Newsletter: February 2008
March 13, 2008
Turkish company purchases Godiva
The Campbell Soup Co. will sell its Godiva brand to
Turkey-based Yildiz for $850 million. Yildiz is the parent company of
confectionery and snack firm Ulker, and Godiva will join its range of
confectionery products once regulatory approvals are made. Ulker, which recently
earned a 57% share of the Turkish chocolate market, sees the Godiva
acquisition as a prime opportunity to establish itself as a premium chocolate
presence not only throughout Turkey, but also the world. Campbell first
announced plans to sell the luxury chocolate brand in August, stating that the
chocolates do not fit in with its renewed focus on soup-based snacks, ready-made
meals and vegetable drinks.
Financial firms purchase Necco
American Capital Strategies Ltd. and Clear Creek Capital LLC
partnered with Domenic M. Antonellis, president and ceo of New England
Confectionery Co., to purchase the candy company from UIS Inc. The deal with
Necco, which is the oldest multi-line confectionery company in the U.S., was
made for an undisclosed amount. The deal includes Necco’s 820,000-sq.-ft.
headquarters and production facility in Revere, Mass. American Capital
Strategies purchased the facility for $15 million, backed by a $35.5-million
mortgage, according to financial press reports.
Cadbury Schweppes sells Monkhill to Tangerine
Cadbury Schweppes PLC sold its sugar confectionery and popcorn
business, Monkhill to Blackpool, England-based Tangerine Confectionery Ltd. The
deal, worth approximately $113 million in cash, follows Cadbury’s recent
initiative to disconnect with its non-core brands and businesses. Monkhill’s
2007 revenue is expected to reach approximately $148 million, and last year’s
pro forma earnings before interest, taxation, depreciation and amortization is
targeted at approximately $13 million.
Barry Callebaut closes Morinaga deal...
Zurich-based Barry Callebaut recently announced the closing of
its transaction with Japanese food company, Morinaga. The deal includes the
acquisition of cocoa and chocolate production equipment at Morinaga’s Amagasaki,
Japan, site. Barry Callebaut hopes to upgrade the production lines to generate a
total production capacity of 20,000 tons a year. The companies also partnered
for a 10-year supply agreement for 9,000 metric tones annually, which doubles
Barry Callebaut’s Japanese sales volumes. Liquid chocolate deliveries are
expected to commence within the next year.
...and inaugurates its new facility in China.
Barry Callebaut opened its brand new chocolate factory and its
8th Chocolate Academy in Suzhou, China, last month. The factory boasts a total
production capacity of 25,000 metric tons per year and was built in the record
time of only one year. The cutting-edge facility will allow Barry Callebaut to
increase its customer base in China and the rest of Asia-Pacific. The company
has held a presence in Asia-Pacific since 1997 with the establishment of its
Companies faced with price fixing allegations
Some of the world’s largest chocolate companies, including Mars,
Hershey and Nestlé, are facing price fixing lawsuits in the U.S. The allegations
began in November 2007, when the Canadian Competition Bureau asked the companies
to surrender pricing strategy documents. While the documents contained no proof
of any wrongdoing, three lawsuits were filed last month-one in New Jersey and
two in Pennsylvania. Last summer, cocoa prices reached their highest levels
since 2003, and the lawsuits will undoubtedly increase pressure on the
companies, which are already dealing with higher material costs. Additionally,
the International Cocoa Organization recently reported that the cocoa deficit is
greater than previously thought-242,000 tons compared to earlier projections of
156,000 tons-due to poor weather conditions in Africa and South America.
Kumar retires from Wrigley
Surinder Kumar, Wrigley’s chief innovation officer (cio) will
retire from the company effective July 1, 2008. Kumar joined Wrigley in 2000 as
its first-ever cio. Kumar will be succeeded by Rob Peterson, currently Wrigley’s
v.p.-new products and packaging. Peterson, who has worked with Wrigley’s
Innovation Team since 2006, will immediately assume the position of
v.p.-innovation. Over the next six months, Peterson will work closely with Kumar
to ensure a smooth transition of duties. Peterson will become cio upon Kumar’s
Cadbury's production move sparks environmental concerns
Cadbury confirmed plans to transfer some UK production to Poland,
which has led to protests and accusations over food miles (a phrase referring to
the proximity of place of manufacture to the place of sale). Considered one of
the initial cases of union groups using environmental issues as a case against
the diminished UK facilities, organizers claimed the products produced in Poland
would have to be transported back to the UK. However, Cadbury notes that there
will be an overall reduction of emissions through the closing of its UK
facility. Cadbury is not building any new plants in Poland, but rather working
in conjunction with established companies in the region.
Lead levels recall Mexican candy
San Antonio-based Villa-Mex Imports is voluntarily recalling
Miguelito Azucar Salada Enchilada Acidulada, a candy found to have contained
elevated levels of lead. The candy is a reddish powder in a cellophane packet
and is the third candy imported from Mexico by the company to be voluntarily
recalled. Villa-Mex also earlier recalled Barrilito and Tarritos candies.
Interbrand secures Wrigley account
Interbrand Corp.’s division in Cincinnati will take over design
and packaging initiatives for Chicago-based Wrigley Co. This is not the first
business venture between the companies-both have worked together for about two
years. No financial details were disclosed, though Interbrand did say that
Wrigley would be among the company’s Top 10 accounts. Additionally, the company
expects the Wrigley account to bring in new jobs at its local division, which
currently employs approximately 100 in Cincinnati. Ronny Kastner, executive
director of the Cincinnati account management team, will be Wrigley’s global
relationship manager for the project.
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