What non-US companies are key players in the food & beverage industry?

Some of the top companies in the world that are key players in the food & beverage industry are Nestlé, Danone, and Heineken International. These companies have heavy influences in their respective sectors and have some of the top grossing food sales in the industry.

Nestlé is widely regarded as the largest producer of food and beverages in the world. According to foodengineeringmag.com, Nestlé’s food sales nearly double the next highest competitor’s (PepsiCo, inc.) for the top company in the food & beverage industry. Nestlé covers a wide variety of products, from baby food to bottled water to coffee to chocolate and frozen foods. Despite it’s broad range of subjects, the company has drastically exceeded its expectations in sales growth. This past year Nestlé had a 7.5% sales growth overall.

Danone is a company based in France, whose recent joint venture with Unimilk has placed them as the top company in the Russian dairy product market. Danone is so influential because it is so widespread. France and Russia each make up approximately 11% of Danone’s business, but no other country makes up for more than 8% of their business. This distribution of business not only gives Danone a foothold in many countries, but it also cuts the risk of a large company loss due to issues in one area. This company is also very socially responsible, which strengthens their influence on the industry and the global community. They have reduced their carbon footprint by nearly 30% since 2008.

Heineken is one of the world’s largest and most successful beverage companies. Heineken is recognized as “the world’s most international brewer”, owning over 125 breweries in over 70 countries. On top of their widespread presence, Heineken is the largest brewer in Europe and is the largest producer of cider in the world. As well as having a great global presence, Heineken is one of the world’s leading brewers in terms of sales volume and profitability. according to foodengineeringmag.com, Heineken has the fourteenth highest sales in the food & beverage industry.

"Food Engineering." www.foodengineeringmag.com. N.p., n.d. Web. 27 Feb. 2012. <www.foodengineeringmag.com/ext/resources/FE/Home/Files/PDFs/fex0911p_066.pdf>.

"Heineken International Heineken International - Profile." Heineken International | HEINEKEN is one of the world's great brewers and is committed to growth and remaining independent.. N.p., n.d. Web. 27 Feb. 2012. <http://www.heinekeninternational.com/companystrategyprofile.aspx>.

"Summary Box: Nestle sales beat hopes - CBS 5 - KPHO ." CBS 5 - KPHO - CBS 5 AZ KPHO | Phoenix, Arizona, breaking news, weather,channel. N.p., n.d. Web. 27 Feb. 2012. <http://www.kpho.com/story/16951590/summary-box-nestle-sales-beat-hopes>.

Térisse, Pierre-André. "Presentation - Our company - Danone ." Home - Danone . N.p., n.d. Web. 27 Feb. 2012. <http://www.danone.com/en/company/introduction.html>.

SABMiller : Strong Non-U.S. Company in the Beverage Market

Benjamin S. Marks

SABMiller is a non-us company that is a key player in the Beverage industry. SABMiller is a global company that is headquartered in the United Kingdom, and is also the world’s second largest brewer in the world based on revenue. This makes SABMiller a key player in the Beverage industry as it expands into many markets, as well as having an extremely strong presence in South Africa.  

SABMiller shows that it is a strong company through its dividends as it increased its dividends per share by 19% from 2010 to 2011 (68 cents to 81). They also saw an increase in their adjusted EPS (earnings per share) by 19%. The numbers for the company do not end there, as they lowered their net debt by 16% and increased their production by 2%.

While SABMiller was created by SAB (South African Breweries) acquiring Miller Brewing, the SAB portion of the company is what dominates South Africa. SAB has multiple breweries in South Africa. Furthermore, this portion of SABMILLER contains hops farms in South Africa, which allows the company to amplify its foothold in South Africa as they supply, create, bottle, and distribute the products through their company.

SABMiller also strengthens its foothold in South Africa through its soft drink division called Amalgamated Beverage industries. This division is the largest producer and distributor of Coca-Cola products in South Africa and reaps the benefits of producing the Coca-Cola Company’s products. This is also a big money maker for the company.

23% of SABMiller’s business is from South Africa, and its only bigger area of Business is Latin America with 31%. What makes SABMiller a key player in this region is that their “primary brewing and beverage operations cover six countries across South and Central America.” What is special about this is that within each of these countries, they are the number one brewer by market share.

With these two regions making up 54% of their business and for SABMiller to be the number one brewer in these areas shows the companies dominance in the Beverage industry.

* A key thing to note is that SABMiller is always trying to expand their footholds. A great example of this is shown as they are trying to double their capacity in Uganda. This is a great example of why SABMiller is such a strong Non-US Company. *

http://www.sabmiller.com/files/reports/ar2011/2011_annual_report.pdf

http://www.sabmiller.com/index.asp?pageid=2

The Success of Coca-Cola

With the beverage industry, there is one company that has made great global impact on the world. After its discovery in 1886, Coca-Cola was able to distribute its brand and product to over 100 countries in the world. It's large growth was due to the smart decisions of marketing throughout their history. After other competitors started to imitate Coca-Cola, they started to create a unique bottle for themselves, which is now their simple. After that, they were able to go global through the American Troops during WWII, by supplying them with the "six pack" and promising that every man in uniform to get a bottle. This allowed them to penetrate through other countries and gain popularity.

http://heritage.coca-cola.com/timeline.swf

Global Companies

McDonalds is the leading "global foodservice retailer with more than 33,000 local restaurants serving nearly 68 millions people in 119 countries each day" according to its website. McDonald's, although considered classically American by many, has also tailored its food to fit the countries that it resides in. For example, on McDonald's website you are able to click on the map and find a region of the world and see a menu that will generally be the same throughout that country. Because 80% of McDonalds restaurants are franchised, menus can be specialized and tailored to specific countries cultural and religious needs. This has been the key to McDonald's success around the world and has allowed it to keep expanding.

http://www.aboutmcdonalds.com/mcd/our_company.html

Outsourcing

Sophie Paridon

Blog 3C

Outsourcing Benefits and Causes

The food and beverage industry is relevant across the world, and there are several companies and restaurants that are relevant In the United States as well as overseas, such as Hershey’s and McDonald’s. This means that almost all players in this industry can be manufactured overseas, including employees, research and development, and the suppliers. For example, Shellz Overseas Private Limited Company exports both food additives (a link in the supply chain) and confectionaries (an end product) to the United States. Outsourcing is very common because it allows manufacturers to expand and “fill niche product lines and execute many functions more efficiently -- from production to product development, R&D to maintenance” (Fusaro). Many companies outsource in order to be more efficient, save money, and access more technology and equipment.

There has been a trend in India for a growing appreciation for Western fast foods. Due to this trend, Dunkin Donuts and Starbucks are starting to open up locations in India this summer. The “growing adoption of international tastes is pushing coffee consumption in India to rise 6% to 7% a year” (Ahmed). The food and beverage industry in the United States has realized this drift, and are therefore starting to manufacture more goods overseas, as well as opening up new chain locations.

However, several companies are against outsourcing because they want to be able to maintain control of their product and overlook the production of their goods. They want to control all elements of their products in order to assure quality. Companies that are against outsourcing also claim that outsourcing can lead to higher costs, lower quality goods, and late deliveries.

Despite the different views of outsourcing within the food and beverage industry, it is clear that this trend will continue for some companies, because they favor the benefits of more sources and lower costs. In addition, chains and companies will continue to open and sell across the world, thus creating a sense of unification across the globe.

Heineken & Nestle: Stand Out Corporations in the Food & Beverage Industry

Two companies in the Food & Beverage industry that stand out because of their Corporate Social Responsibility are Nestle and Heineken.

           

Heineken is the seventh most corporately responsible company in the world by the Two Tomorrows consultancy firm. They are tackling the question of corporate social responsibility through their “Brewing a Better Future” Campaign. Heineken’s ambition is to become the worlds greenest international brewer.

The company is trying to achieve this ambition through three strategic imperatives: to continuously improve the environmental impact of their brands and business, empower their people and the communities in which they operate, and to positively impact the role of beer in society.

Under these three imperatives, Heineken has created 22 programs for corporate social responsibility that they have categorized under six sustainable strategic initiatives: Green Brewing, Green Commerce, Engaging Employees, HEINEKEN Cares, Responsible Consumption, and Partnerships for Progress.

            Heineken has also implemented several large sustainability and socially conscious programs around the world. For example, they developed the Heineken Africa Foundation to support the improvement of health for people living in Sub-Saharan African communities by financially supporting relevant health projects and health-related education.

Nestle is constantly rated as one of the most socially responsible companies in the world. Two Tomorrows considers Nestle to be the second most socially responsible in the world.

            In 2007, Nestle had a 1.22 percent reduction of packaging materials that they used for bottled water, a 2.3 percent reduction in total energy use, a 3.16 percent reduction of greenhouse gas emissions, and a 4.28 percent reduction of water withdrawal. Nestle also recycled 86 percent of its solid waste from factories in 2007 and are approaching an entirely recyclable environment soon. They are constantly improving on these numbers and becoming more environmentally responsible every year, and what helps the environment helps society.

            Nestle also sponsors and develops a number of socially beneficial programs worldwide. The most noted of these that they have participated in recently is an effort to conserve water in Italy. Nestle is engaging its tomato suppliers in the Piacenza and Parma regions of Italy to attempt to reduce the use of water for irrigation on their farms. By using solar-powered CropSense Soil Moisture Monitoring technology, farmers are able to use an exact amount of water that their crops will need to prevent excess. Since the induction of these practices, yields for tomatoes have nearly doubled, the quality of the tomatoes (which is measured in sugar content) has increased by 15 percent, and the water used to produce a ton of tomatoes has decreased by 45 percent.

"Food Politics » Corporate social responsibility: real or oxymoron?." Food Politics. N.p., n.d. Web. 19 Feb. 2012. <http://www.foodpolitics.com/2010/04/corporate-social-responsibility-real-or-oxymoron/>.

“Food industry well-respected for CSR efforts: Survey." Food Ingredients - Yeast, Sweeteners, Food fibers, Flavors. N.p., n.d. Web. 19 Feb. 2012. <http://www.foodnavigator-usa.com/Business/Food-industry-well-respected-for-CSR-efforts-Survey>.


"Heineken International Heineken Africa Foundation." Heineken International | HEINEKEN is one of the world's great brewers and is committed to growth and remaining independent.. N.p., n.d. Web. 19 Feb. 2012. <http://www.heinekeninternational.com/heineken_africa_foundation.aspx>.





"Heineken International Strategy." Heineken International | HEINEKEN is one of the world's great brewers and is committed to growth and remaining independent.. N.p., n.d. Web. 19 Feb. 2012. <http://www.heinekeninternational.com/sustainability_strategy.aspx>.



"Unilever comes out top in corporate responsibility rating." Food Ingredients & Food Science - Additives, Flavours, Starch. N.p., n.d. Web. 19 Feb. 2012. <http://www.foodnavigator.com/Financial-Industry/Unilever-comes-out-top-in-corporate-responsibility-rating>.

Current Events in the Food and Beverage Industry: Organic Food Agreement signed by both E.U. & U.S.

Benjamin S. Marks

Organic Food Agreement signed by both E.U. & U.S.

Both the United States and the European Union have both signed the Organic Food Agreement. This trade treaty was signed a few days ago on February 15^th 2011, and allows certified products in either the United States or the EU countries to sell to both areas.

This is very beneficial for a number of reasons. Before this agreement had been reached, producers (companies and growers) had to receive separate certifications for both sides of the Atlantic if they wished to sell their goods as organic. This translated to an inefficient system where they would have to go through double the paperwork, double the inspections of their organic goods, as well as a doubling of the fees needing to pay for the process. With this trade agreement signed though, now as long as a producer is certified in either the E.U. or the U.S. in order to sell organic to both places.

According to both sides, this agreement is said to “help farmers by opening up new markets to them and lowering their costs.” Furthermore, this should helps the consumers because with more competition due to the increase of suppliers, basic economics tell us the price should fall. This is a relatively big impact for the industry as it allows the producers to expand their market reach, but also provides them with more competition. Ultimately the consumers should gain the most out of this with lower cost organic foods, even though the producers will receive the benefit of lower costs.

Another thing that should be noted is that while the Organic Food Agreement was signed on February 15^th , it will not be take effect until June 1^st. This will give a nice transition period for the two regions that make up the world’s largest organic producers (a combined value of roughly $50 billion).

Cited works:

"Brussels, Washington Sign Organic Food Deal." Global Food Industry Business News, Information, Insight and Executive Interviews. Web. 20 Feb. 2012. <http://www.just-food.com/news/brussels-washington-sign-organic-food-deal_id118279.aspx>.

Press, The Associated. "US Signs Organic Food Agreement with EU -  Money - MSN CA."  Personal Finance, Business and Market News - Money - MSN CA. Web. 20 Feb. 2012. <http://money.ca.msn.com/investing/news/business-news/us-signs-organic-food-agreement-with-eu>.

Sophie Paridon
Blog 2C

 Unaddressed Ethical Issues Could Destroy Our Ecosystem

Within the food industry, fish are a common choice among consumers due both to their health benefits as well as their high availability. Stores commonly carry fish, ranging from fresh salmon to canned anchovies. Similarly, most menus in restaurants now make fish options available. However, there is a list of sustainable fish that affects fishing in the fish industry. If specific seafood is rare and their species is in danger of going extinct, they will not be placed on this list, but rather placed on the “fish to avoid” list. However, if a certain type of seafood is plentiful and sustainable, they are added to the list of sustainable fish, which make them openly available for fishing and selling to customers for food. In addition, the Marine Conservation Society publishes seafood advice, advising customers which seafood they can eat regularly, on occasion, or rarely at all based on their availability.

The ethical dilemmas that people in the food industry must face are whether or not they follow these guidelines, as well as how to fish in a way that will not destroy the ecosystem. There are some fish that are recommended not to overfish in fear that they will soon be added to the list of “fish to avoid because of the pressure on stocks and threats to other species in the food chain such as marine birds” (Smithers). This is important since the Food and Agriculture Organization reports “that nearly 70 per cent of the world’s fish stocks are now fully fished, over-fished, or depleted”. However, it is thought that if supermarkets start to only demand sustainable fish that “the fishing industry and politicians will rapidly act to ensure that fishing practices are improved (“Catching”). There is also an ethical dilemma in the way that fisheries are fishing. It is important to fish in ways that protects the environment and the fish and avoiding fishing methods that cause pollution, which is common in fish farms. Fisheries should never dump their gasoline, oil, or trash in the water. However, this is a common issue and the ethical debate within the fish industry has been gaining popularity. With the issue of overfishing and pollution, this is not only an issue for fisheries, but for customers as well. The ecosystem may take a deep spiral downwards if these ethical dilemmas are not addressed.

http://www.guardian.co.uk/environment/2012/feb/08/farmed-oysters-menu

http://www.fintalk.com/resources/general/etiquette.html