to sell Batchelors soup could cut borrowing and loosen top investor Nissin’s grip, making the rest a takeover target. It’s a more appealing prospect than low growth and high debt.

Dan Loeb hits limits of “constructivism” on Nestlé

2 July 2018

A year after disclosing a stake, the activist investor called on the Swiss giant to shake up its business and board. Though his ideas make sense, progress has been slow and the stock has lagged. He could take a more muscular approach, but only if other shareholders go along.

Chobani swaps TPG for something sweeter

28 June 2018

The buyout firm exacted a high price for helping the yogurt-maker out in 2014. Now Chobani has found a Canadian pension fund to help show TPG the exit. Chobani’s value may have increased by more than 50 pct in four years. Private equity may have been unpalatable, but it worked.

Premier Foods’ Japanese flavour has turned stale

28 June 2018

Top shareholder Nissin’s stake in the Mr Kipling maker has fared poorly, but a beneficial commercial deal ensures its support. With activist Oasis pushing for CEO Gavin Darby’s ouster, it’s time for the Tokyo-based company to start thinking like an investor.

Conagra boss finally gets his Hungry-Man and more

27 June 2018

With an agreed $10.9 bln purchase of Pinnacle, Sean Connolly seals the deal on a takeover of the motley crew of slow-growth grocery goods he has pursued since 2014, when he ran Hillshire. But it’s a high price and ambitious cost cuts don’t cover the premium he’s paying.

Diageo could use a chaser as it runs up China tab

26 June 2018

The British booze giant wants to spend some $900 mln to own a majority of Sichuan Swellfun. A rally in baijiu stocks means Diageo is buying high again. Absolute control offers defensive value, but a broader strategy will be equally important against $150 bln Kweichow Moutai.

Jack-of-all-apps Meituan masters few for IPO

25 June 2018

The unprofitable Chinese tech firm revealed in its Hong Kong debut plans that food delivery, travel and a handful of other areas account for over 90 pct of revenue. To justify a possible $60 bln valuation, investors will have to believe it can succeed in more cutthroat markets.

Conagra food deal could leave heartburn

22 June 2018

The $15 bln owner of Hebrew National and Reddi-wip could tie up with smaller rival Pinnacle after hedge fund Jana has come calling. Bulking up is one way to fight slow growth as consumers shift from processed fare. But justifying a deal requires cost cuts which may be a stretch.

Starbucks plots a skinny-latte future

20 June 2018

The coffee chain is serving slowing sales in the U.S. and China, and a lukewarm valuation. Boss Kevin Johnson is using his tech background to attract customers, but still faces venti-sized challenges. Starbucks is shaking up the menu. It could also consider slimming down faster.

DSM extracts vigorous returns from healthy planet

20 June 2018

The Dutch company which once mined coal now makes food supplements and fibres. New targets suggest sustainable businesses can deliver high single-digit EBITDA growth. Though investors’ expectations are already high, up to 3 bln euros for acquisitions promises a further boost.

Judges supplement U.S. defences on China trade

15 June 2018

The Supreme Court said courts shouldn’t take foreign governments’ claims about their own laws at face value. The underlying case, over vitamin price-fixing, rumbles on. This decision attacks an inconsistency Beijing has exploited in arguing firms are just following orders.

Hotpot IPO may offer a tasty dip

6 June 2018

One of China’s top hotpot chains is eyeing a $700 mln debut in Hong Kong. It has dealt adeptly with hygiene scandals and is a splash with local consumers, growing blisteringly fast. A push to take its Sichuan cuisine to smaller cities is also something promising for investors to munch on.

Pret A Manger is new pawn in global coffee wars

29 May 2018

JAB is acquiring the UK food outlet for $2 billion. After spending roughly $30 bln on coffee and food chains over the past two years, the German conglomerate is a growing threat to larger rivals Nestle and Starbucks. An agile and ambitious model gives it a good shot at success.

Latest M&S overhaul lacks a clear price tag

23 May 2018

The UK retailer will close 100 stores in an attempt to reverse falling like-for-like food and clothing sales. The revamp, sped up by new Chairman Archie Norman, set the group back half a billion pounds last year. With few details about future costs, investors can shop elsewhere.

Ocado investment case requires heavy guesswork

17 May 2018

The UK retailer’s shares rose 45 pct after U.S. grocer Kroger agreed to use its online-delivery technology and take a 5 pct stake. The deal solves Ocado’s cash flow problems. But a valuation of almost four times sales is toppy given scant detail on its international partnerships.

Walmart wages dangerously big online war in India

9 May 2018

Even as an e-commerce push at home stumbles, the mega-retailer is plowing $16 bln into Flipkart. It pits Walmart against Amazon in a huge unprofitable market, and also challenges Alibaba, which backs Paytm Mall. After missteps in China, this will be a make-or-break overseas deal.

Scent makers’ $7 bln M&A splash-on has funny smell

7 May 2018

IFF is touting cost cuts worth almost double the premium it’s paying for Frutarom. The deal also sprays the buyer with a healthy dose of products made with natural ingredients. But IFF’s investment return looks low. That may be why investors are turning their noses up at it.