Food Business News - Oct 17, 2006 - (Page 1)

FoodBusinessNews ® October 17, 2006 NEWS, MARKETS AND ANALYSIS FOR THE FOOD PROCESSING INDUSTRY Strong PepsiCo earnings growth prompts guidance hike Canola oil earns health claim 14 Bill Clinton brokers school snack pact 18 Unilever transitions to vitality 38 MARKET WATCH PURCHASE, N.Y. - Driven by broad sales and volume gains, third-quarter earnings at PepsiCo, Inc. grew at a double-digit rate in the period ended Sept. 9. Earnings guidance for 2006 was raised by the company. Net income in the third quarter was $1,481 million, equal to 88c per share on the common stock, up 71% from $864 million, or 51c per share, during the third quarter last year. Excluding a special 27c tax charge during the third quarter last year, earnings were up 12%. Net sales in the third quarter were $8,950 million, up 9% from $8,184 million during the third quarter last year. "We are pleased with our performance for the quarter, especially as we are cycling strong performance from the third quarter of 2005 - when revenue was up 13% and division operating profit increased 14%," said Indra Nooyi, PepsiCo chief executive Continued on Page 10 Overall volume growth at PepsiCo of 4% was driven by a 13% increase in non-carbonated beverages. Florida orange production in million 90-lb boxes 2006-07 135.0237.8 2005-06 303.8 147.9 2004-05 280.3 149.8 Source: U.S. Department of Agriculture Florida orange crop is forecast smallest since 1989-90. V is for variety Vegetarian market offers food alternatives for a range of consumers Health, compassion for animals and concern for the environment stand out as three reasons why consumers might opt for a vegetarian lifestyle, which encompasses a diet that does not include meat, fish or fowl. And while the number of vegetarians in the marketplace has grown only marginally in recent years, manufacturers of vegetarian foods have con- tinued to develop wide ranging product lines hoping to capture not only the die-hard vegetarian consumer, but also the experimental vegetarian, as well as the experimental eater, that individual who may buy a veggie burger simply for a change of taste. "The vegetarian market is stronger than ever and continually expanding," said Jo Stepaniak, author of several books on vegetarian- and vegan-related issues. Ms. Stepaniak also runs Grass Roots Veganism (, a web site that focuses on the vegan lifestyle. "Fortunately, during the past few years, manufacturers have heeded many of the needs of this vibrant consumer group and supplied a vast number of healthful and delicious vegetarian products," Ms. Stepaniak said. "The demand for these products Continued on Page 34

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Food Business News - Oct 17, 2006