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Frito-Lay, Strauss form joint venture to operate Sabra

BY Adam Kraemer

PURCHASE, N.Y. PepsiCo announced Monday it completed the formation of its joint venture with Strauss Group to operate hummus maker Sabra.

The venture, owned 50/50 by Pepsico’s Frito-Lay and Strauss, will make and sell dips and spreads, especially hummus—a spread made with mashed chickepeas, olive or sesame oil, and various spices—in the United States and Canada.

Sabra had 2007 sales of $65 million, and total U.S. sales of hummus last year were about $192 million, according to PepsiCo.

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Sara Lee could become the top seller of fresh bread in the nation

BY Jenna Duncan

ST. LOUIS Sara Lee Corp. could soon acquire Interstate Bakeries, the maker of Hostess cupcakes, Twinkies and Wonder Bread, Brenda Barnes, Sara Lee’s chief executive officer, said last month. The acquisition could be a major boost for Sara Lee’s lagging spot in the fresh bread market.

Sara Lee has also considered acquiring Folger’s Coffee and Oscar Mayer meats. However, Barnes said that Interstate would be the best fit for Sara Lee’s product line.

“Sara Lee needs to fill in its hole in the Northeast to be a credible national player,” Alexia Howard, an analyst with Sanford C. Bernstein Research in New York, said in an interview.

Barnes said in order for Sara Lee to consider any acquisition, the company would have to fit into its United States bread and meat businesses, U.S. body care lines, or overseas coffee and household products lines.

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Giant Eagle, other retailers charge chocolate companies with collusion

BY Michael Johnsen

PITTSBURGH Grocer Giant Eagle last week filed suit against confectionary giants Hershey, Mars, Nestle and Cadbury Schweppes in U.S. District Court Western District of Pennsylvania, charging the companies have been colluding on the pricing of chocolate since 2002 through 2008. “This action arises out of an international conspiracy among the world’s leading manufacturers of chocolate confectionery products [chocolate bars, boxed chocolates and seasonal novelty chocolates, as specified in the complaint] to fix, raise, maintain or stabilize prices for those products in Canada and the United States,” the complaint states, citing ongoing investigations by both the Canadian competition authorities and the U.S. Department of Justice. European authorities, including Germany’s Federal Cartel Office, are also investigating the companies for alleged price fixing, the complaint adds.

The Giant Eagle lawsuit is at least the fourth such lawsuit to be filed this month. In the U.S. District Court Eastern District of Pennsylvania, CVS and Rite Aid filed a joint suit March 21 versus the aforementioned defendants alleging price collusion. Publix filed suit March 10 and Meijer March 7. Kroger, Safeway, Walgreens and Hy-Vee filed a joint suit March 6.

Citing statistics reported by the United States Department of Agriculture, the Giant Eagle complaint places wholesale sales of chocolate candy in the U.S. at approximately $10.2 billion, with retail sales totaling $15.6 billion. A June 2007 report from Matrade New York reported that U.S. chocolate candy sales in 2006 totaled approximately 56 percent of all candy sales, Giant Eagle added. “Defendants collectively control almost 50 percent of the global chocolate confectionery products market, with Hershey controlling 8.2 percent, Nestle 12.6 percent, Cadbury 7.5 percent and Mars 14.8 percent,” the complain reads. “Defendants The Hershey C., Mars, Inc., and Nestle USA collectively possess approximately 80 percent of the U.S. chocolate confectionery products market, with The Hershey Co. possessing about 45 percent, Mars, Inc. about 27 percent and Nestle about 9 percent.”

Giant Eagle has requested a jury trial for the case.

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