CINCINNATI, OH & MILWAUKEE, WI - Kroger is cracking into yet another new market as the company continues to widen its footprint in the retail sector. This time, however, the chain has acquired the established Roundy’s banner rather than putting new stores in the state of Wisconsin.
In a one-on-one interview with CNBC, Rodney McMullen, Kroger's Chairman and Chief Executive Officer, McMullen addressed the decision to buy into the market and build from there with the viewpoint that Roundy’s is already established in the market share.
“Part of our strategy in going to a new market is fill in, we think this is a much more efficient way to go into a new market and [Roundy’s] really has a great market share already.”
Today’s TMJ4 reported that though Kroger is acquiring Roundy’s for about $178 million, it valued the deal at around $800 million, including debt. Kroger stated in the release that it will pay approximately 65 percent premium over its closing price for each share.
McMullen said in a press release that he was delighted to welcome Roundy's to the Kroger family. "With a team of 22,000 talented associates, outstanding store locations, and a shared commitment to putting customers first, we are excited about Roundy's future growth."
With this latest addition, Kroger inherits 151 stores and 101 pharmacies in new regions, including Milwaukee, Madison, Northern Wisconsin, under the Pick 'n Save, Copps, and Metro Market banners, plus two Wisconsin-based distribution centers.
Kroger also stated that this transaction will add an innovative store format in the Chicago area, where Roundy's operates 34 stores under the Mariano's banner. Roundy's had revenues of nearly $4.0 billion for fiscal year 2014.
McMullen said that Kroger admires what President and CEO Robert A. Mariano has done with the Mariano’s banner in Chicago, and that together with Kroger’s scale and strong financial position they will be able to both reinvest in Roundy’s Wisconsin home and Chicago.
“[Mariano] has created an urban format that is resonating with customers and we expect to apply Roundy's experience to our stores in urban areas around the country,” McMullen said, adding that any merger Kroger goes into involves both parties bringing something to the table.
The feeling appears to be a mutual one.
"We are excited about becoming part of The Kroger Co.,” Mariano said, explaining that Kroger's scale, knowledge, and experience will make Roundy’s a more formidable competitor in the marketplace by allowing it to accelerate the strategic initiatives it has invested in previously. “This is a great win for our customers, communities, employees and our shareholders, and I personally look forward to continue to exceed customer and employee expectations.”
The Boards of Directors of both companies agreed unanimously to the terms, stating that the transaction is expected to close before the end of 2015's calendar year.
CHILE - Chilean citrus saw powerful export North American numbers for 2015, with strong retail and consumer demand contributing to a record season for the country.
“We’ve had an incredible season in North America,” Juan Enrique Ortúzar, Chairman of the Chilean Citrus Committee, stated in a press release, adding that, despite strong competing supplies from South Africa, Australia, Uruguay, and Peru, Chilean citrus obtained double digit volume increases and strong market conditions across all commodities.
According to the committee, mandarins in particular saw a 54% jump, from 27,354 tons to 42,124 tons, in North America, which Managing Director for the Chilean Fresh Fruit Association Karen Brux attributed to an important shift within the citrus industry.
“With the significant investment that’s been made in the marketing of mandarins, in particular, there is now strong year-round demand for easy peelers,” Brux, who directed Chilean Citrus’ promotion campaign, said. “Despite the more than 50% increase in mandarin volume out of Chile, we still had to cancel some promotions due to tight supply. This clearly demonstrates continued growth opportunities for Chilean citrus in North America.”
On a global scale, Chilean citrus export figures showed easy peelers at 37%, oranges 33%, and lemons 30%.
Several categories saw a jump overall, with increases as follows:
- Late Mandarins - 57%
- Lemons - 43%
- Oranges - 18%
- Clementines - 11%
As for what’s next, Ortúzar added that more growth is to come.
“We foresee 20% annual growth in combined volume of clementines and mandarins for at least the next three years, so total volume will exceed 100,000 tons in the short term,” he said, adding that new citrus varieties continue to be evaluated as the Chilean citrus industry seeks to drive the category forward.
While total citrus exports from Chile saw a 30% increase over last season, shipping upwards of 204,000 tons total of navels, lemons, and easy peelers like clementines and mandarins, North America remains Chilean citrus’ primary destination, taking 81% of export volume between May and October, 2015.
BELLINGHAM, WA – Haggen may have already put dozens of stores up for auction this week, but more may soon be on the way.
The company is now moving to sell all 32 of its most valuable, or “core,” stores, including at least 16 of its original locations. These were the so-called profitable stores that Haggen announced it would reorganize around, citing strong brand reputation in their respective areas.
A court document requesting a hearing to seek approval of this latest sale reads as follows: “As part of the Debtors’ overall sale strategy, the Debtors have decided, in their business judgment, to sell all of substantially all of the Assets – which collectively represent the Debtors’ most valuable store locations – in order to further maximize recoveries to the Debtors’ estates, their creditors, and all parties in interest.”
A hearing is to be scheduled on December 4th, with the auction to be held on January 8th.
As we previously reported, it was announced that Haggen would sell 28 California and Nevada stores to Smart & Final LLC and 8 California stores to Gelson’s Markets in a separate agreement.
No further announcements have been made in regards to the auction proceedings currently happening this week.
Below is a list of the “core” stores that Haggen would put up for auction early next year:
Stay tuned to AndNowUKnow as we continue to follow Haggen’s auctions in the days ahead.
NEWARK, DE - Thank you for all the memories, Meg! We hate to say farewell, but wish you the best. Meg Miller, Director of Public Relations for PMA has decided to make the leap to Campbell Soup Company’s Corporate Communications team. Meg has been with PMA since 2010, and traversed the ranks during her 5-year tenure, starting with the association as Public Relations Manager and soon after promoted to Director.
Meg’s last day will be November 27, and Kathy Means, VP of Industry Relations, is ready at the helm to assume Meg’s responsibilities.
“Meg has been a great asset to PMA and its members and we’re sorry to lose her to Campbells, though delighted that she’s staying 'within the family,'” said Bryan Silbermann, CEO. “During her time at PMA she’s brought great energy and professionalism to our PR team. We all wish her the very best in her new role.”
Meg has had the great opportunity to contribute to eat brighter! and other programs designed to create demand for produce. She was also glad to support PMA's Issues Leadership strategy which focuses on key areas like global trade, food safety, crisis management and nutrition.
“I’m thrilled to be joining Campbell’s team and to continue on a career path that aligns with the food industry I’m so passionate about. I’m incredibly grateful for the opportunities and experiences I’ve had over the last few years," Meg tells me. "The people are what make the produce and floral industry such a great place to work, and it will always have a place in my heart.”
Please join me in wishing Meg all the luck in the world on her move to Campbell!
Thank you Meg, for all the great conversations, events, and projects we've had together! From your friends at AndNowUKnow.
ORLANDO, FL - US Foods has announced its Q3 2015 financial results, noting that the company is finally getting back on track after its failed merger attempt with rival Sysco.
As we’ve previously reported, this past June, Sysco pulled out of its nearly two-year long negations for the proposed $8 billion merger, citing the Federal Trade Commission’s antitrust concerns as the main concern.
After a few months of restrategizing, it seems that the company’s declining sales following the failed merger are finally beginning to level out. While US Foods reported a 1.9 percent decrease in net sales to $5.79 billion, the company also reported net income of $36 million for the third quarter, an increase of $73 million from the same period a year ago.
According to the Chicago Tribune, US Foods CEO Pietro Satriano said in a conference call with investors that under the company's new three-year plan, it will be focused on reducing costs and differentiating food, particularly within the independent restaurant segment.
Both Satriano and Khan interpreted the company’s Q3 results as a step in the right direction for US Foods following the failed merger. "With the merger uncertainty lifted, customers are coming back into the fold, and we are building momentum," CFO Fareed Khan added during the investor call.
Other highlights from US Foods’ Q3 2015 financial report include:
- Adjusted EBITDA, as a percentage of Net sales, was 3.6% in 2015 and 2014.
- Operating income, as a percentage of Net sales, was 0.7% in 2015 compared to 0.8% in 2014.
- Fiscal 2015 Operating income included $91 million of acquisition-related costs, $82 million of employee separation costs for facility closures and implementation of the new field organizational model, $16 million in legal settlement costs and $9 million of brand re-launch and marketing costs.
Just last month, we reported on US Foods’ announcement that its parent company, USF Holding, would file for an initial public offering within the next 12 to 18 months. Stay tuned to AndNowUKnow as we continue to follow this story and more industry financial news.
ATLANTA, GA - Miss America 2016 Betty Cantrell is hard to miss, even amongst more than a thousand produce companies and booths.
The beauty queen has teamed up with Shuman Produce over the common goal of promoting more produce consumption in the U.S.’s younger generation, and took the time to tell us how it is to work with the sweet onion grower.
“Working with Shuman Produce is amazing,” Cantrell said enthusiastically. Before winning her national title, she was Miss Georgia and grew up eating the Vidalia onions Shuman is known for growing.
Cantrell’s main initiative in her duties as Miss America is promoting healthy eating and lifestyles for children through her platform Healthy Children, 'Strong America,' something she says coincides well with Shuman and its work with several initiatives that support health for youth.
“Shuman Produce does a great job of promoting the same sort of message with Produce for Kids, and they’ve raised over $5 million for Children’s Miracle Network Hospitals and charities such as that,” she said, adding that she is happy to promote the company’s message.
To see our full interview with Cantrell about her passion for the health of the next generation, and the role Vidalia onions play in that goal, watch the 45 second video above.
CORAL GABLES, FL - It is a growing trend. Consumers have come to expect healthy, tasty, on-the-go products that will satisfy their snacking needs as our lives continue to get busier and more eventful. Lucky for this industry, we deal in the healthiest stuff on earth. Responding to these growing demands is Del Monte Fresh Produce, who is continuing to make strides to get more fruits and vegetables into the consumer's hands.
Dionysios Christou, Vice President of Marketing, took a moment to tell me about the company’s growth and evolution in fresh-cut produce.
“Our fresh-cut program has been perfectly aligned with this trend, as we continue to expand our fresh-cut range to meet the needs of this growing and demanding consumer segment,” Dionysios tells me. “When it comes to fresh-cut fruits and vegetables, Del Monte Fresh is continuously developing innovative packaging with the on-the-go consumer in mind, such as non-spill containers and cups that fit in car cup holders.”
The need for innovative packaging that is portable, and at the same time keeps the freshness and integrity of the product, has become an integral part of making fresh-cut, healthy products successful, he adds.
So where does Dionysios see the trends evolving for fresh-cut? He tells me that Del Monte has seen an increasingly high demand for nutritious, portable snacks across all channels; and in particular with convenience stores and gas stations. Also on that list are vending opportunities and drug stores.
“Customers are looking for healthy, tasty, on-the-go, fresh products. Fresh-cut fruit and vegetables have become the perfect solution to satisfying those needs,” Dionysios says. “Sales and consumption of fresh-cut produce has increased, especially with the increased presence of fresh fruit across a number of new channels. The fresh-cut category is also very popular for tailgating events. They are an easy way to display healthy snacks and allow for a quick cleanup!”
“Channels that have been typically reluctant to sell perishable fresh products in the past, have begun working with Del Monte and other suppliers to offer their customers healthier, fresh products to go,” said Dionysios.
Del Monte Fresh has had great success making fresh fruit and vegetables more convenient and available. The nationwide focus on health and wellness has lead consumers to demand and expect healthier options wherever they shop or dine.
“Channels that have been typically reluctant to sell perishable fresh products in the past, have begun working with Del Monte and other suppliers to offer their customers healthier, fresh products to go,” he adds. “We believe the fresh-cut lines will continue to lean towards the fresh, convenient, and on-the-go trends, as the need and want for healthier lifestyles continues to surge. In line with these trends, manufacturers will continue to develop a better and more diverse variety of fresh snacks.”
The recent growth of fresh-cut fruits and vegetables has helped place produce in unexpected channels so consumers don’t have to sacrifice their healthy lifestyles when on the go.
“Our fresh-cut fruit and vegetable grab-and-go line continues to grow and evolve from new packaging, that helps extend the shelf life and keep the product the highest quality possible, to new cuts and fruits to accommodate shifting consumption and quality patterns,” Dionysios says as he looks to the future.
Del Monte has no plans for slowing its fresh-cut push, and with the demand ever-growing, there can only be “healthy” results on the horizon.
IDAHO FALLS, ID – Potandon Produce is issuing a challenge to the produce and floral industries: Raise $50,000 by Arbor Day 2016 to support the planting of trees affected by the wildfires that have burned millions of acres across Idaho, Montana, Washington, California, and Oregon.
As one of the worst years on record for wildfire destruction, Potandon’s goal is to restore the barren land back into its natural state as quickly as possible. They need your help to make it happen.
Why, do you ask? Planting these trees will go a long way in helping the wildlife populations, limiting soil erosion, and generating oxygen.
Each dollar pledged will go towards the planting of one tree. Click on the button below to find a page where you can contribute to this worthwhile cause.
“Being an Idaho-based company, the staff at Potandon Produce LLC see the impact of these fires firsthand, with smoke filling our air and local news reports of properties being burned, businesses destroyed, and people displaced,” the company said in an email to industry members. “Everyone working in the Produce and Floral Industries understands the importance of a healthy eco-system and how critical it is to quickly recover from this type of devastation.”
Industry members, like Rex Lawrence, President of Joe Produce, have already taken the plunge in helping replace trees in burned out areas.
“What a great cause! It’s good for a planet and applicable local communities,” said Lawrence. “Joe Produce was happy to be a part of this goal of 50,000 trees.”
Click the Arbor Day Challenge link below to learn more about the program and how you can donate.
WILMINGTON, DE - The DuPont Board of Directors have announced Edward D. Breen as the company’s newest Chair and Chief Executive Officer, and with it the potential for possible mergers and acquisitions with rivals like Syngenta and more.
"Ed Breen brings to DuPont an exceptional track record of business leadership and value creation,” said Alexander M. Cutler, DuPont's Lead Independent Director. “As a Chief Executive, he has consistently delivered superior returns through robust growth and portfolio strategies, across a range of industries. As a DuPont board member and interim chair and CEO, Ed has rapidly and actively engaged in advancing the transformation of DuPont."
Breen has served as interim chair and CEO of DuPont since October of this year, and joined the company's board in February 2015.
Last month while still in his interim position however, Breen said he was discussing possible deals with executives at rival agriculture companies, many of which are considering mergers amid what the Wall Street Journal is calling, “a three-year decline in crop prices that has pushed seed and pesticide prices down.” DuPont reportedly has been holding early-stage discussions with both Dow Chemical Co. and Syngenta AG, but these discussions may still not result in any definitive deals, people familiar with the matter told the Wall Street Journal.
As we’ve previously reported, in August, Monsanto pulled out of its offer to acquire Syngenta for $47 billion after the Swiss company said the offer “fundamentally undervalued” the costs it would take to implement a merger. While this deal would have created the world’s largest supplier of seeds and pesticides, analysts suggest that now Monsanto could be facing the threat of even bigger competitors if its rivals end up going through with a merger.
A merged Syngenta and DuPont would control about 27% of global pesticide sales, according to data from Morgan Stanley. However, analysts suggest that the combination would likely require a divestment of Syngenta’s U.S. seed business to avoid antitrust concerns, according to the Wall Street Journal.
DuPont and Dow’s agricultural operations combined would total about 17% control of the global market in pesticides, putting them solidly in third place behind Syngenta and Bayer, according to Morgan Stanley. Dow’s seed business could possibly also be divested if a deal were to go through.
For more on this story as it develops, stay tuned to AndNowUKnow.
EL SEGUNDO, CA – Though Fresh & Easy has struggled since coming out of its first Chapter 11 bankruptcy, the chain’s owner Yucaipa Companies, LLC, founded by renowned investor Ronald W. Burkle, decided to take on the challenge.
"[Tesco] decided to literally give us and the team half the company to see if we could save the jobs and their investment," Burkle wrote to the Los Angeles Times.
Burkle, who became a billion dollar investor due to sharp skills in the supermarket circuit, and his company acquired Fresh & Easy in 2013 with the idea of bringing more affluent shoppers to the chain and changes that would make it “more relevant to today’s consumer.”
Now, two years later, the chain is back in bakruptcy.
While analysts told the L.A. Times that Burkle’s Yucaipa Cos. underestimated the amount of investment and the level of competition in the market, Burkle told the publication that it was something he considered significantly before investing both his company’s time and reputation into trying to turn the stores around.
“Yucaipa did not commit sufficient capital on Fresh & Easy,” Burt Flickinger III, Managing Director of consulting firm Strategic Resource Group, told the Times. “Yucaipa bought the stores at a favorable price and thought they could operate them profitably, but it takes significant investment.”
Burkle countered in his writing, however, that the investment was simply too great. "The business was in a free fall. Turnarounds are tough, and falling knives are tougher yet."
Now the retail chain is closing its doors by the end of the month, a sharp turn after having only filed for its second Chapter 11 bankruptcy at the end of October.
While the situation is not the happy ending the company might have first envisioned, Burkle wrote that it wasn’t without effort and is a disappointing outcome.
"The chance would never come again to build something from an infrastructure like they had created," Burkle wrote. "In many ways, Fresh & Easy was a great opportunity to bring a new format to the market."
AndNowUKnow will continue to follow the story as it unfolds further.