Sep. 11, 2014, 2:17 PM
- The cereal industry is undergoing a "death by a thousand cuts" with no single competing category or product delivering a knockout blow - but volume in the U.S. remaining stuck in a downward trend.
- Though Greek yogurt, the smoothie craze, fad diets, and the explosion of organic brands are all major headaches for cereal sellers, it might be the ambivalent attitude of millennials that proves to be the biggest challenge.
- A recent swing by Kellogg (NYSE:K), Post Holdings (NYSE:POST), and General Mills (NYSE:GIS) to wax nostalgic with marketing campaigns hasn't delivered as strong as results as anticipated and new product innovation (protein, gluten-free, no-fat) has been somewhat hit and miss.
- The battle for breakfast: An aggressive push by fast-food and fast-casual restaurants as well as the appeal of hit-and-run breakfasts from convenience-store chains has also impacted cereal sales, according to analysts.
Sep. 2, 2014, 7:02 AM
Aug. 6, 2014, 3:24 PM
- Kellogg (K +2.5%) is considering an offer for United Biscuits in the £2B range ($3.37B), according to reports from the U.K.
- Sources indicate the company is working with Barclays on how to structure an offer.
- The acquisition could give Kellogg new growth channels.
- United Biscuits is held by P-E firms Blackstone Group and PAI Partners.
Jul. 31, 2014, 8:19 AM
- Kellogg (NYSE:K) meets analyst estimates with its Q2 report, although both sales and profit were down from the year-ago period.
- Brand-building costs and lower volume impacted margins during the period.
- Q2 sales growth: U.S. Mornings Foods -5% to $820M; U.S. Snacks -2.6% to $893M; U.S, Specialty +1.5% to $276M; Europe +6.8% to $772M; Latin America +5.3% to $320M; Asia Pacific -1.6% to $243M.
- The company lowers FY14 EPS guidance to $3.91-$3.99 vs. $3.97-$4.05 prior.
- K -2.2% premarket
Jul. 31, 2014, 8:02 AM
Jul. 29, 2014, 11:37 AM
Jul. 25, 2014, 1:54 PM
Jul. 15, 2014, 11:29 AM
- Food giants plan to adapt to the growing importance of the dollar store channel by offering smaller package sizes to consumers.
- Companies such as Kellogg (K -1%) and General Mills (GIS) have found that products tailored to the dollar store demographic have a better chance of competing with private-label brands.
Jul. 14, 2014, 9:09 AM| Comment!
Jul. 2, 2014, 10:15 AM
- Food companies should get ahead of the curve by creating gluten-free children's food in the U.S., says Mintel.
- The market research firm notes a gluten-free trend in Europe which started with infant food has quickly moved into children's food.
- Kellogg (K) is already in the game with a gluten-free version of Rice Krispies which has generating $9.2M in sales in two years.
- Related stocks: POST, SJM, GIS, CPB, KRFT, MDLZ, PF.
Jun. 30, 2014, 1:04 PM
- A measure of corn inventories came in higher than expected today sending corn futures to their sharpest drop in close to a year.
- The USDA says inventories were 3.854B bushels on June 1 vs. 3.723B forecast and 2.766B a year ago.
- High corn prices has been a concern in the food sector (GIS, K, POST, KO, PEP, PPC, TSN, CPB, SJM) where sellers have warned on their ability to pass on the higher costs on to consumers.
- USDA crop report
- Related EFTs: CORN, JJG, GRU
Jun. 25, 2014, 11:46 AM
- A check of other branded food products companies following the sizable FQ4 miss from General Mills along with a sluggish FQ1 outlook, finds the group as a whole lower. Kellogg (K -1.4%), Post Holdings (POST +0.1%), Pinnacle Foods (PF -0.9%), and Mondelez (MDLZ -0.2%). General Mills is off 2.7%.
- Previously: General Mills misses by $0.05, misses on revenue
- Previously: General Mills starts new cost-cutting plans as sales slip, shares -3%
Jun. 9, 2014, 1:46 PM
- Data from NPD Group indicates the average American spends 12 minutes a day on breakfast.
- The highly-contested daypart pits major cereal sellers such as Kellogg (K), Post Holding (POST), and General Mills (GIS) against fast-food chains like McDonald's (MCD), Starbucks (SBUX), Taco Bell (YUM), and Dunkin' Brands (DNKN).
- Convenience-store chains are also a major factor as C-stores such as Circle K (ANCUF), 7-11, Pantry (PTRY), BP Connect (BP), On the Run (XOM), Speedway America (MPC), Kwik Shop (KR), and Qwiktrip continue to innovate and show some positive growth trends.
- What to watch: Analysis from Edward D. Jones suggests consumers tend to stay with their routines. The read is that companies in the breakfast business need to compete for market share within their segment - instead of trying to change consumer behavior. Taco Bell is utilizing that strategy with its marketing message which paints McDonald's as old-fashioned.
Jun. 3, 2014, 3:28 PM
- A takeover of Kellogg (K -0.1%) is no easy feat after shares rose 8% over the last month on merger buzz, notes The New York Times.
- The company carries around $7.4B in debt which limits the attraction of a straight leveraged buyout.
- If a buyer wants to snap up the consumer products company it might have to utilize the same strategy that Warren Buffett did with his Heinz acquisition in lining up a P-E partner with a patient long-term vision.
May. 28, 2014, 11:21 AM
- General Mills (GIS +0.1%) will become one of the first major cereal producers to leap into the protein craze with Cheerios Protein.
- The new product will be loaded with more than 3x the protein of a traditional breakfast cereal.
- Kellogg (K +0.2%) already has a Special K variety with protein available at stores.
- The big pictures: Cereal sales in the U.S. have suffered with ready-to-eat options and yogurt taking market share in the daypart.
May. 27, 2014, 7:28 AM
- A $6.4B offer by Pilgrim Pride's (PPC) to buy Hillshire Brands (HSH) could rattle the food sector.
- For starters, the deal could spoil Hillshire's offer on the table to buy Pinnacle Foods (PF).
- The quick analyst take on a PPC-HSH combination is favorable with the companies focused in different areas (chicken vs. packaged meat) which could lead to easy access to new distribution channels.
- Premarket: HSH +22.9% to $45.49, PF -5.3% to $31.50.
- Also on merger watch in the food sector: THS, SJM, GIS, KRFT, CPB, ADM, BGS, RAH, HAIN, K CAG
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