Retailers, consumers and prices
Check out Coke’s about face on its relationships with one of its bottlers.
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.
Also in the basket:
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.
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 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.