Food & Beverages

Unilever is half way there on Kraft challenge

20 July 2017

The Marmite maker has cut costs faster than expected, reducing ad spend and paying less to its suppliers. Its 20 pct operating margin goal looks reachable. Yet with U.S. rival Kraft Heinz free to reprise its hostile bid next month, volume growth is too low for comfort.

Let venture capitalists subsidize your life

19 July 2017

Frustrated by an inability to invest in unicorns? Try another strategy. VCs and other investors lose money funding vendors of meal kits, car rides, music, data storage, and even household necessities. Here’s how to live well off Silicon Valley’s obsession with the future.

McCormick may struggle to digest $4.2 bln deal

19 July 2017

The $12 bln spice vendor is paying a fat 20 times EBITDA for the mustard and hot-sauce business of Reckitt Benckiser. With modest synergies in prospect, McCormick will need strong growth to pay down debt. Investors have reason to question the acquisition’s aftertaste.

Carrefour unit shows way to Brazil IPO revival

19 July 2017

The French supermarket chain’s local unit raised $1.6 bln in the country’s biggest stock offering in four years. Rising deal flow suggests growing confidence Latin America’s largest economy is getting back on track. But the recovery’s pace is tepid, and sensible pricing is key.

Reckitt shows bigger rivals how it’s done

19 July 2017

The UK company sold its French’s Mustard unit to U.S. food group McCormick for $4.2 bln, a spicy 7.4 times sales – even though there’s no recovery story and limited synergies. With buyers this hungry, less efficient peers Unilever and Nestlé ought to emulate Reckitt’s recipe.

Mayo board’s exodus sets spicy governance example

18 July 2017

Hampton Creek may have used dodgy methods to boost sales of its eggless mayonnaise. Now most of the Silicon Valley startup’s directors have quit after they clashed with the co-founder and CEO. It’s a last resort, but boards at Theranos and Uber, for example, might have tried it.

Campbell Soup deal is mmm mmm meh

7 July 2017

The canned-cream-of-mushroom-to-Goldfish-crackers maker is buying organic-focused Pacific Foods for $700 mln. Like other big grocery brands, Campbell finds itself squeezed by such rivals. At more than three times sales, it's a steep price to pay to try and get healthier.

Danone could be next serving for hungry activists

5 July 2017

Low margins and poor investor returns mean the French maker of Activia yoghurt is a logical target. While an earlier campaign by U.S. activist Nelson Peltz had modest success, Third Point’s new stake in Nestlé and President Macron’s pro-business agenda argue for a fresh look.

Ocado has a delivery problem to fix

5 July 2017

The UK online grocer’s pre-tax profit fell in the first half and net debt is rising. Its big dream of selling cutting-edge technology to other retailers generates less than 10 percent of revenue. Rapid delivery is imperative at a time when Amazon is prowling the aisles.

Stonyfield deal whipped up by U.S. yogurt frenzy

3 July 2017

France's Lactalis is paying 20 times EBITDA for Danone's yogurt brand, or $875 mln. While American demand has propelled upstarts like Chobani to multibillion-dollar valuations, growth has slowed. It may be hard for the old-school label to woo new consumers.

Nestlé can ignore all Dan Loeb’s ideas bar one

3 July 2017

Of the four demands activist Third Point put to the Swiss giant’s board, just one is worth pursuing. Share buybacks, selling divisions and a sale of Nestlé’s L’Oreal stake wouldn’t obviously juice up the share price. Old-fashioned margin improvement holds the most promise.

Rocket cleans its plate in Delivery Hero IPO

30 June 2017

Floating its food delivery offspring for 1 bln euros is a much needed success for the German tech investor. It sold the maximum number of shares at the top end of the price range. The only snag is that there’s not a great amount left on the table for outside investors.

Viewsroom: Blue Apron’s debut leaves bad taste

29 June 2017

The meal-kit delivery firm had an unappetizing IPO, barely opening above its much-reduced price of $10 a share. Investors are starting to wise up to fluffy concoctions with little meat. The more discerning environment will make it difficult for half-baked companies with high risk.

Blue Apron cut suggests investors have discernment

28 June 2017

After feasting on Snap's nutrition-free IPO, it's healthy to see potential owners forcing the meal-kit maker's price down a third. Blue Apron's numbers were unappetizing even before Amazon's Whole Foods deal. Palates with a more refined taste for risk may find it digestible.

Head-office heave shows Tesco’s weak hand

28 June 2017

The British supermarket is cutting a quarter of staff at its headquarters. This should help with plans to remove 1.5 billion pounds of costs and hit an ambitious 3.5 pct-4 pct margin target. Job losses are an unfortunate symptom of Tesco's limited pricing power.

Nestlé serves up only semi-sweet buyback

27 June 2017

Days after being put on the spot by Dan Loeb, the Kit Kat maker said it would repurchase up to $21 bln of shares over three years. It's an incremental step, like a review of the U.S. candy arm. Ignoring bigger issues, however, could allow the activist to marshal more support.

Nestle’s big problem is its crunchy governance

26 June 2017

Hedge fund Third Point’s ideas for the Swiss maker of KitKat are sensible but obvious. Nestle is already weighing up asset sales. It has set and missed targets before. Shaking up the company’s slow-moving culture would achieve more – starting with a new chairman.

Nestle gives Dan Loeb an Alpine peak to climb

26 June 2017

The pushy billionaire has set his sights on the Swiss Alpo-to-Perrier producer. Consumer groups such as P&G and Pepsi have proven tough activist targets. Loeb clearly likes a challenge, having recently agitated in lethargic Japan. And $263 bln Nestle may be a movable mountain.

Diageo deal has pension chaser for George Clooney

21 June 2017

The drinks giant will pay up to $1 bln for a tequila brand founded by the actor and two buddies. Casamigos is a fast-growing firm ripe for international expansion. The worm in the bottle is that Clooney has to promote the tipple until he turns 66 to collect the full check.

Blue Apron’s $3.2 bln debut could be its best dish

19 June 2017

The meal-kit service is cooking up an IPO valuation of about three times sales. Despite hot growth, though, losses are rising and rivals, maybe including the Amazon-Whole Foods combo, will make profitable expansion tough. The spicy offering price could be as tasty as it gets.