Food Business News - May 30, 2006 - (Page 1)

FoodBusinessNews ® NEWS, MARKETS AND ANALYSIS FOR THE FOOD PROCESSING INDUSTRY May 30, 2006 Fearless in the face of Wal-Mart Whole Foods confident despite the retail giant's foray into organics Texas schools go healthy 8 Beverages with benefits 22 Tyson Foods names Richard Bond president, c.e.o. 55 MARKET WATCH Grower prices were up 84% and retail up 12% from a year ago. In spite of the solid quarterly financial results achieved at Whole Foods Market Inc., including sales and earnings gains of about 20%, financial analysts querying management in the company's May 3 conference call appeared fixated on what they worried could be a dark cloud hovering on the horizon - Wal-Mart Stores Inc. Not only in the most recent quarter but for several years, Whole Foods has achieved dazzling growth with remarkable consistency. From modest beginnings with a small store in Austin, Texas (where it is still headquartered), the company has become the world's largest retailer of natural and organic foods. With 184 stores in North America and the United Kingdom, the company had net profits of $136 million and sales of $4,701 million in fiscal 2005 (ended Sept. 25). Its stock market capitalization of $9.2 billion dwarfs the $495 million market capitalization of its Continued on Page 28 Food industry mergers and acquisitions decline for fifth straight year ELMWOOD PARK, N.J. - For the fifth consecutive year, the number of mergers and acquisitions in the food industry dropped, falling to 323 in 2005, according to "Food Business Mergers & Acquisitions 2005," the annual listing of the mergers and acquisitions shaping the food industry from The Food Institute. An additional 75 transactions were announced, but not completed by the end of the year. At 323, activity was down 8% from 2004 when 351 mergers and acquisitions were completed and was off 49% from the 637 transactions recorded in 2000, The Food Institute said. "Activity may have declined compared to previous years, but there were a number of significant transactions in several categories," said Danielle Breuel, research and education director at the Elmwood Park, N.J.based trade group, which has been tracking food industry merger and acquisition activity for more than 25 years. "Examination of certain deals in the confectioners, restaurants, retailers, food processors and food service distributors categories illustrates the use of acquisitions to not only strengthen a company's current operations, but also to mark their entrance into new areas of business. Meanwhile, divestitures enabled certain firms to exit underperforming areas." "Food Business Mergers & Acquisitions 2005" contains a listing of merger and acquisition activity in more than 25 different Continued on Page 14

Table of Contents for the Digital Edition of Food Business News - May 30, 2006


Food Business News - May 30, 2006