Food Business News - Aug 08, 2006 - (Page 1)

FoodBusinessNews ® August 8, 2006 NEWS, MARKETS AND ANALYSIS FOR THE FOOD PROCESSING INDUSTRY Premium entrees driving frozen foods 12 Assessing food defense vulnerabilities 28 Finding the next 'fab' flavors 39 Smithfield to acquire ConAgra Foods branded meats business SMITHFIELD, VA. - Smithfield Foods, Inc. has signed an agreement to acquire the branded meats business of ConAgra Foods, Inc., Omaha, for $575 million. Under the terms of the agreement, ConAgra will receive $475 million in cash and $100 million in Smithfield stock for most of the assets associated with the brands, including plants and inventory. The brands sold include Armour, Butterball, Eckrich, Margherita, Longmont and LunchMakers. Their combined annual sales are approximately $1.8 billion. "This acquisition furthers our strategy of growing the packaged meats side of our business," said C. Larry Pope, president and chief operating officer of Smithfield Foods. "In addition, this continues our previously announced strategy of utilizing our raw materials internally as opposed to selling them in the commodity market." Smithfield intends to separate the Butterball business from the non-turkey packaged meats business and Continued on Page 10 MARKET WATCH Chicago loose lard prices in cents per lb 28.00 Aug. 4, 2006 June 2, 2006 Aug. 5, 2005 380,360 Freezing 16.00 17.50 Price soars 75% on fall baking, biodiesel demand. Getting better with age Older Americans living longer, spending more on food and beverages It is well documented that children have been one of the most important focuses for the government and many food and beverage companies during the past year. Whether it is a push to use animated characters solely to promote products that support healthy diets or improving the nutrition selection of foods and beverages sold in vending machines, efforts have been taken to capitalize on an extremely impressionable consumer group. While it's hard to argue the need to focus on this group, another, more mature, segment offers nearly as many opportunities. The U.S. population aged 65 and over is making its mark, living longer than their predecessors, staying healthier longer, achieving higher levels of education and paying more attention to the foods and beverages they consume. According to "65+ in the United States: 2005," report issued in March from the U.S. Census Bureau and commissioned by the National Institute on Aging (N.I.A.), the U.S. population aged 65 and Continued on Page 32

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Food Business News - Aug 08, 2006