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Articles in category: Retail & CPG/FMCG
A thirst for beer among Africa's middle classes is driving the world's biggest brewers to invest on the continent. ||| Johannesburg - A thirst for beer among Africa's middle classes is driving the world's biggest brewers to invest on the continent, but getting women to drink the beverage is another matter. One brewer, Heineken, is attempting to woo the elusive female African drinker with a sweeter, low-alcohol beer made from malt and lemon that it hopes will persuade them to try its other lagers. Siep Hiemstra, head of Heineken's African operations, said beer consumption on the continent ...(Read Full Article)
Poultry producer Astral Foods on Monday reported an 82% plunge in diluted headline earnings per share to 94c in the six months ended March as operating profit slumped 80% despite a 5% rise in revenue to R4.234bn. No interim divided was declared. Headline earnings for the period fell 82% to R36m as a result of losses by the poultry operations. These losses also affected the group’s operating profit, which, at R64m, was 80% down on the same period the previous year. The feed and other African operations’ profits were on a par with the previous year.
Thibaut Eissautier, the chief procurement officer at Diageo, who joined the drinks manufacturer in August 2012, told buyers a downturn often makes CEOs more receptive to new options and approaches. “It is an opportunity to try new approaches and develop a competitive advantage. I’m convinced one of the roles of buyers is to test the riskiest solution and to try and syndicate that within the company,” he said. Eissautier also said although recessions present both positives and negatives for purchasers, they do advance the cause of the profession by providing a more visible profile for activity and stakeholders who ...(Read Full Article)
SABMiller planned to boost beer volume sales in Africa by between 7 percent and 9 percent a year by slashing prices, using more local grains and cheaper packaging, and negotiating better tax terms with governments, the company said yesterday. “On average the African continent [in terms of gross domestic product] will grow 5 percent to 6 percent per annum we think… we would expect to capture maybe 2 to 3 percentage points [beer volume sales growth] above that,” SABMiller Africa’s finance director, Jonathan Kirby, told the Reuters Africa Investment Summit in Abuja, Nigeria. He said the brewer planned to ...(Read Full Article)
Last November a fire ripped through the clothing factory owned by Tazreen Fashions in Bangladesh, killing 112 people and injuring a further 150. After the fire, Wal-Mart said that it was unaware that any of its own-label clothing was being produced in the factory and had not authorised anyone to manufacture goods here for them. A report by Bangladeshi authorities suggested that the factory had not been fit for use and the retailer was criticised for not knowing where in its supply chain that goods were being produced. Wal-Mart said that it will be donating $1.6m to the Institute ...(Read Full Article)
Diageo will spend around £100m refocusing its global supply and procurement operations to reflect acquisitions in key emerging markets, but says the streamlining operation will probably mean job losses. Beer, wine and spirits giant Diageo announced today that it will transfer responsibility for local operations to 21 individual markets, while reducing the role of five regional structures worldwide. Although Diageo said it expected the restructure to cost around £100m (circa. $150m) the firm said..................(Read Full Article)
Oxfam has accused the world’s largest food and beverage companies of being “overly secretive” about their supply chains. As part of its Behind the Brands campaign, the charity rated the organisations on their policies in seven areas: worker rights and conditions; development of farmers who produce ingredients; land management; water use; climate change; how they protect women’s rights; and the transparency of their supply chains, policies and operations.
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The outlook for key commodities in 2013 is a major concern for all beverage companies. Exerting greater control over procurement, including achieving increased transparency with upstream suppliers, will be a critically important initiative for many beverage companies in 2013. According to a report from Rabobank, beverage companies will focus on new sourcing strategies to increase security of supply. While in the past, beverage manufacturers were more concerned
with buying their inputs at the lowest price, in a world of tightening supply and price volatility, security of supply has emerged as a key concern for many manufacturers.
North American investors have seen the successful takeover of South African retailer Massmart by US giant Walmart as a signal that investing in Africa is a valuable proposition. Africa is seen as a major investment frontier because of its young population, untapped resources and economic instability in other regions such as the European Union, African Venture Capital Association CEO Michelle Essomé said in an interview on Friday.
The merger between the largest and third-largest companies in the South African infant milk formula market, Nestlé and Pfizer Nutrition, has been approved by the Competition Tribunal, but with a detailed list of conditions to alleviate concerns about lessening of competition and potential price increases. The tribunal found, in its investigation into the effect of the global transaction on the South African market, that Aspen was the only other major company in the country and that the merger would leave only two competitors in the market, increasing the likelihood of price increases.
Following investigations by the UK government and various internal probes by food retailers, consumers in Britain and France have been told that Romanian horsemeat has been used in a range of ’beef products’, prompting supermarkets and suppliers to withdraw items from the shelves. This weekend, supermarket chains in France removed various lines in was has been described as a severe case of fraud, compounded by the tortuous supply chains that complicate the tracing of the beef’s origins.(Read Full Article)
The world's biggest food company, Swiss-based Nestle, and the world's top beef producer, JBS of Brazil, were on Tuesday the latest in a long list of firms to be caught up in Europe's spiralling horsemeat scandal. Their involvement in the fast-moving drama marked another milestone in a scandal that has seen supermarket chains across Europe pull from their shelves millions of "beef" products that are thought to contain horsemeat.
The parent company's chief financial officer, Cathy Smith, says the South African retailer, Massmart, has benefited from leveraging its purchasing and store-opening experience. Presenting a case study on ‘managing the complexity for growth’, Smith touched on developments that have occurred since Walmart acquired the majority stake in the retailer last year.(Read Full Article)
Wal-Mart said the plan to source more from the US, committing around $5bn a year to the scheme, is an effort to create US jobs and spur economic growth. The moves come as the US economy continues to grow slowly, however the proposed commitment from Wal-Mart is a drop in the bucket for the $15tn US economy. Wal-Mart’s US unit says about two-thirds of the goods it buys for its stores are made, sourced from or grown in the US...........................(Read Full Article)
United Parcel Service Inc said it would drop its 5.2 billion euro ($7 billion) bid for Dutch delivery firm TNT Express on the expectation of an EU veto, a sharp blow that halved the value of TNT's shares within minutes. US-based UPS, the world's No. 1 package delivery company, had sought to buy the Dutch firm to gain access to its European network and business in fast-growing Asia and Latin America.(Read Full Article)
Public disclosure of supply chains has gained attention in the media as retailers and clothing manufacturers, most notably Nike, have encouraged accountability in countries where unsafe conditions are widespread. In contrast, Wal-Mart, which has maintained its stance of not naming suppliers, maintains low costs in part by "turning a blind eye" to the conditions and safety of workers around the globe, according to John C. Liu, the New York City Comptroller.(Read Full Article)
KFC parent Yum Brands Inc said it had stopped using chicken from suppliers in China that are now under a government investigation before the review was even announced and analysts said they expect the company to recover from the business hit in its biggest market. Yum, which gets more than half of its overall revenue and operating profit from China, on Monday warned that bad publicity from a Chinese government food safety review of chicken suppliers hit its sales in China harder than expected in the latest quarter. Wall Street analysts expect that Yum's business will rebound as negative ...(Read Full Article)
Unilever has selected consulting, technology and outsourcing services provider Capgemini as its new finance and accounting service partner. The firm has been named as one of Unilever's global strategic suppliers under its 'Partner to Win' programme and has been awarded a five-year outsourcing contract valued at more than €100m.(Read Full Article)
South African drugmakers are the big winners in a $667 million contract to supply HIV drugs awarded this week by the government of Africa's largest economy, with three local companies taking nearly 60 percent of the deal. South Africa on Thursday awarded the two-year contract to 12 domestic and international firms to supply life-prolonging drugs to treat its biggest single health problem. Aspen Pharmacare, Africa's largest generic drugs maker, has won 20.6 percent of the contract, while smaller rival Adcock Ingram was awarded 14 percent, the health department said in a statement.(Read Full Article)
I suspect that Ben Goldacre's 'Bad Pharma' would not immediately come to mind as a recommended procurement read. Let me correct that misconception. While the book is primarily about the pharmaceutical industry, it has a sub-plot of market manipulation of buyers. It highlights how sales-forces, conferences, professional bodies, advertisements, magazine articles, and even academic journals are used to manipulate, within strategic marketing plans, to deliver sales. It is a book which should be read by every procurement manager, regardless of industry.(Read Full Article)
Hot on the heels of a sturdy operating profit announcement earlier this month, the Oceana Group, the biggest seller of canned fish in South Africa, reported that it had “zero” strikes in the past year, which was testimony to its good industrial relations.. Oceana chief executive Francois Kuttel said: “Our people and their performance are important to us, which we have proven by providing them with wellness programmes, securing their health and safety and ensuring zero fatalities on land during the year and zero fatalities for more than a decade at sea.”(Read Full Article)
There are some signs that the long-running love affair with South African retailers is starting to run out of steam in the local market. On Wednesday, the star performer among the fashion and homeware retailers, Mr Price, reported 35% growth in its interim earnings to end September.
Hulamin (HLM) said on Tuesday it had entered into an agreement with Bevcan (a division of Nampak Limited) to supply aluminium sheet for the manufacture of aluminium bodied beverage cans. Deliveries are expected to increase to 14‚000 tons by 2015‚ in addition to the can end and tab stock Hulamin currently supplies. The conversion of the can body to aluminium sheet in Southern Africa is a significant step in growing Hulamin’s local sales.(Read Full Article)