Premium Brands Holdings set to boost sales with new supply agreements in Asia

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November 16, 2023

Premium Brands Holdings, a primarily North America-focused food enterprise, has recently secured fresh supply agreements in Asia, potentially contributing an additional C$100 million ($73.2 million) to its sales.

The company, headquartered in Richmond, Canada, stated that the “new opportunities” will positively impact its sandwich, bakery, and protein segments, which are part of its largest business division, the branded Specialty Foods Group.

“For the first time in a long time, we’ve gained new listings in Asia,” president and CEO George Paleologou said as he presented third-quarter results.

“We see tremendous potential with regards to growing in that market. We’ve probably got about 50 SKUs that I think we should be able to list in the Asian markets, particularly in Japan, South Korea and China.

“I think at this point, internally, we are looking at it as a probably $100m opportunity in the shorter term.”

Premium Brands, boasting a varied product lineup encompassing bread, pastries, meat, sushi, and seafood, announced a 1.3% rise in group revenue for the third quarter, reaching C$1.64 billion.

Specialty Foods recorded a sales figure of C$1.06 billion, reflecting a 4.9% increase by the end of September. Meanwhile, the distribution and wholesale segment, primarily serving the foodservice industry through Premium Food Distribution (PDF), reported sales of C$586.9 million, marking a 4.6% decrease attributed to challenges in the lobster market.

Premium Brands, primarily expanding its business through mergers and acquisitions, finalized a seafood agreement for Menu-Mer in Quebec following the conclusion of the reporting period via the PFD business unit.

Not much information was revealed in Premium Brands’ results commentary regarding the completed transaction. However, the acquired company’s website indicates a specialization in the processing and sale of fish and seafood.

During discussions with analysts on November 14th, CFO William Kalutycz indicated that Menu-Mer boasts approximately C$28 million in sales.

In the announcement of the prior quarterly results in August, CEO Paleologou stated that the acquisition-driven Premium Brands, having successfully navigated through challenges such as extreme inflation, supply chain issues, and labor shortages, was once again actively pursuing mergers and acquisitions.

Asked yesterday about the risk of blowing the company’s cash on M&A and depleting the balance sheet, Paleologou said, “We’re very cautious. We’re involved in many friendly discussions with regards to companies joining Premium Brands, to the extent that the synergies are there and the opportunities for growth are there.

“We may do those deals and probably use our shares as a currency, if it makes sense from an IRR perspective.”

Kalutycz explained much of the company’s expansion focus has been on internal or organic growth, with five capital expenditure projects lined up, three of which are expected to be up and running in the fourth quarter.

“We expect to see significant acceleration in our organic growth rate as five major capacity expansion projects get commissioned over the next several quarters, all of which are focused on supporting our very successful US-based growth initiatives in premium frozen sandwiches, cooked protein, meat snacks and artisan baked goods,” Paleologou said in the results commentary.

UK grocery costs remain 30% higher than two years ago despite ongoing inflation easing

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November 16, 2023

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In October, UK grocery inflation demonstrated a consistent deceleration for the seventh consecutive month, as revealed by the latest data from the Office for National Statistics (ONS). Despite this ongoing moderation, the inflation rate remained below the double-digit threshold, underscoring a sustained trend of tempered price increases in the grocery sector.

The yearly escalation in prices for food and non-alcoholic beverages, as indicated by both the ONS’ Consumer Price Index (CPI) and the CPI including owner occupiers’ housing costs (CPIH), saw a reduction to 10.1%. This marks the most subdued rate of increase since June 2022.

The Consumer Price Index (CPI) for groceries, encompassing food and soft drinks, experienced a notable decrease of two percentage points when juxtaposed with the rate observed in September (12.1%). Similarly, the CPIH, which incorporates owner occupiers’ housing costs, also saw a decline from 12.2%.

The retraction in inflation could provide a welcomed relief for UK consumers grappling with increased financial pressure due to the impact of interest rate cycles on elevated mortgages and rents. However, it’s essential to note that the October Consumer Prices Index including owner occupiers’ housing costs (CPIH) remained 30% higher than its October 2021 counterpart. The measure had surged to 19.2% in March, reaching a level not observed in over 45 years.

Karen Betts, CEO of the UK’s Food and Drink Federation, welcomed the continued reduction in food costs. However, she also highlighted the challenges faced by industry manufacturers in mitigating the full brunt of inflationary pressures to shield consumers.

She mentioned that these endeavors have “affected manufacturing margins, causing them to decline to their lowest levels in four decades.”

Betts added, “While today’s figures are good news for shoppers, they come at the same time as we are seeing a concerning drop in investment in our industry, with investment in the first half of this year more than a third lower than in the same period four years ago.”

On a less optimistic note, the independent ONS entity reported that food and non-alcoholic beverages played a significant role in driving the overall annual inflation rates for CPIH and CPI in October. Nevertheless, when examining the monthly perspective, they ranked as the second-largest factors contributing to a decrease, following housing and household services.

In October, the Consumer Price Index (CPI) for groceries saw a modest increase of 0.1%, a notable deceleration from the 2% rise observed in October 2022. Although there was a relative slowdown, prices rebounded from a 0.2% decline in September, marking a reversal from the previous month, which, as indicated in the ONS report, was the first drop since September 2021.

Overall headline inflation, encompassing all goods, experienced a decline in October, reaching a two-year low for the Consumer Price Index (CPI). The outlook for the Consumer Prices Index including owner occupiers’ housing costs (CPIH) was slightly less optimistic, touching its lowest point since November 2021.

The Consumer Price Index (CPI) for all goods registered a rate of 4.6% over the 12 months ending in October, reflecting a notable decrease from the 6.7% pace observed in September. Notably, the index had reached its zenith at 11.1% in October 2022, marking the highest annual inflation rate since 1981.

The Office for National Statistics’ Consumer Prices Index including owner occupiers’ housing costs (CPIH) saw a reduction to 4.7%, down from 6.3% in September. This marks a continued retreat from the peak of over 40 years, with the index hitting 9.6% in October of the previous year.

Nicholas Hyett, an analyst at UK-based investment services business Wealth Club, said, “At the headline level at least, these numbers are cause for celebration.

“A substantial fall in inflation should help ease the cost-of-living crisis, while a pause in interest-rate rises will be a huge relief to mortgage holders.”

Within the grocery category – food and soft drinks – the ONS said today (15 November) that nine of the 11 sub-groups provided a downward effect on annual price increases. The two others, oils and fats, and coffee, tea and cocoa, were unchanged.

Milk, cheese, eggs and vegetables helped ease the pressure on shopping costs. However, the inflation rate for milk, cheese and eggs was still 7.9% higher than 12 months earlier, albeit down from 12.3% in September.

Similarly for vegetables, which also includes crisps, the annual rate of increase was 10.8% versus 14.4% in September.

Subway appoints Jeff Shepherd as new Chief Financial Officer

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November 16, 2023

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Subway, one of the world’s largest restaurant brands, has recently appointed Jeff Shepherd as its Chief Financial Officer (CFO).

Shepherd will directly report to John Chidsey, the Chief Executive Officer (CEO), and will supervise Subway’s worldwide finance organization. In this role, he will be responsible for both managing and enhancing the global financial performance and information security of the brand.

Shepherd takes over from Ben Wells, who is set to retire at the end of the year, concluding a remarkable 46-year career.

“Jeff has a well-earned reputation for driving strong financial results for global brands, bringing nearly 30 years of financial and accounting experience to our organization,” said Subway CEO John Chidsey. “As we welcome Jeff to Subway, we also thank Ben for his significant contributions. Since joining the company in December 2019, Ben has been a key driver of our brand’s global financial stability and strategic growth, contributing to 11 consecutive quarters of positive sales results.”

In his most recent position, Shepherd held the role of Executive Vice President and Chief Financial Officer at Advance Auto Parts. In this capacity, he formulated the financial strategy for the business and directed various finance functions, encompassing controllership and tax, financial planning and analysis, treasury, internal audit, pricing, and strategy.

Before joining Advance, Shepherd acted as the controller for General Motors Europe and occupied various senior positions within the organization. Additionally, he played pivotal roles at Ernst & Young, where he devised a procedure to guide global clients through bankruptcy and spearheaded tax remediation initiatives. Shepherd earned his bachelor’s degree in business administration, focusing on accounting, from Central Michigan University.

Situated at the company’s Shelton, Connecticut headquarters, Shepherd will collaborate closely with Wells throughout the remainder of the year, ensuring a smooth transition.

Starbucks continues to brew positive change with new community stores in Asia

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November 16, 2023

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Starbucks has opened a multitude of new community stores in Asia.

In Korea, Starbucks inaugurated its Community Store Jeju Sehwa Drive-Thru branch situated in Gujwa-eup, Jeju City, in early November.

A part of the cafe’s earnings will be contributed to the K-Green Foundation, aiming to assist the local community and promote increased awareness of sustainable practices.

In February 2023, Starbucks Korea organized a competition in collaboration with the Korea National Council on Social Welfare to identify programs for support through Community Stores. The K-Green Foundation emerged as one of the chosen nonprofit organizations (NGOs) selected by Starbucks partners and customers.

Within the framework of the Community Store program, Starbucks Korea will partner with the NGO to implement environmentally friendly initiatives that involve the local community, generate economic opportunities in Jeju, and launch campaigns promoting sustainable practices throughout Korea.

To mark the inauguration of the new Community Store, Starbucks Korea officially entered into a partnership agreement with the K-Green Foundation at Starbucks Jeju Sehwa Drive-Thru. The signing ceremony was graced by the presence of Ryan Sohn, CEO of Starbucks Korea, Teayoung Jung, director of the K-Green Foundation, and Starbucks Korea partners.

Under the terms of the agreement, Starbucks Korea will contribute up to KRW 100 million ($76,000) annually, derived from a percentage of the café’s revenue. This donation will aid a range of environmentally conscious initiatives, encompassing volunteer activities for Starbucks partners and customers, workshops focused on the environment, the upcycling of Starbucks coffee bean packaging, and the generation of additional economic opportunities for marginalized groups within the local community.

Meanwhile, Starbucks achieved a milestone in Vietnam as it opened its first Community Store in the country.

The focus of the Community Store is to aid youth vocational education in Vietnam, with VND3,000 ($0.12) from each beverage sold at the store allocated to training programs in collaboration with the nonprofit partner, REACH, for the upcoming three years.

As per Starbucks, the Community Store is integral to a worldwide initiative aimed at fortifying communities, fostering economic opportunities, and making a positive impact through collaborations with local nonprofit organizations.

The Starbucks Nguyen Huu Huan Community Store will endorse REACH, an organization dedicated to offering vulnerable youth vocational training, skills development, and employment opportunities, paving the way for a brighter future for them and their families.

Supported by grant funding from The Starbucks Foundation, Starbucks Vietnam initiated a partnership with REACH in conjunction with The Asia Foundation in 2016. This collaboration aimed to deliver vocational training, career guidance, and job placement services within the food and beverage industry (F&B) for young individuals in Vietnam. Starbucks Vietnam partners actively volunteered to mentor youth, and they plan to persist in volunteering for future cohorts with REACH.

Introduced in 2011, the Starbucks Community Stores were established to collaborate with organizations with a demonstrated track record of fostering advancement in disadvantaged communities. In addition to financial contributions, Starbucks frequently shared its business expertise to assist these groups in fulfilling their mission. This involved providing strategic technical and management assistance, collaborating on community service projects, and working with these organizations to bolster their job training and placement efforts.

Costa Coffee unveils its first plant-based ready-to-drink Oat Latte

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November 16, 2023

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Costa Coffee has unveiled its first plant-based Ready-to-Drink (RTD) product.

Exclusively debuting in more than 500 Tesco stores across the UK, the 750ml Oat Latte blends the distinctive, aromatic notes of Costa Coffee’s Signature Blend with velvety oats.

Costa Coffee’s Head of FMCG UK&I, Mark Cumming, stated that the creation of the new beverage was informed by crucial research indicating that consumers favor oat milk in coffee, highlighting creaminess as the primary factor driving the preference for oat-based options.

“We are excited to introduce our 750ml Oat Latte, a product that demonstrates our ongoing commitment to innovation in our RTD range. We understand that consumers today seek not only great taste but also products that align with their lifestyle or dietary requirements,” Cumming said.

The introduction is a strategic move by Costa Coffee to capitalize on the continuous diversification of the Ready-to-Drink (RTD) coffee segment. This evolution is characterized by the introduction of novel flavors, functionalities, and formats, aiming to position Costa Coffee as the fastest-growing major brand in the RTD coffee market.

Established in 1971 in London by Italian siblings Sergio and Bruno Costa, Costa Coffee has a global presence, spanning 45 countries. It boasts over 2,800 coffee shops in the UK & Ireland and 1,300 establishments worldwide.

Tim Hortons set to debut in Singapore with first cafe at VivoCity

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November 16, 2023

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Canadian coffee brand Tim Hortons is poised to make its debut in Singapore with the grand opening of its first cafe at VivoCity on November 17th.

The café will showcase a range of iconic menu offerings, featuring signature coffee beverages crafted from 100% Premium Arabica Beans. Additionally, patrons can indulge in a diverse selection of freshly prepared sourdough melts and baked goods, including the internationally adored bite-sized doughnuts referred to as Timbits.

Earlier this year, the Japanese conglomerate Marubeni Corporation disclosed its entry into an exclusive agreement with Tim Hortons Asia Pacific Pte. Ltd. through its wholly-owned Singapore-based subsidiary, Marubeni Growth Capital Asia Pte. Ltd. This collaboration aims to introduce the Tim Hortons brand to the Singaporean market.

“We are delighted to introduce the Tim Hortons brand in Singapore. We firmly believe that fundamental consumer trends fuel the coffee, food and beverage sector, and we are committed to establishing a lasting and sustainable presence in the region, hand in hand with our valued partners,” said Bharat Sarma, President and Senior Managing Director, Marubeni Growth Capital Asia.

Following the VivoCity launch, Tim Hortons has already set its sights on opening outlets in Nex, One Raffles Place, and Suntec City.

General Atlantic set to become majority stakeholder in Joe & the Juice with $600M deal

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November 16, 2023

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General Atlantic, a private equity firm headquartered in the United States, has finalized a deal to expand its ownership in Joe & the Juice, a Denmark-based company known for its juice bar and coffee concept.

While the specific financial terms of the agreement were not disclosed by the companies, a Financial Times report suggests that the deal’s estimated value could be around $600 million.

General Atlantic acquired the extra stake in the company from Valedo Partners, which has agreed to completely divest its investment in Joe & the Juice.

In 2013, Valedo Partners secured a 90% controlling interest in Joe & The Juice. The founder of the chain, Kaspar Basse, retained the remaining 10% stake, as reported by the World Coffee Portal.

In 2016, General Atlantic initially obtained a minority interest in the juice bar and coffee concept through a strategic minority growth investment.

Upon completing the latest transaction, General Atlantic will become the majority stakeholder of Joe & the Juice.

General Atlantic managing director and consume global head Andrew Crawford said, “As a long-term partner to Joe & the Juice, General Atlantic is proud to become a majority investor in the brand and continue our collaboration with the management team.

“Joe & the Juice’s business momentum is inflecting and we are excited to build on the Company’s digital traction and accelerate company-owned and franchised unit growth.”

The agreement will enable Joe & the Juice to accelerate its plans for international expansion.

Joe & the Juice intends to allocate a portion of General Atlantic’s investment to both debt reduction and the expansion of its store presence in emerging overseas markets, including the UK, Europe, the Middle East, Asia, and Latin America.

At present, Joe & the Juice runs a network of over 360 stores spanning across 18 countries.

Joe & the Juice CEO Thomas Noroxe said, “We are delighted to have General Atlantic’s expanded commitment to Joe & the Juice. Over the past seven years, General Atlantic has demonstrated a true dedication to collaboration as we have worked together to achieve our growth aspirations.

“As we make strides into our next chapter, we look forward to bringing Joe & the Juice to more customers globally through our focus on geographic expansion, franchising and a seamless omni-channel experience.”

The transaction is anticipated to be finalized in the fourth quarter of 2023, pending the fulfillment of standard closing conditions and regulatory approvals.

British supermarket giant Asda struggles to keep pace with rivals following 2.8% Q3 sales rise

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November 16, 2023

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On Tuesday, Asda, the third-largest supermarket group in Britain, reported a 2.8% year-on-year increase in its underlying sales for the third quarter. This marks a significant deceleration compared to the 9.6% growth recorded in the preceding quarter and represents an underperformance relative to its larger competitors.

The supermarket, which is owned by Zuber and Mohsin Issa along with the private equity group TDR Capital, disclosed a revenue of £5.4 billion ($6.7 billion) for the three months ending in September.

Asda reported a 3.2% increase in like-for-like food sales, but experienced a decline of 3.4% in clothing and general merchandise sales. Similar to other retailers, Asda attributed this dip to the adverse effects of unseasonable weather during this period.

Last week, Sainsbury’s, the second-largest player, reported a 6.6% rise in underlying sales for the second quarter ending on September 16. Moreover, market leader Tesco disclosed an 8.4% increase in like-for-like sales for the second quarter in the UK during October.

Throughout this year, monthly industry data has consistently indicated that Asda is not performing as well as its competitors.

Asda also announced the repayment of a £200 million loan facility, which was initially utilized for the acquisition of the Co-op’s convenience stores and forecourts business last year.

“Asda has a sustainable capital structure, strong cash generation and clear strategy to deleverage over time, as the early repayment of the loan facility used to acquire the Co-op business demonstrates,” finance chief Michael Gleeson said.

Last month, Asda concluded the acquisition of the majority of the UK & Ireland business from petrol forecourt operator and retailer EG Group, amounting to an enterprise value of £2.07 billion.

As part of its strategy to enhance its presence in convenience stores, Asda aims to deploy Asda Express stores across EG’s 356 locations in the UK.

The Issa brothers and TDR are also the owners of EG.

Aldo expands presence in India with grand opening of 4th store in Hyderabad, marking 66th outlet in the country

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November 16, 2023

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On Wednesday, Apparel Group India, the franchise operator for the Canadian footwear brand, revealed in a LinkedIn post that Aldo has inaugurated a new store in Hyderabad.

“We’re thrilled to announce Aldo’s new store at L&T Next Premia Mall, Irrum Manzil. This is the brand’s 4th store in Hyderabad and the 66th store in India!,” Apparel Group India said in a LinkedIn post.

Founded in 1972 as Aldo Shoes, Aldo began as a footwear retailer. The company opened its first store in 1987, located in Montreal, Canada.

The company, headquartered in Montreal, offers a range of footwear for both men and women. Additionally, it distributes its shoes in India through the e-commerce site Aldo.in.

As per information available on its website, the company currently operates close to 3,000 stores across 100 countries worldwide.

Last month, the brand celebrated the opening of two new stores at the Mall of Asia in Bengaluru, bringing the total count to 11 stores in the city.

Auric redefines snacking, launches nutrient-rich, Baked Noodles in exciting flavors

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November 16, 2023

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In a groundbreaking move, Auric, a wellness-focused company, has introduced a revolutionary snacking option – Baked Noodles. Deepak Agarwal, the Founder & CEO of Auric, recently shared the exciting news on his LinkedIn, highlighting the company’s commitment to offering healthier alternatives in the popular and expansive noodle market.

Noodles, a beloved snack in many households, holds a special place in the hearts of many, often associated with cherished memories. However, a startling revelation about the conventional noodle-making process has prompted Auric to rethink the traditional method.

Agarwal, in his post, pointed out that most noodles, including the iconic Maggi, undergo deep frying in oil before being packed. This process adds significant amounts of oil and cholesterol to the product, factors often overlooked by consumers.

Aiming to address this concern and offer a healthier alternative, the team at Auric decided to innovate by introducing a noodle with Zero Oil, Zero Cholesterol, Zero Maida (refined flour), and Zero MSG. The key to this transformation lies in the replacement of frying with baking and swapping out Maida with nutrient-rich millets.

Auric Baked Noodles is not just a snack; it’s a nutritious choice made from foxtail millet flour, bringing Ayurvedic principles to snacking occasions. The product aligns with the Ayurvedic lifestyle (Sattvik) by focusing on herbs, purity, and health.

With 40% millet content and 50% more protein than traditional noodles, Auric Baked Noodles offer a range of health benefits. They have a low glycemic index, making them suitable for diabetes management, and contribute to heart health through anti-inflammatory properties. The absence of maida supports healthy cholesterol levels, making it a conscious choice for consumers.

The three exciting flavors – Italian Cheese & Herbs, Mexican Peri Peri, and Chinese Schezwan – promise a symphony of taste, challenging the conventional expectations associated with instant noodles.

As health-conscious consumers seek alternatives to traditional snacks, Auric Baked Noodles emerges as a nutritious and flavorful option, challenging the norms of the noodle market. With its commitment to purity, Ayurveda, and innovative snacking, Auric is set to redefine the way people indulge in their favorite instant noodles.

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