Contributing Member of the Consumer Goods & Services Councils

GLG News by this Author

Can Cadbury Grow?

October 5, 2009

Analysis of:Cadbury’s Stitzer Says Acquisitions May Feature in Growth Plans | bloomberg.com

Cadbury has become the target of intent of Kraft, so Kraft might grow their top line. Cadbury has made itself a confectionary pure play. It divested its beverage business to follow this path. It currently accounts for 10% of the $150 Bn global market and by most analysis, ranks third behind Mars and Nestle. While this would appear to give them the potential for growth, those prospects might not come as easily as anticipated in a very segmented market place.

Why Kraft is Making the Wrong Acquisition

September 17, 2009

Analysis of:Kraft Under Pressure as Bid Value Slips | www.flex-news-food.com

Kraft is attempting to buy a company that essentially is a company deriving the majority of its business in Europe and North America. At the present time Cadbury's sales percentage in emerging markets are; 19% in Asia Pacific, 8% in South America and 7% in Middle East and Africa. It grew its top line by 7% in an industry that is growing at 6%.Now that Kraft has shown its hand, it most likely will pay a premium to essentially buy sales. What can Cadbury bring to Kraft that can be defined as Strategic Growth?

Other IFF Plants Likely to Close

September 16, 2009

Analysis of:International Flavors Mulls Plant Closures | www.flex-news-food.com

Flavor and Fragrance Companies such as IFF, are seeking to justify plant capacity and capabilities based on demand and location. Asia and South America will gain in the process.

Nestle May Have it Right

July 25, 2007

Analysis of:After Buying Binge, Nestle Goes on a Diet | online.wsj.com

Rationalizing will not be an impediment to consolidation. It will in fact accelerate the process. It is more "clearing of the decks" to enhance the integration process. It improves the ability to harmonize two entities that may be bloated. It also will give companies an opportunity to strategically review and correct imbalances they have in product mix. Companies like Nestle have stated their intent to introduce more "good for you" products and acquired companies like PowerBar (Nestle), Balance (Kraft) and Boca (Kraft) yet they have not gained any leverage in the market. Were these really compelling acquistions or good at the time. Would Nestle have been better served by intorducing new products under existing brands like Mars did with their Marathon Bar or focus on new trends like Hershey has done with dark chocolate which Nestle has not to the same degree. A review would expose these weaknesses and offer opportunities for sales and further acquisitions speeding consolidation.

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