Shop Talk
Retailers, consumers and prices
Check Out Line: Coke’s actions speak louder than its words
Check out Coke’s about face on its relationships with one of its bottlers.
Coke plans to buy the North American operations of its largest bottler, Coca Cola Enterprises, in a substantially cashless deal that would let it cut costs and be more flexible in its distribution.
The announcement of the deal comes just as Coke rival PepsiCo is about to close its own $7.8 billion purchase of its largest bottlers, Pepsi Bottling Group and PepsiAmericas. It also reverses Coke’s previous stance, spelled out in repeated comments over the past several months, that its current relationship with its bottlers was just fine and it didn’t need to copy Pepsi.
Coke CEO Muhtar Kent said last April when the Pepsi deal was first announced that its franchise model was the best way to go and repeated that stance again in July, September and December.
Also in the basket:
Dr Pepper Snapple tops view despite sales slump
Kohl’s profits up but outlook below expectations
Heinz third-quarter sales up 12.6 percent
BAT sees signs of recovery as earnings rise
Tim Hortons profit rises, boosts dividend
Carter’s Q4 beats estimates, sees growth in 2010
(Reuters photo)
Check Out Line: Food companies serve up tasty results
Check out the better-than-expected results being served up by food companies.
Chocolate maker Hershey posted a quarterly profit above analysts’ expectations, said it was on target to meet its 2010 earnings forecast and boosted its dividend. The company also said it would boost advertising to try to sell more candy, including Almond Joy and York peppermint patties.
Meanwhile, Archer Daniels Midland, one of the largest processors of corn and soybeans, saw its profit slip 2 percent, but the results still topped analysts’ forecasts, and Pepsi Bottling also topped Wall Street’s view as productivity improvements offset a dip in sales. Fruit and vegetable producer Dole Food reported a higher fourth-quarter profit and paid down debt.
Check Out Line: Billions for bottlers
Check out the multibillion bid for bottlers.
PepsiCo is offering about $6 billion to buy the shares it does not already own in its two largest bottlers, Pepsi Bottling Group and PepsiAmericas, to cut costs and secure control of its brands as growth switches to new noncarbonated drinks.
Pepsi‘s plan to consolidate its bottling business underlines an industry trend and would give it control of 80 percent of its North America beverage distribution volume.
Check Out Line: Thirsty for growth
Check Out liquid assets losing some steam.
While companies in every sector have been hit in the downturn, people still have to drink; especially when times are tough and they may reach for a little pick-me-up at a bar or a convenience store. That should help brewers and soda makers, right? Well, sort of.
MillerCoors, the combined U.S. operations of Molson Coors Brewing Co and SABMiller Plc, said quarterly net profit jumped 16.5 percent as it cut costs and raised prices. MillerCoors, the No. 2 U.S. beer company with brands such as Miller Lite and Coors Light, said sales rose 3.1 percent to $1.74 billion. Still, the U.S. beer category softened during the fourth quarter. A big reason the company did well was because it raised prices.
Molson Coors, meanwhile, said its fourth-quarter results were hit by slowing beer sales, higher commodity costs and that pesky foreign currency. The company’s worldwide beer volume rose 4 percent for the year, but fell 4.2 percent in the fourth quarter on a proforma basis. Fourth-quarter profit dropped 44.1 percent.
-
Resident Shop Talk Expert
-
