Food Business News - Oct 25, 2005 - (Page 1)

FoodBusinessNews October 25, 2005 NEWS, MARKETS AND ANALYSIS FOR THE FOOD PROCESSING INDUSTRY Jones Soda to enter confectionery market 18 Value-added products drive meat and poultry sales 26 Putting packaging in perspective SEATTLE - Jones Soda Co. signed an exclusive licensing agreement with Big Sky Brands, Inc. to create Jones Soda Flavor Boosters candy. A leader in the premium soda category, Jones Soda is known for its labeling technique that incorporates alwayschanging photos sent in from its consumers. The launch of Jones Soda Flavor Boosters will give Jones the opportunity to take that technique to the candy aisle for the first time. Jones Soda Flavor Boosters will debut in 25-gram metal tins with three Jones Soda flavors: Green Apple, Fufu Berry, and Berry Lemonade. Just like Jones Soda, under each lid Jones will feature quotes sent in by consumers. Jones Soda Flavor Boosters will be available in select alternative, convenience and grocery locations across the country in early 2006. A spokesperson for Jones Soda said the new flavor boosters are a small, rounded candy that fizzes when placed in the mouth. In addition to eating the candy as a standalone product, consumers may make any drink a "Jones" by simply adding the flavor Continued on Page 10 30 MARKET WATCH hurricane-reduced 2004-05 crop. Kraft cuts earnings guidance after net income drops in quarter NORTHFIELD, ILL. - Kraft Foods Inc. changed its full-year 2005 guidance to $1.68 to $1.71 per share from $1.73 to $1.78 per share after net income for the third quarter ended Sept. 30 fell 11% when compared with the previous year's third quarter. Kraft reported net income of $674 million, equal to 40c per share on the common stock, for the third quarter, which compared with $779 million, or 46c a share, in last year's quarter. Commodity costs that were higher than expected led to the reduction in earnings guidance. "Our overall top-line momentum accelerated in the third quarter behind new products, positive mix and strong developing market growth," said Roger K. Deromedi, chief executive officer. "From a profit perspective, however, our price increases lagged the rise in commodity and energy costs, and our margins declined." Commodity costs in this year's third quarter were about $200 million higher than in last year's third quarter. Costs for coffee, nuts, energy and packaging all were higher. An expected decline in dairy costs when compared with last year's costs did Continued on Page 21

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Food Business News - Oct 25, 2005