Delivering exciting and healthful convenience foods to on-the-go consumers led the promises of top food manufacturers as leading food marketers addressed investment analysts in late February at the annual gathering of the Consumer Analysts Group of New York.
To some extent, CAGNY featured the same faces as previous years but representing new, at least in name, companies. Mondelez International, Hillshire Brands, Kellogg and General Mills outlined similar product introductions, each announcing milk-based breakfast beverages as part of their 2013 new product rollout. Following are some of the conference highlights.
The merger and acquisition surge of the past two years is over for now, said Don Mulligan, chief financial officer for General Mills, as he announced the company's commitment to increasing shareholder returns and a share buyback program. The company had expanded its international presence with the purchase of Yoplait International, Yoki in Brazil and an Indian spice and sauce maker during the acquisition binge. But Mulligan sees no new purchases in sight as he labeled the coming year "a cash return year" for General Mills shareholders.
Set to lead the breakfast giant's new product parade is the BFast breakfast shake, intended as a nutritious "great start" beverage that delivers 8g of protein, 8g of whole grain and 3g of fiber. That's roughly the nutrient equivalent of a bowl of cereal and milk. General Mills will test market Bfast in the Northeast in chocolate, vanilla and berry flavors.
The meal of minutes got shortened again as Kellogg Co. announced national rollout of Breakfast to Go, a milk-based beverage that pres/CEO John Bryant said will "redefine cereal" for the company. The global breakfast leader, which posted sales of $14.2 billion in 2012, will market the beverage as a portable meal -- a slightly different market niche than the Special K beverage Kellogg currently positions for weight control. The company also touted the global growth of its acquisition Pringles potato chips, a market leader in Korea and Germany and No. 2 in the UK, France, Italy and Japan.
Hillshire Brands: Being "relentless on innovation" and providing relevant and "provocative" products has been the mission of Hillshire Brands since its recent spinoff from Sara Lee, noted CEO Sean Connolly. The rapid flow of new products seems to validate his claim. Already the company has introduced premium deli products under the Black Label brand, lean hot dogs from Ball Park, flatbread sandwiches under the Jimmy Dean brand, new Aidells products and State Fair hot dogs.
Connolly also pointed to the company's success in breakfast products as evidence of innovation and the effectiveness of its strategy. Its Jimmy Dean breakfast sandwiches offer a protein-rich alternative to the high-carbohydrate, grain-based options that the industry has pushed in its breakfast offerings. The company will bring that same innovative approach to its Aidells line this year as it introduces a chipotle barbeque meat loaf and chicken meatballs made with habaneros and green chilies. Connolly also promised indulgent breakfast sandwiches, including a two-patty product in the Jimmy Dean line.
The first presentation to investment analysts from the global confectionery giant since its spinoff from Kraft last October was a confidence builder delivered by Irene Rosenfeld, chairman and CEO – who held those same titles at former parent Kraft Foods. "I'm bullish about our future," she said, acknowledging disappointment with recent performance but claiming "strong momentum" in revenue and earnings heading into 2013.
Rosenfeld pointed to "iconic brands" such as Oreo cookies and 75 percent of company revenues coming from the strong and growing international snack category to support her optimism, noting that both biscuit and chocolate categories have posted 6 percent growth over the past three years. She buttressed the company's ambitious growth expectations by noting its strong position in growth markets, with 40 percent of revenues currently coming from developing markets. Capital investment will climb 5 percent to support growth plans. She also noted that the company's coffee business – the overseas Jacobs brand, not Maxwell House, which remains with Kraft – is enjoying 10 percent category growth. It will benefit from lower coffee prices and expanded internal manufacturing capacity in the second half of the year.
The Omaha-based food giant reviewed its Recipe for Growth, but the hot news was the closing of ConAgra's purchase of Ralcorp less than a month earlier. CEO Gary Rodkin noted that the Ralcorp acquisition elevates corporate sales to a projected $18 billion and strengthens ConAgra's position in the growing "private brands" area fourfold, with presence in key categories such as cereal, pasta, sauces, spreads and snacks, and market-leading private brand share in 14 of the 20 categories where it now competes.
Rodkin underscored the company's record of corporate citizenship as well, noting ConAgra's second consecutive appearance on the North American Dow Jones Sustainability Index and first listing on the World Index, a testament to the company's environmental, social, management and philanthropic record. "We've also earned recognition from the Carbon Disclosure Project and made both the 'Civic 150' and '100 Best Corporate Citizens' lists," said Rodkin, underscoring the company's commitment to fighting child hunger.
Andre Hawaux, president of the Consumer Foods group, indicated growth in net sales, margin and market share in the frozen foods category. The company has doubled sales of its popular Callender Bakes line, and it recently introduced Healthy Choice baked entrees.
"Our plans for stabilizing and rebuilding the profitability of our Soup and Simple Meals business in North America is working," said Denise Morrison, pres/CEO of Campbell Soup, underscoring company progress toward the first of three growth strategies, which also include international expansion and growth in healthy beverages and baked snacks. She noted Campbell's corporate commitment to "expand into higher-growth spaces, to engage with new consumers and to build our business in new geographies."
Campbell will advance its "Healthy Beverages" strategy by introducing V8 V-Fusion Refreshers, "a new line that offers a crisper, lighter taste for consumers seeking greater refreshment," and expanding on last year's launch of V8 V Fusion + Energy, a line of green tea-based beverages.
Morrison identified other areas of Campbell innovation, including Campbell's Go Soups and Campbell Skillet Sauces. The acquisition of Bolthouse Farms positions the company for additional growth in the super-premium beverages segment, within which it currently holds a market leading position.
International highlights include recent agreements with Grupo Jumex and Conservas La Costena to expand the company's distribution and sales of beverages, soups and sauces to the Mexican market.
This article originally appeared in the March 2013 issue of Food Processing Magazine.