Tate & Lyle announces that it has entered into an agreement to acquire the entire issued share capital of CP Kelco U.S.; CP Kelco China; and CP Kelco ApS together with each of their respective subsidiaries (together ‘CP Kelco’), a leading provider of pectin, speciality gums and other nature-based ingredients, from J.M. Huber Corporation for a total implied consideration of US$1.8 billion (approximately £1.4 billion)1, on a cash-free, debt-free basis (the ‘Proposed Transaction’).
Over the last six years, Tate & Lyle has been executing a major strategic transformation to become a growth-focused speciality food and beverage solutions business aligned to attractive structural and growing consumer trends for healthier, tastier and more sustainable food and drink. This transformation has included a much sharper focus on customers and key categories, increased investment in innovation and solution selling capabilities, and the significant strengthening of its Sweetening, Mouthfeel and Fortification platforms through new product development and acquisitions. This transformation was completed with the announcement on 23 May 2024 of the proposed sale of Tate & Lyle’s remaining interest in Primary Products Investments LLC (‘Primient’).
The Proposed Transaction significantly accelerates Tate & Lyle’s strategy to be a leading and differentiated speciality food and beverage solutions business, and to become the solutions partner of choice for customers. It is expected to drive stronger revenue growth and significant adjusted EBITDA margin improvement over the next few years. It is also expected to be accretive to adjusted earnings per share, including cost synergies only, in the second full financial year following completion, and strongly accretive thereafter.
1Based on GBP: USD foreign exchange rate of £1:$1.2723, as at 5pm BST on 19 June 2024.
Butterfly announced the separation of its portfolio company Bolthouse Farms into two standalone entities: Bolthouse Fresh Foods and Generous Brands. Bolthouse Fresh Foods will carry on the century-old legacy of Bolthouse Farms as a leading supplier of fresh carrots to retailers across North America, with nearly 700 million pounds of carrots sold annually. Generous Brands will encompass the market-leading premium fresh beverage and salad dressing businesses of Bolthouse Farms and Evolution Fresh.
Butterfly acquired Bolthouse Farms from Campbell Soup Company in a carveout transaction in 2019. Butterfly has implemented numerous strategic initiatives that have driven topline growth in excess of 30 % while re-establishing the company as a partner of choice to produce departments across North America. Bolthouse Farms also acquired Evolution Fresh from Starbucks in August 2022, uniting two powerhouse beverage brands with complementary product offerings, channel penetration and consumer bases.
This separation is being facilitated by way of separate debt recapitalisations of each business, enabling Bolthouse Fresh Foods and Generous Brands to continue onward as two separate companies with purpose-built strategies and leadership teams. Butterfly expects these transactions to enable accelerated growth via increased flexibility for investment in capabilities as well as acquisitions.
“We’re incredibly excited to announce the separation of Bolthouse Farms into two distinct industry-leading platforms, which will further propel the growth of these businesses and their ability to outperform for customers throughout the world,” said Adam Waglay, Co-Founder and Co-CEO of Butterfly. “This separation was always part of our investment thesis, and we have recruited best-in-class leadership teams which are strategically aligned to each business so that Bolthouse Fresh Foods can focus on delivering high quality, fresh produce with excellent service and Generous Brands can become a strong, consumer-centric business with superior fresh beverage brands.”
Butterfly Operating Partner Jeff Dunn has been promoted from CEO to Executive Chairman of both companies, while two veteran food industry executives were brought in to serve as the respective go-forward CEOs of the companies. Timothy Escamilla, former President of Dole Fresh Vegetables, has been appointed CEO of Bolthouse Fresh Foods, while Steve Cornell, former President of Fresh, Beverages and Desserts at The Kraft Heinz Company, has been appointed CEO of Generous Brands.
“Bolthouse Fresh Foods remains dedicated to nourishing people’s lives by providing high-quality, nutrient-dense products that continue to thrive in today’s dynamic marketplace,” said Timothy Escamilla, CEO of Bolthouse Fresh Foods. Timothy joined Bolthouse Fresh Foods as CEO in May 2023 with 30 years of experience in the produce industry across leading companies such as Dole, Tanimura & Antle, Ready Pac Foods and more.
“Generous Brands is an exciting consumer-centric platform, with iconic and fresh beverage brands,” said Steve Cornell, CEO of Generous Brands. “This transaction will enable Generous Brands to meet the needs of more consumers through more innovation, new investments in our business, and acquiring complementary brands to take our platform to its full potential.” Steve joined Generous Brands as CEO in January 2024, bringing with him over 15 years of experience at Kraft Heinz, having led globally recognised brands such as Heinz, Philadelphia and Capri-Sun, among others.
“This separation is proof that the future of value creation within private equity is grounded in deep operational expertise and transformation through specialisation, and we could not be more appreciative of the amount of work, creativity and collaboration that went into this from all teams,” said Jeff Dunn, Executive Chairman of Bolthouse Fresh Foods and Generous Brands and Operating Partner of Butterfly. “It’s been amazing to watch the two entities develop their own unique cultures during the transition, and we are proud of the robust teams we have built across the companies. By separating, each business is now unleashed to drive its own unique growth strategy to ultimately deliver more fresh, healthy food for more people.”
Brand new innovations set to make their international debut at the leading trade show for the global fresh produce business from 7 to 9 February. 20 startups and the first Spotlights including many world premieres have now been announced.
Innovation is the lifeblood of FRUIT LOGISTICA whose motto this year is “The heartbeat of the Fresh Produce Business”. From 7 to 9 February 2024, the leading trade show for the global fresh produce business returns to Berlin with a brand new lineup of young startup companies, each one ready to enrich the industry with their groundbreaking new ideas.
Under the slogan ’Disrupt Agriculture’, the FRUIT LOGISTICA Startup Day takes place in Hall 5.1 on 9 February 2024. 20 startups will showcase their trailblazing products and solutions. Robots that monitor plant health; labels that automatically change colour with the temperature; AI-based irrigation systems that know how thirsty plants are. Just three examples of how those startups plan to harness new technologies and improve the business.
There are innovations aplenty elsewhere at FRUIT LOGISTICA 2024, and these include several world premieres, many of which are already present on its dedicated Spotlight page. This year’s innovations include packaging and labels with a reduced plastic content that can be easily recycled or are even biodegradable. AI-based technologies are being used in agricultural and sorting machines. New fruit varieties not only appeal to consumers’ tastes; they also make work easier for producers, as they are resistant to common plant diseases, for example.
To learn more about the event’s more than 2,600 exhibitors from 90 countries, as well as its extensive programme which offers expert knowledge on five stages, trade visitors can use FRUIT LOGISTICA Online, the exhibitor and event database.
There are new ways to attend FRUIT LOGISTICA 2024. Trade visitors can upgrade their ticket with a Gold Upgrade and enjoy access to a special lounge and post-show refreshments. And a new Friday Ticket grants access to the final day of the show at a reduced rate. The FRUIT LOGISTICA 2024 ticket shop is now open.
The Eckes-Granini Group concluded the 2022 business year with satisfactory results and is optimistic about the current year 2023. With a + 7.1 % increase in turnover to 917 million euros (2021: 856 million euros), the supplier of fruit juices and fruit beverages achieved 2022 the highest increase in turnover in five years. Volume sales also developed slightly positive compared to the previous year, rising by 3 million to 808 million litres. Eckes-Granini recorded an increase of + 1.3 % in value-based sales at the retail level during the past business year, accompanied by a decline in volume sales (- 2.1 %) compared to the previous year. This resulted in a stable, unchanged market share of 12 % in terms of value, with a slight increase in volume market share of + 0.2 % to 11.3 %. With regard to the largest markets for fruit juices, nectars, and fruit drinks (FJND) in Europe, market shares were gained in France in particular, but also in the Baltic countries, Finland, and Austria.
Eckes-Granini expands market leadership in Europe
Like all companies in the beverage and food industry, Eckes-Granini had to deal with a tense raw materials situation, freight space shortages and supply chain difficulties during the past year. In addition, there was an unprecedented explosion in the cost of raw materials, partly due to poor harvests, as well as packaging materials, energy, and transport. However, these massive cost increases could some of the additional costs through targeted investments in its brands, successful product launches and decisive crisis management. Tim Berger, CEO of the Eckes-Granini Group, comments on the past business year: “Thanks to our rapid and flexible response to the difficult market environment in 2022, we were able to achieve good sales growth and – viewed across the whole business – an increase in market share. We are satisfied with the result in view of the challenging general conditions. We used the challenges of the past year as a catalyst for the optimization and further development of existing processes and structures. For example, we were able to react effectively to raw material shortages and ensure a consistently high delivery capability.”
Weaker economic environment shapes market performance in 2022
In the food retail sector, the FJND market in Europe 2022 showed a positive trend in value sales with + 1.3 % compared to the previous year. Volume sales, on the other hand, declined by – 3.7 %. While the market dynamics in 2021 were still influenced by the Covid 19 pandemic, the Ukraine war and its consequences had a significant impact on market development in 2022. On the one hand, price increases contributed to the rise in value sales. At the same time, however, consumers‘ willingness to purchase declined, with corresponding consequences for volume sales figures.
Innovations and the expansion of new distribution channels as growth drivers
Eckes-Granini benefited in particular from the successful introduction of numerous product innovations in 2022. Overall, the medium-sized family-owned company achieved 30% of its growth through innovations alone, despite reduced marketing investments. One of these innovations are the hohes C Functional Water in the Water Plus category, which were excellently received by the market. Eckes-Granini was also able to expand the market leadership of hohes C Shots in 2022 and successfully establish the Shot concept in additional countries, such as Austria, Hungary, and Spain, in France under the Joker brand and in Denmark, Sweden and Finland under God Morgon. 2022 also marked the most successful Out-of-Home year in the history of Eckes-Granini. The strategically important business segment of hotel, gastronomy and on-the-go consumption made a comeback in many countries, especially in France, where Eckes-Granini grew significantly. Contrary to market dynamics, Eckes-Granini also succeeded in gaining market share in e-commerce and e-retail, doubling its share of sales within three years.
Eckes-Granini remains committed to people and the environment in 2022
Despite all the challenges, a more sustainable business remains a central focus of Eckes-Granini’s corporate strategy. Following an intensive review, the independent Science Based Targets Initiative (SBTi) confirmed in January 2022 that Eckes-Granini‘s greenhouse gas reduction targets are in line with the goals of the Paris Agreement. Eckes-Granini also actively campaigned for the introduction of the juice deposit, made the switch early on and provided extensive information on the advantages of the recycling system in campaigns. In addition, the family- owned company has supported the Team Rynkeby charity cycling initiative for many years as part of its CSR commitment. In 2022, around 10.4 million euros were collected for seriously ill children and their families. Eckes-Granini was also pleased to receive the Top Employer 2023 award in Germany again after 2022.
Positive outlook for the current year
prices and fluctuating availability remain a major issue. In addition, there are uncertainties in consumption regarding the reaction of consumers to inflation. “Overall, the past year with all its challenges has been an opportunity for us to show that we take our responsibility regarding the category, the food retail industry, and our consumers seriously. We succeeded in livin g up to our role as category thought leader. In 2023, we want to build on this and have already made a promising start to the new business year with numerous new beverage concepts and innovations,” says Berger.
About the Eckes-Granini Group: Eckes-Granini is the leading supplier of fruit juices and fruit beverages in Europe. For the ind e- pendent family-owned company headquartered in Nieder-Olm, Germany (Rhineland-Palatinate), the focus is on committed and competent employees, strong brands in the areas of juices, fruit beverages and smoothies, and a long-term strategic orientation with sustainable value creation. Today, Eckes-Granini operates mainly in Europe with its own national companies and strategic partners and generates annual sales of 917 million euros with a total of 1703 employees. The com- pany’s foundation is formed by the internationally renowned premium bran ds granini and Pago to- gether with strong national and regional brands for juices such as hohes C, Joker and God Morgon. Consumers in 80 countries worldwide and especially in Europe know and appreciate our fruit juices and the variety of fruit drinks.
IFF announced it has entered into an agreement to sell its Flavour Specialty Ingredients (FSI) business to Exponent, a leading UK-based private equity firm, for USD 220 million in cash proceeds. FSI reports through IFF’s Scent division and is a leading manufacturer of synthetic and natural base aroma chemicals used in the flavour market. Cash proceeds from the transaction, net of taxes and expenses, will be used to reduce outstanding debt.
“Aligned with our strategy, we’re continuously evaluating our portfolio to identify opportunities to strengthen our financial profile,” said IFF CEO Frank Clyburn. “The sale of FSI will improve our capital structure while allowing us to focus on our core businesses to enhance growth and returns. We appreciate the contributions of our FSI colleagues, who have shared our commitment to quality and customer service. We will work closely with Exponent to have a successful transition and look forward to FSI’s bright future.”
IFF’s FSI is a leading manufacturer of specialty base aromas with a broad range of more than 1,000 aroma chemicals and natural extracts, which provide inputs primarily to the flavour market. FSI includes four dedicated manufacturing and distribution facilities at Teesside and Hartlepool, United Kingdom; Cincinnati, United States; and Pucheng, China, with additional points of distribution in Mexico, Brazil and Hong Kong. With approximately 340 employees, IFF’s FSI business serves more than 970 customers and generated more than USD 100 million in revenue over the last 12 months.
IFF and Exponent expect to close the transaction by the end of Q3 2023, subject to customary closing conditions. Centerview Partners LLC acted as financial advisor to IFF, and Cravath, Swain & Moore LLP provided legal support.
Following the March, 2022 decision to divest from the Russian market, Ball Corporation announced that it has completed the sale of its beverage packaging business in Russia to Arnest Group for USD 530 million. The purchaser, Arnest Group, has acquired all of Ball Corporation’s Russian-based business.
“This decision is the result of many months of consideration, delivering a solution that best secures the future of Ball’s colleagues and assets in Russia. We believe this is a sound outcome for Ball in these geo-political circumstances,” said Dan Fisher, president and CEO Ball Corporation.
Arnest is the largest manufacturer of perfume, cosmetic and household products in aerosol packaging in Russia and Ball’s Aluminum Aerosol division has had the opportunity to work with the world class team at Arnest in the past. The closing of this transaction is not subject to any conditions, and all required approvals have been obtained. The sale is not expected to impact Ball’s businesses outside of Russia.
Tate & Lyle PLC, a leading global provider of food and beverage ingredients and solutions, announces that it has signed an agreement to acquire Quantum Hi-Tech (Guangdong) Biological Co., Ltd (Quantum), a leading prebiotic dietary fibre business in China from ChemPartner Pharmatech Co., Ltd (ChemPartner) for a total consideration of USD 237 million.
Quantum engages in the research, development, production and sale of fructo-oligosaccharides (FOS) and galacto-oligosaccharides (GOS). Together, FOS (from sucrose) and GOS (from milk sugar/lactose) represent around 25 % of the global dietary fibres market which is forecast to grow at around 6 % per annum. In China, which currently represents the majority of Quantum’s sales, the FOS and GOS market is forecast to grow at around 10 % per annum.
The acquisition of Quantum significantly strengthens Tate & Lyle’s position as a leading global player in dietary fibres, bringing a high-quality portfolio of speciality fibres, strong R&D capabilities and proprietary manufacturing processes and technologies. The acquisition expands Tate & Lyle’s ability to provide added-fibre solutions for its customers across a range of categories including dairy, beverages, bakery and nutrition (including infant nutrition), and to meet growing consumer interest in gut health. It also significantly expands Tate & Lyle’s presence in China and Asia, and extends its capabilities to create solutions across food and drink utilising its leading speciality ingredient portfolio.
The transaction is subject to approval by the shareholders of ChemPartner, a public company listed in China, of which Quantum is a wholly-owned subsidiary. At completion, consideration will be paid in cash for 100 % of the equity interests in Quantum. For the 11 months ended 30 November 2021, Quantum generated revenue of USD 46 million and EBITDA of USD 14 million. The acquisition is expected to be accretive to revenue growth and EBITDA margin for Tate & Lyle in the first year of ownership.
Quantum produces its range of FOS and GOS fibres at its production site in Guangdong Province, Southern China. The management team of Quantum will join Tate & Lyle at completion. Closing of the transaction is expected to occur in the second quarter of calendar year 2022.
Royal DSM, a global purpose-led science-based company, reveals its new integrated Food & Beverage operating structure which unifies three areas of DSM’s nutrition business – Food Specialties, Hydrocolloids and part of its Nutritional Products group – to closely align with emerging customer and market needs. The new business group combines the company’s full range of food and beverage ingredients, expertise and science-based solutions that improve the taste and texture of foods, as well as support healthier lives and a healthier planet. The new Food & Beverage organization will focus on helping consumers ‘enjoy it all’ without having to choose between taste, texture and health. This differentiating message will be the cornerstone of a new campaign.
The global food and beverage market is set to continue its upward trajectory as the world’s population grows, placing new pressures on producers in an already competitive space to innovate and get to market quickly. At the same time, the industry is converging with the health and wellness space, and increasingly aligning with consumer expectations for delicious products that support their health alongside environmental and social aspirations. DSM’s strategy aims to support this market advancement through the creation of one Food & Beverage business group that encompasses the ingredients, global and local expertise and solutions provided by its previously distinct Food Specialties, Hydrocolloids and Nutritional Products business areas.
This simplified structure represents the activation of DSM’s announcement in September 2021 that the company will become a fully-focused Health, Nutrition & Bioscience company. By establishing a ‘one-stop-shop’ of ingredients, solutions and end-to-end capabilities, DSM will help food and beverage manufacturers worldwide fast-track product development and achieve efficient production. As a leading provider of vitamins, minerals and other micronutrients, an innovator in enzyme solutions, and a frontrunner in dairy cultures, DSM has unrivalled nutritional science expertise and deep application knowledge which is paired with prominent advocacy for healthier and more sustainable food systems. This is supported by a number of recent acquisitions – including DSM’s acquisition of First Choice Ingredients, a leading supplier of dairy-based savory flavorings – which have enabled DSM to further elevate its taste, texture and health offering for customers. DSM is therefore uniquely placed to help manufacturers overcome the friction that must be navigated to deliver delicious, nutritious and sustainable food and beverage products, so customers and consumers can ‘enjoy it all’.
As an advocate and leader in enabling a healthier and more sustainable food system, DSM’s solutions help boost process efficiencies, reduce food loss and waste and lower the environmental impact of production and consumption – while also enhancing food’s nutritional profile. As part of this, DSM is taking strategic steps in developing specialty proteins that are produced within planetary boundaries, including CanolaPRO®, and supporting producers to be at the forefront of this protein diversification towards a healthier future. DSM’s recent acquisition of Vestkorn Milling, a supplier of pea- and bean-derived proteins, starches and dietary fibers, will also complement and further accelerate this growth. These efforts are part of DSM’s commitment to reach 150 million people with plant-based protein foods by 2030, in alignment with our recently announced series of quantifiable food system commitments.
In the first three quarters of the 2021/22 financial year (the nine months ended 30 November 2021), AGRANA, the fruit, starch and sugar company, generated an operating profit (EBIT) of EUR 76.0 million (Q1-Q3 prior year: EUR 84.3 million). Revenue was EUR 2,169.6 million (Q1-Q3 prior year: EUR 1,965.3 million).
Markus Mühleisen (Photo: AGRANA)
AGRANA Chief Executive Officer Markus Mühleisen says: “Since the beginning of the financial year we have been forecasting that, after a weaker first six months of 2021/22, earnings in the second half of the year would be better than one year earlier. This outlook was confirmed in the third quarter with quarterly EBIT of EUR 31.2 million (Q3 prior year: EUR 28.5 million). Following this positive trend in Q3, we also expect a very significant year-on-year improvement in EBIT in the fourth quarter. We therefore remain optimistic that, for the full financial year, we will exceed the prior year’s EBIT significantly, i.e., by at least 10 %. Getting there has, however, become much more difficult in the past few months amid a very strong rise in raw material and energy prices.”
Results in each business segment
Fruit segment
Fruit segment revenue in the first three quarters grew to EUR 939.1 million, a moderate increase of 5.3 %. The fruit preparations business saw revenue growth stemming mostly from higher sales prices. Revenue in the fruit juice concentrate activities declined slightly for volume reasons. Segment EBIT in the first nine months was EUR 36.2 million, off 12.3 % from one year earlier. The principal reason for the deterioration lay in weaker sales of fruit juice concentrates from the 2020 crop, which were marked by reduced delivery volumes in combination with lower contribution margins of apple juice concentrates in the first half of 2021/22.
Starch segment
Revenue in the Starch segment in the first three quarters of 2021/22 was EUR 737.8 million, or a significant 18.8 % more than a year ago. Higher volumes of core products and by-products were demanded than in the same period of the prior year. In the ethanol business, Platts quotations reached historic highs in the third quarter and averaged 24 % stronger in the first three quarters of 2021/22 than in the prior-year comparable period. Segment EBIT in the first nine months, at EUR 53.5 million, eased by 8.5 % from the year-earlier level. The main reason was a significant year-on-year increase in prices for raw materials (wheat and corn/maize) and energy, which could not yet be fully offset by adjusting product prices.
Sugar segment
The Sugar segment’s revenue in the first three quarters of 2021/22 grew to EUR 492.7 million, up 8.8 % from one year earlier. In addition to renewed high sales volumes with resellers, there was also a recovery in the industrial customer segment, where more sugar was sold than in the same period last year. While the EBIT result in the first three quarters of 2021/22 was better than in the year-ago period, it remained negative at the nine-month mark, at a deficit of EUR 13.7 million. This still reflected the fact that AGRANA’s own sugar production had been below average after the pest-related small 2020 harvest, with a resulting lower margin from the necessary compensatory reselling and refining of sugar.
Outlook
For the full 2021/22 financial year, AGRANA continues to expect significant growth in Group EBIT, in other words, an EBIT increase of at least 10 %. Group revenue is projected to show moderate growth. It should be noted, however, that due to the extreme volatility in commodity and energy prices and a once again more acute COVID-19 situation – the fourth wave in combination with the advent of the new Omicron variant – the forecast for the full year is subject to a very high degree of uncertainty.
In the 2021/22 financial year, the AGRANA Group is investing EUR 92 million, an amount significantly less than the budgeted depreciation of about EUR 120 million.
PepsiCo, Inc. announced that it has entered into an agreement with PAI Partners to sell Tropicana, Naked and other select juice brands across North America, and an irrevocable option to sell certain juice businesses in Europe, which will result in combined pre-tax cash proceeds of approximately $3.3 billion while retaining a 39 % non-controlling interest in a newly formed joint venture. PAI, a leading private equity firm with strong experience in the food and beverage space, will be the majority shareholder of the transferred business, with PepsiCo retaining exclusive U.S. distribution rights to the portfolio of brands in its best-in-class, chilled Direct Store Delivery for small-format and foodservice channels.
“This joint venture with PAI enables us to realise significant upfront value, whilst providing the focus and resources necessary to drive additional long-term growth for these beloved brands,” said PepsiCo Chairman and CEO Ramon Laguarta. “In addition, it will free us to concentrate on our current portfolio of diverse offerings, including growing our portfolio of healthier snacks, zero-calorie beverages, and products like SodaStream which are focused on being better for people and the planet.”
“We are delighted to bring these storied beverage brands into the PAI portfolio through another partnership with a leading global food and beverage company. We believe there is great growth potential to be realised through investments in product innovation, expansion into adjacent categories, and enhanced scale in branded juice drinks and other chilled categories,” said Frédéric Stévenin, a Managing Partner at PAI. “We are also thrilled that PepsiCo will remain involved as our partner in the joint venture as we execute our plans to drive the future success of these brands.”
These juice businesses delivered approximately $3 billion in net revenue in 2020 with operating profit margins that were below PepsiCo’s overall operating margin in 2020. PepsiCo expects to use the proceeds from the sale of these assets primarily to strengthen its balance sheet and to make organic investments in the business. The transaction is expected to close in late 2021 or early 2022, subject to customary conditions, including works council consultations and regulatory approvals.
About PAI Partners PAI Partners is a pre-eminent private equity firm, investing in market-leading companies across the globe. It has significant experience in the food and beverage space and is currently invested in Froneri, the world’s #2 ice cream manufacturer, and Ecotone, a leader in healthy and sustainable food. It manages around €15 billion of dedicated buyout funds and, since 1994, has completed 84 investments in 11 countries, representing over €65 billion in transaction value. PAI has built an outstanding track record through partnering with ambitious management teams where its unique perspective, unrivalled sector experience and long-term vision enable companies to pursue their full potential – and push beyond.
Eckes-Granini Group GmbH can look back on a challenging business year in 2020, which was strongly influenced by the global COVID-19 pandemic. With an EBIT of 71 million EUR and an EBIT margin of 8.7 %, business results fell short of expectations in the past year, but the international corporate group for non-alcoholic fruit beverages nevertheless draws a satisfactory conclusion. Compared to the previous year, the company managed to almost maintain its EBIT margin, which was 8.9 % in 2019. Total turnover fell from EUR 921 million in the 2019 financial year to 873 million EUR in 2020 (-5.2 %), while sales volumes also declined in 2020, falling by 10 million litres to 843 million litres.
Tim Berger (Photo: Eckes-Granini Group)
“The past business year was without a question a challenge for all of us. However, together we have managed to respond to this extraordinary situation with great flexibility and willingness to perform. We have maintained our supply chain and production throughout the year and expanded our market leadership in Europe. The COVID-19 pandemic will continue to affect us in 2021. This year, we will set the strategic internal course for sustainable growth “after Corona”,” says Tim Berger, CEO of the Eckes-Granini Group.
After an initially promising start to the first quarter of 2020, the spread of the COVID-19 pandemic led to a massive setback in the out-of-home business from March onwards. In almost all European countries, restaurants and hotels were completely closed for months due to the Corona restrictions. Accordingly, Eckes-Granini suffered losses of up to 50 % in the out-of-home business in some markets.
Strong food retail partially offsets losses in the out-of-home business
The demand for fruit juices and fruit beverages developed positively in 2020. In contrast to previous years, which saw a declining trend, the FJND (Fruit Juice Nectar Drinks) market developed positively in 2020, both in terms of value (+2.2 %) and volume (+1.5 %). In particular the chilled-juice and ambient-juice segments were able to grow. With a growth of 3.9 %, Eckes-Granini grew almost twice as fast as the market in terms of value and was thus the growth driver in the FJND category again last year. In the food retail segment, the Eckes-Granini Group increased sales by 3 %, driven in particular by higher demand as a result of the ongoing Corona pandemic. Overall, the good results in food retail helped to compensate, at least in part, for the drastic decline in the out-of-home business.
Ongoing health awareness among consumers offers growth potential
The rising demand for fruit juices is also attributable to the continuing strong health trend among consumers. This is reflected in the positive development of the
Eckes-Granini Benefit Ranges, which have won over consumers with their additional health benefits. In Germany, Hungary, Austria and Lithuania, for example, the hohes C PLUS range grew by a total of 10 %, thus outpacing the overall growth of Eckes-Granini brands (+5.9 %) in these markets. The juices in the God Morgon Benefit range also benefited from this trend, with growth of 5 %, as did the shots of the Eckes-Granini brands Rynkeby, Brämhults and Marli.
In solidarity through the pandemic
The difficult situation in the out-of-home market was not the only challenge Eckes- Granini was facing in the pandemic year 2020. Ensuring smooth processes along the supply chain, in production and in operations also demanded a great deal from employees in terms of flexibility and commitment. Nevertheless, in the midst of the global crisis, it was important for the Group not to lose sight of its long-standing business partners and the situation in the communities in which Eckes-Granini operates. In an effort to mitigate the impact of the pandemic, Eckes-Granini supported restaurant owners Germany, Austria and France, among other countries, with donations. Under the umbrella of the Group-wide “Corona Relief Fund”, all eleven national subsidiaries of the Eckes-Granini Group also donated some 500,000 litres of fruit juice to people in systemically important professions and to charitable institutions from April to September 2020. And in the pandemic year, the international charity cycling initiative Team Rynkeby also collected 8.7 million EUR for seriously ill children despite many restrictions with regional country tours. Eckes-Granini has been a main sponsor and partner of the charity cycling race since 2016.
Sustainable management was also a priority in 2020
In the past business year, Eckes-Granini achieved a number of strategic milestones on its way to becoming one of the world’s most sustainable fruit juice producers by establishing an in-house sustainability team. The orange juices of Brazil, granini and God Morgon have carried the Group’s own “Sustainably Grown” label since last year and are produced from 100 % sustainably grown oranges. Through its cooperation with ClimatePartner, Eckes-Granini has also come closer to its goal of successively reducing all greenhouse gas emissions caused directly or indirectly by its own business activities and offsetting them through a compensation project in Portel, Brazil.
Setting the course for future growth
“We have set ourselves a lot of goals for 2025. At the top are innovations strictly oriented to the wishes, expectations and needs of consumers. The current beverage market offers Eckes-Granini numerous growth opportunities, which we will explore. Our goal is to significantly increase our sales revenues and market share in Europe and beyond by 2025″, says Tim Berger, CEO of the Eckes-Granini Group. To this end, the Eckes-Granini Group will continue to develop and expand its strategic brands and existing channels in a targeted manner over the next five years and invest substantially in dynamic growth categories. There will be a clear focus on channels that promise profitable growth, especially e-commerce.”
You can find further information and download the business report at: https://bit.ly/3xK2s2G
About the Eckes-Granini Group: Eckes-Granini is the leading supplier of fruit juices and fruit beverages in Europe. For the independent family-owned company headquartered in Nieder-Olm, Germany (Rhineland-Palatinate), the focus is on committed and competent employees, strong brands in the areas of juices, fruit beverages and smoothies, and a long-term strategic orientation with sustainable value creation. Today, Eckes-Granini operates mainly in Europe with its own national companies and strategic partners and generates annual sales of 873 million euros with a total of 1708 employees. The company’s foundation is formed by the internationally renowned premium brands granini and Pago together with strong national and regional brands for juices and fruit beverages. Consumers in 80 countries worldwide and especially in Europe know and appreciate our fruit juices and the variety of fruit beverages.
Chr. Hansen Holding A/S entered into an agreement to divest its Natural Colors business to the EQT IX Fund for a cash consideration of 800 EUR million on cash and debt free basis. The transaction is expected to close during the spring of 2021, subject to regulatory approvals.
This agreement concludes the strategic review of the Company’s portfolio announced in July 2020, where Chr. Hansen’s Board of Directors and the Executive Board decided to explore strategic options for the Natural Colors business as it does not share the microbial and fermentation technology platforms.
Mauricio Graber, CEO of Chr. Hansen, said: “The divestment of Natural Colors completes the Review part of our recently launched 2025 Strategy. Chr. Hansen can now focus on fulfilling the ambition of becoming a pure-play, microbial and fermentation company with industry leading, profitable growth. I am convinced EQT will be a great owner of the Natural Colors business which has a leading global position in the industry. During the process it has become clear that EQT showed the strongest conviction in the potential of the business, and the highest dedication to the future development of it. I want to thank all the employees of the Natural Colors business for their contribution to Chr. Hansen over many years, and wish them all the best in the future journey as an independent company.”
Mads Ditlevsen, Partner at EQT Partners, and Investment Advisor to EQT IX, commented: “We are immensely proud and humble of having been chosen as the future owner of Natural Colors. It is a high- quality and truly global business with a proud legacy of servicing customers all over the world for more than 100 years. We are highly impressed by the strong ESG profile, the high-quality organization and talented people we have met during this process, as well as the dedicated focus on food safety. Natural Colors fits very well with EQT’s thematic investment criteria and is operating in two of EQT IX’s five prioritized sub- sectors within Industrial Technology. EQT’s ambition is to help the business achieve further growth both organically and through acquisitions.”
Klaus Bjerrum, Executive Vice President of Natural Colors, said: “I am very pleased to announce EQT as the new owner of Chr. Hansen’s Natural Colors business. EQT has acquired our great business (pending closing) to grow it organically and inorganically based on our capabilities and organization, and not least our leading market position. It is my conviction that this marks a new and exciting chapter for us, and I am
excited to embark on this journey with EQT and all our talented employees around the world.”
Financial implications and outlook Chr. Hansen’s long-term financial ambition is unaffected by the divestment. The proceeds from the divestment will reduce the leverage of Chr. Hansen, and will otherwise be utilized according to the capital allocation principles. In the Chr. Hansen Annual Report, which will be released on October 8, the divested business will be presented as discontinued operations. The outlook for organic growth, EBIT before special items and free cash flow before acquisitions and special items for 2020/21, that will also be presented in the annual report, will not include the discontinued operations. Furthermore, the preliminary estimates of impacts of the transaction in 2020/21 will be part of the outlook.
Company to establish new operating units and global beverage category leads, supported by new platform services organization
Workforce to be aligned to focus on growth; reductions expected through voluntary and involuntary separation program
The Coca-Cola Company announced strategic steps to reorganize and better enable the Coca-Cola system to pursue its Beverages for Life strategy, with a portfolio of drinks that are positioned to capture growth in a fast-changing marketplace.
The company is building a networked global organization, combining the power of scale with the deep knowledge required to win locally. The company will create new operating units focused on regional and local execution that will work closely with five marketing category leadership teams that span the globe to rapidly scale ideas.
This structure will be supported by the company’s newly created Platform Services organization, which will provide global services and enhanced expertise across a range of critical capabilities.
“We have been on a multi-year journey to transform our organization,” said Chairman and CEO James Quincey. “The changes in our operating model will shift our marketing to drive more growth and put execution closer to customers and consumers while prioritizing a portfolio of strong brands and a disciplined innovation framework. As we implement these changes, we’re continuing to evolve our organization, which will include significant changes in the structure of our workforce.”
Operating units
The company’s nine new operating units will help streamline the organization by replacing current business units and groups. The operating units will be highly interconnected, with more consistency in structure and a focus on eliminating duplication of resources and scaling new products more quickly.
The company’s current model includes 17 business units that sit under four geographical segments, plus Global Ventures and Bottling Investments. Moving forward, the operational side of the business will consist of nine operating units that will sit under four geographical segments, along with Global Ventures and Bottling Investments.
The company’s operating leaders will report to President and Chief Operating Officer Brian Smith.
Global category leads
Innovation, marketing efficiency and effectiveness are top priorities for the company. The Coca-Cola Company is conducting a portfolio rationalization process that will lead to a tailored collection of global, regional and local brands with the potential for greater growth. To drive these initiatives and support the operating units, the company is reinforcing and deepening its leadership in five global categories with the strongest consumer opportunities:
Coca-Cola
Sparkling Flavors
Hydration, Sports, Coffee and Tea
Nutrition, Juice, Milk and Plant
Emerging Categories
The leaders of these categories will work across the networked organization to build the company’s brand portfolio and win in the marketplace. Global category leads will report to Chief Marketing Officer Manolo Arroyo.
Platform Services
The company announced the creation of Platform Services, an organization that will work in service of operating units, categories and functions to create efficiencies and deliver capabilities at scale across the globe. This will include data management, consumer analytics, digital commerce and social/digital hubs.
Platform Services is designed to improve and scale functional expertise and provide consistent service, including for governance and transactional work. This will eliminate duplication of efforts across the company and is built to work in partnership with bottlers.
Platform Services will be led by Senior Vice President and Chief Information and Integrated Services Officer Barry Simpson.
Aligning the company’s workforce to new priorities
The company’s structural changes will result in the reallocation of some people and resources, which will include voluntary and involuntary reductions in employees. The company is working on this next stage of design and will share more information in the future.
In order to minimize the impact from these structural changes, the company today announced a voluntary separation program that will give employees the option of taking a separation package, if eligible.
The program will provide enhanced benefits and will first be offered to approximately 4,000 employees in the United States, Canada and Puerto Rico who have a most-recent hire date on or before Sept. 1, 2017. A similar program will be offered in many countries internationally. The voluntary program is expected to reduce the number of involuntary separations.
The company’s overall global severance programs are expected to incur expenses ranging from approximately $350 million to $550 million.
As the market for oat drinks grows, Novozymes has developed a new toolbox to guide producers to expand their businesses into oat drinks.
Half a billion people worldwide are either vegan or vegetarian, 26 % of millennials have already embraced this lifestyle and 73 % among them are willing to pay more for sustainable food and drinks1. The combination of these trends is giving the sale of oat drinks a boost, with an expected growth of 30 % a year2.
“A new market is opening up and booming. To help dairies and beverage producers expand their portfolio and create new types of oat drinks, we have developed a toolbox that can help them expand their business into this new territory,” says Alessandro Palumbo, Market Development Manager at Novozymes.
Oat drinks is the fastest growing category in the plant based beverage segment. This is mainly due to the fact that oat drinks have one of the best nutritional profiles among dairy alternatives. Oat drinks is also known for its benefits when it comes to sustainability.
In spite of huge interest and a growing market, a study finds only 2 in 10 consumers think that plant protein is extremely good tasting2.
“The fast-growing demand gives producers the opportunity to develop and market new types of oat drinks. But at the same time, it’s also a challenge to come up with products that match the consumer’s taste and preference,” Alessandro Palumbo says.
Speed up development and help match consumer’s taste and preference
The new enzymatic toolbox is developed by Novozymes and is the first of its kind. It provides insights into how to use and combine enzymes, raw material and production parameters to adjust sweetness, mouthfeel and nutritional profile in oat drinks. It also provides insights for producers into how to optimize the production process and save costs.
“The toolbox gives dairy and beverage producers the opportunity to develop the oat drinks consumers want. By teaming up with Novozymes, they will be able to select the flavor and nutritional profile of their drink, starting from a prototype and quickly scale it up using the perfect combination of enzymes, raw materials and equipment,” says Alessandro Palumbo.
“This will help them to speed up the go-to-market process while reducing their risks related to new product development”.
By working with Novozymes, producers will also have access to a team of experts, who can provide 360° technical support from raw material to finished product. The toolbox can be accessed from here.
1Vegans, millennials and willingness to pay a premium 2Findings from Quid platform on healthy eating and a Novozymes’ plant protein consumer research conducted in the USA in December 2018 with an online panel of 1,000 respondents, carried out by Natural Marketing Institute (NMI).
DDW, The Color House, is pleased to announce that on June 28, 2019 it completed a transaction to acquire the DuPont Natural Colors business which was part of DuPont’s Nutrition & Biosciences division. The acquisition expands DDW’s global reach and adds technical and manufacturing capabilities in several core natural colors.
DDW adds two DuPont manufacturing facilities (Burton-on-Trent, UK and Santiago, Chile) and all related customer contracts. The expanded business will operate under the “DDW, The Color House” brand. DuPont originally acquired the business in 2017 as part of their acquisition of FMC’s Health & Nutrition business.
“This is the perfect opportunity to expand our portfolio with unique new products and deepen our position in blending and emulsions. The associates at both sites are very experienced and will ensure that we can continue to provide outstanding products and services during the transition,” explains Ted Nixon, CEO of DDW.
The Tetra Laval Group Board has appointed Ms Monica Gimre, President & CEO of Sidel Group effective July 1, 2019. The appointment follows the decision by Mr Sam Strömerstén to retire from his position after more than three years as President & CEO and 36 years with the Tetra Laval Group.
Monica Gimre is presently Executive Vice President Processing Solutions & Equipment in Tetra Pak. Prior to her present position she has had several managerial positions in the Group, including Vice President Marketing and Portfolio Management and Vice President Technical Sales and Service for Tetra Pak’s Processing business. She joined the Tetra Pak Global Leadership Team in 2016. Ms Gimre, who is 58 years old has a Master of Science in Chemical Engineering, Lund University, Sweden.
