Food & Beverages

Pernod Ricard takes baby step towards Elliott

24 Jan 2019

The French spirits maker has named a lead independent director. The increased focus on corporate governance is a welcome start and one of the demands of the activist investor. More radical changes and cost cuts will be needed to close its operating margin gap with rival Diageo.

Patisserie Valerie has a way out of collapse

23 Jan 2019

The cake chain called in administrators KPMG, but buyers have expressed interest. To make the numbers stack up, the acquirer would likely wipe out most of the unsecured creditors, including chairman Luke Johnson. If this happens, the battered baker could yet have a future.

JAB departure is sign to halt deal binge

15 Jan 2019

Chairman Bart Becht unexpectedly retired from the Krispy Kreme owner after swallowing several chunky acquisitions. Rising debt and the declining value of investments like Coty raise questions about JAB’s model. The remaining partners need a break before returning to the table.

AB InBev’s Asia sale needs breathalyser test

14 Jan 2019

The Belgian brewer is said to be mulling an IPO of its Asian unit. The region is a fast-growing jewel in the drinks giant’s crown, yet it faces stiff competition in China, and still struggles in India and Southeast Asia. The mooted $70 bln valuation will be tough to keep down.

Constellation finds pipe dreams and debt don’t mix

9 Jan 2019

Higher costs and slower shipments hit the Modelo brewer’s earnings. The real driver of value ought to be its 38 pct stake in weed grower Canopy. But valuing its future potential is nigh impossible – whereas the debt Constellation used to fund its cannabis punt is all too real.

Starbucks will start brewing a venti Chinese deal

3 Jan 2019

The $80 bln coffee chain is targeting big mainland expansion, with some 6,000 stores by 2022. Such bold plans will run up against stiffer competition and trade-war-related pressure on U.S. companies. Starbucks would be smart to find local backers the way McDonald’s and Yum did.

German takeaway truce delivers tasty value treat

21 Dec 2018

Delivery Hero is selling its German business to rival Takeaway.com for 930 mln euros. As with Uber's capitulation to Didi in China's car-share wars, it means an end to cutthroat competition in another gig-economy market - and relief for both companies' investors.

Approach of peak chicken brings vat meat closer

12 Dec 2018

Today’s bird weighs up to five times as much as 60 years ago, putting it on track to be the world’s protein of choice. Yet the rate of growth is slowing because of the fowl’s physical limits. That’s a recipe for lab-grown alternatives, just as regulators clarify the rules.

Pernod Ricard served a shot of Diageo by Elliott

12 Dec 2018

The French booze group lags its rival on some counts, such as operating margins, but has bested it on others, notably share-price performance. Narrowing the gap on profitability, and improving corporate governance, as the activist urges, are worthy and achievable objectives.

Activism anxiety will grip French establishment

12 Dec 2018

Between the state and raiders like Vincent Bolloré, France is no stranger to meddling investors. But this year some blue-chips will face cage rattling. Pernod is just the start. The likes of Saint-Gobain, Danone, Renault - and even Bolloré’s Vivendi - are no longer off-limits.

Horlicks buyer may face big fat problem in India

29 Nov 2018

Unilever is a leading suitor for GlaxoSmithKline’s local $3 bln “nutrition” business, which includes the 145-year-old malted milk drink. As obesity and malnourishment climb up the national agenda, however, sugary Horlicks could lose its healthy image and limit its shelf life.

Dan Loeb’s soup victory is best served warm

26 Nov 2018

His activist fund Third Point is getting two members on Campbell Soup’s board. It’s a bigger win than the single seat cage-rattler Nelson Peltz got at P&G. Still, Loeb has been highly critical of Campbell, and his tactics were more aggressive. He has some buttering up to do.

Target deserves as much investor love as Walmart

20 Nov 2018

Owners wiped 11 pct off the retailer’s stock after it just missed estimates. Yet soaring online revenue and a rise in same-store sales show Target, like Walmart, is dealing well with shoppers’ changing habits. Its larger rival, though, sports a better multiple on lower margins.

Beyond Meat IPO could go from rare to charred

19 Nov 2018

Investors who take a bite of the plant-based meat maker could get a taste of rapid growth, top-notch leaders and a way to address the looming food crisis. But the company is restricting some shareholder rights and faces competition from traditional and fellow upstart firms alike.

U.S. disposal helps clear Diageo’s sales hangover

12 Nov 2018

The booze giant is offloading cheap-and-cheerful drinks like Popov vodka and Black Haus schnapps to rival Sazerac for $550 mln. Forswearing discount spirits, where sales are declining, should give investors a clearer view of consumers’ demand for its more expensive tipples.

Dan Loeb wins if he loses at Campbell Soup

1 Nov 2018

The activist rightly blames bad dealmaking for the near-halving of the foodmaker’s share price, and wants shareholders to replace the whole board. Yet cost cuts from those bad deals should raise Campbell’s valuation whatever happens. A mass ousting is neither likely nor helpful.

Wagamama may give Frankie & Benny’s indigestion

30 Oct 2018

Restaurant Group is splashing out 559 mln pounds – near its market value – on the noodle chain. With its Frankie & Benny’s chain struggling, it could use Wagamama’s growth. But even if the UK doesn’t capsize post-Brexit, it looks hard for the buyer to make a tasty return.

AB InBev debt detox points to flat future

25 Oct 2018

The Bud owner halved its dividend to pay down a debt mountain from buying SABMiller. This should free up $4 bln annually, but it could take eight years to hit its leverage targets. Any more trouble in emerging markets will mean an even longer wait for clear heads.

Moutai makes flammable fuel for China’s stimulus

26 Oct 2018

As companies bid for contracts tied to Beijing’s infrastructure surge, many may toast deals with a bottle of China’s best-known liquor. The $110 bln spirit maker offers a boozy play on government spending, but a sales surge could embarrass graft enforcers, prompting a crackdown.

Patisserie Valerie fate rests on accounts’ hot air

12 Oct 2018

The cream cake chain will go under without fresh cash, and its CFO has been arrested. The group’s operating strength implies shareholder Luke Johnson should cough up. That hinges on whether the company’s big cash pile has been stolen, or whether the accounts themselves are rotten.