Food Business News - Feb 20, 2007 - (Page 1)

FoodBusinessNews ® NEWS, MARKETS AND ANALYSIS FOR THE FOOD PROCESSING INDUSTRY Deromedi to lead Pinnacle Foods February 20, 2007 Hershey streamlining operations to improve margins 11 PepsiCo earnings climb 40% 18 Omega-3 resonates with consumers 28 MARKET WATCH HERSHEY, PA. - The Hershey Co. unveiled a comprehensive, three-year supply chain transformation program it said will enhance the company's manufacturing, sourcing and customer service capabilities. In addition, the program, which will be implemented in stages, will generate significant resources to invest in the company's growth initiatives, including accelerated marketplace momentum within core U.S. business, creation of new product platforms to meet consumer and customer needs, and disciplined global expansion. As part of the program, Hershey said it will undergo several actions, including increasing manufacturing capacity utilization by reducing the number of production lines it operates by more than one-third; outsourcing production of low value-added items; and, constructing a flexible production facility in Monterrey, Mexico, to meet current and emerging marketplace needs. Hershey also said the program will result in a total net reduction of approximately 1,500 positions, or about 11.5% of its total work force, over the next three years. When completed, manufacturing of approximately 80% of the company's production volume will take place in the United States and Canada, Hershey said. In addition, finished products will be sourced from fewer facilities and increased access to borderless sourcing will further leverage the company's Continued on Page 14 Lenny Fall potato stocks on Feb. 1 187,800 203,490 189,100 200,230 199,020 192,090 234,260 207,150 212,562 209,640 1,000 cwts '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 Source: U.S. Department of Agriculture Feb. 1 potato stocks were at the lowest level in the past decade. Searching for new growth avenues Lycopene, fiber may give sauces a healthy edge Global sales of sauces have made headway, but not headlines, in the food world recently. Sales of sauces and condiments in North America grew 2% from mid2005 to mid-2006, which was a little less than the 3% global growth, according to the ACNielsen Global Services report "What's Hot around the Globe: Insights on Growth in Food & Beverage Products." Sauce formulators are searching for ways to ignite sales growth. For instance, they are adding nutritious elements, such as fiber, to sauces. "They are now looking beyond lower fat and lower calories," said Donna Pechillo, a food scientist for FMC BioPolymer, Philadelphia. "They want the total package. They also want something good for you." Sauces also may play a role in the convenience trend, provided the sauces maintain their integrity, taste and texture in frozen and microwavable foods. The health angle has benefited pasta sauces in several ways, according to the Nov. 6, 2006, issue of "Facts, Figures, & the Future," a newsletter written by Phil Lempert and published in collaboration Continued on Page 33

Table of Contents for the Digital Edition of Food Business News - Feb 20, 2007


Food Business News - Feb 20, 2007