Food & Beverages

Unilever is test case for ‘edible stranded assets’

2 Feb 2024

The $123 bln consumer goods group relies on brands that look vulnerable to sugar taxes and changing eating habits. Like oil majors facing lower demand, Unilever and others like Nestlé may have to write down the value of these assets. Unfortunately, the problem defies easy fixes.

Capital Calls: HSBC, Delivery Hero

30 Jan 2024

Concise views on global finance: The global bank will pay a 57 mln pound penalty for misreporting depositor protection data; the Frankfurt-listed meal delivery company has sold a 4.5% stake in rival Deliveroo, at a loss.

Diageo investors seem braced for a beerier future

30 Jan 2024

The $78 bln drinks giant’s sales of spirits fell in the second half of 2023, but Guinness held up. If investors thought Diageo could hit its sales targets, it would be worth more. One takeaway is that they think more of its future revenue could come from less highly valued beer.

Capital Calls: Intel

26 Jan 2024

Concise views on global finance: A 67% rise for the chipmaker’s stock over the past year implied problems have melted away. The company’s warning that first-quarter earnings would fall 60% short of expectations is not the last reality check.

ADM accounting mess highlights risky exec comp

23 Jan 2024

The grain trader’s shares fell 24% after suspending its CFO amid an accounting investigation. One segment generating only 10% of profit determined a big chunk of executive bonuses. Whatever emerges, putting so much weight on small shifts in results invites problems.

Capital Calls: UK real estate merger

11 Jan 2024

Concise views on global finance: LondonMetric’s all-share move for domestic peer LXi isn’t a bargain, but creates a 4 bln pound landlord with benefits for both sides.

Capital Calls: Cognac, Euro zone inflation

5 Jan 2024

Concise views on global finance: China’s new brandy probe may not be French drinks giants’ main headache; new euro area inflation figures sit all the more awkwardly with the ECB’s refusal to consider rate cuts.

‘Polluter pays’ doctrine will take on new meaning

3 Jan 2024

Carbon-intensive throwaway fashion and ubiquitous plastic waste are dirtying the globe. That may change as governments start to crack down on discarded textiles and polymer-based items. Companies and their investors face a costlier journey to a more sustainable world.

Deflation will help big grocers gobble up minnows

29 Dec 2023

Supermarkets like Walmart and Tesco are expecting goods prices to finally fall. That will help larger chains to cut shoppers’ bills by putting pressure on suppliers such as Unilever. Smaller rivals may find it harder and end up losing customers, making them ripe for takeovers.

Restaurant deals will be back on the menu in 2024

22 Dec 2023

With the pandemic receding, US spending on dining out has topped $1.3 trln. Inflation has eaten into any exuberance, but as costs moderate and restaurants recoup margins, dealmaking will return, giving long-held investments like Panera a shot at cashing out.

Ozempic overshoot will plump up bargain-hunters

18 Dec 2023

New weight-loss drugs are highly effective, but investors risk overestimating how fast change will occur and how many people will take the therapies indefinitely. Some companies regarded as victims, such as Zimmer Biomet, may even benefit. Contrarian investors may profit in 2024.

Pricey Campari cognac deal requires a steady hand

15 Dec 2023

Bob Kunze-Concewitz is paying $1.2 bln for French brandy house Courvoisier, the CEO’s biggest purchase yet. At 17 times last year’s EBITDA the price looks punchy while demand for cognac slows in the US and China. Lowering the Italian group's growing debt pile could be hard.

Moutai price hike comes with bigger responsibility

22 Nov 2023

The Chinese booze giant has raised the wholesale price of its fiery liquor for the first time since 2018, lifting the spirits of investors in the $310 bln group. But it may have to share the windfall with its home province, which is grappling with a $380 bln debt hangover.

Mars’ posh pivot comes with a rich price

16 Nov 2023

The privately held Snickers maker is buying upmarket British brand Hotel Chocolat for $662 mln. Its premium products may benefit as consumers move away from cheap sugar-rich snacks. But UK shoppers are stretched, and Mars will need rapid growth to make an appetising return.

Diageo’s Latin American pain risks spreading

10 Nov 2023

Shares in the spirit company fell 16% on a profit warning. Cash-strapped customers are buying cheaper tequila and whisky and switching to beer. But with interest rates at their current high levels, depressed demand could soon hit Diageo’s larger markets and rivals as well.

Capital Calls: Regulating crypto

7 Nov 2023

Concise views on global finance: The US Securities and Exchange Commission is struggling to hire digital token experts, partly because prospective recruits aren’t willing to acquiesce to the agency’s requirement that they sell their holdings in bitcoin and beyond.

Starbucks will benefit from kicking coffee habit

2 Nov 2023

When the economy slows, as is increasingly expected in the $115 bln company’s key US and China markets, consumers brew more java at home. In 2008, its profit fell 53%. Food and customized drinks are the sorts of small affordable luxuries that should now provide a better cushion.

Aussie winemaker ferments risky US deal vintage

1 Nov 2023

Treasury Wine is spending $900 mln on California’s fast-growing Daou. It’s the latest step in the Penfolds maker’s recovery from Chinese tariffs that corked a third of earnings. But listed US rivals have struggled. And the $5.5 bln buyer has suffered American hangovers before.

Capital Calls: McDonald’s resilience

30 Oct 2023

Concise views on global finance: The Golden Arches’ global same-store sales rose 9% thanks to both selective menu-price increases and smaller meals in different markets. It demonstrates the company’s ability to keep pace with disparate economies’ stretched consumers.

Smithfield US homecoming looks like pig in a poke

30 Oct 2023

China’s biggest pork firm may relist its US unit in New York. With $7.6 bln in market cap, investors don’t seem to attach much value to its 2013 buy. Moving West is a hedge against geopolitics, but a revaluation is unlikely if the Washington-Beijing relationship remains fraught.