jerryking + supply_chain_squeeze   12

Plant-based ‘meat’ craze drives demand for yellow peas
JULY 3, 2019 | Financial Times | by Emiko Terazono.

The soaring popularity of plant-based meat substitutes has shone a spotlight on a new star ingredient: the humble pea.....From Beyond Meat, which has seen its shares rocket after a flotation in May, to US meat producer Tyson and Nestlé of Switzerland, food companies are turning to protein from the yellow pea as the key ingredient for plant-based foods including burgers, bacon, tuna and yoghurt...The rush to introduce products amid a spike in demand from consumers has led to a scramble to secure supplies. The squeeze has not been caused by the availability of the yellow pea itself — which is plentiful, boosted by Chinese curbs on Canadian imports in the wake of the Huawei row, and a move by India to place tariffs on pulses — but a lack of processing capacity to produce the protein powder extracted from the legume. Producers have simply not kept pace........companies are received just 25% of their pea-protein orders as suppliers diverted the shipment to other buyers....in the face of increased demand....locking down supplies had been front of mind. “We’ve started building up a stockpile. Everyone else is doing it as well.”....Yellow peas, a pulse or dry edible seed that is part of the legume family alongside soyabeans, lentils and chickpeas, have become the protein source of choice for many food companies as consumers are turning away from soyabeans......there is no exchange-based market for pea protein isolate and prices are hard to track,... demand is so strong that buyers have struggled to secure long-term supply deals. “For companies that want to lock in prices for the remainder of 2019 and 2020, there is reluctance from their suppliers to guarantee higher quantities at lower prices,”...Beyond Meat has signed a three-year contract for its pea protein with Puris, adding to a supply agreement with Roquette, which expires at the end of the year. .....Ripple Foods, a California start-up that produces pea-protein based milk, has seen sales double every year since it launched in 2016. The company, which counts Goldman Sachs among its investors, contracts farmers to grow yellow peas and then processes its own pea protein. That insulates Ripple from price swings.....taking Ripple out of the pea protein market...An increasing number of food and ingredient companies have invested in the pea protein sector over the past few years. Cargill.... backed Puris at the start of last year, putting in $25m and launching a joint venture.

New plants to produce pea protein are expected to get up and running over the next year. Roquette is building a processing plant in Manitoba, Canada, while Verdient Foods of Saskatchewan, a plant protein group backed by James Cameron, the Oscar-winning director of the film Titanic, is also planning new capacity.

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Beyond_Meat  Big_Food  Cargill  food_tech  legumes  Nestlé  plant-based  pulses  Puris  proteins  Ripple  Roquette  soybeans  stockpiles  supply_chains  supply_chain_squeeze  Tyson  Verdient 
july 2019 by jerryking
Produce or Else: Wal-Mart and Kroger Get Tough With Food Suppliers on Delays
Nov. 27, 2017 | WSJ | By Annie Gasparro, Heather Haddon and Sarah Nassauer

Grocers are giving food companies a tougher mandate: Ship on time, or pay the price.
Food retailers want their suppliers to resolve the persistent problem of delayed or incomplete deliveries, which they say costs them millions of dollars a year in lost sales and overtime pay.
Retailers used to give suppliers more leeway, since any number of factors—bad weather, a surge in demand, technology malfunctions—can foil deliveries of cereal, cheese, candy and other packaged goods from warehouses scattered around the country.
But now as traditional grocers battle Amazon.com<http://Amazon.com> Inc. and other online retailers that prioritize delivery speed, as well as price-cutting discounters, more are taking a strict line with suppliers, telling them on-time deliveries will translate directly into more sales and profits.
Delayed deliveries can leave holes on store shelves. Sales of some $75 billion a year are lost because products are out of stock or unsalable for other reasons, according to the Food Marketing Institute, a trade organization. That is about 10% of annual grocery sales industry-wide at a time when sales growth is hard to come by. “It’s a massive opportunity from a financial and customer standpoint,” .....The country’s biggest grocers are leading the charge. Kroger is fining suppliers $500 for every order that is more than two days late to any of its 42 warehouses, and Wal-Mart Stores Inc. is charging suppliers monthly fines of 3% for deliveries that don’t arrive exactly on time, according to the retailers. They began issuing the fines in August........Wal-Mart has signaled it could do more than levy fines if problems persist. Charles Redfield, executive vice president of food for Wal-Mart U.S., told suppliers they could also lose shelf space if they don’t solve their delivery issues, according to people in attendance at a supplier meeting earlier this year. Retailers can threaten suppliers with loss of promotional space in stores, analysts said.....Packaged-goods companies are straining to keep up with the demands and remain in the good graces of retailers. They need GPS trackers and software to adjust routes in real time. Filling full orders fast is also challenging, since many manufacturers house items all over the country. That is particularly true for refrigerated items needing costly cold storage—which has fueled investments in more fulfillment centers......“Shipping complete orders on time is a completely reasonable request but turns out it’s harder than it sounds.”...
Wal-Mart  Kroger  grocery  supermarkets  supply_chains  retailers  delays  food  shipping  Amazon  cold_storage  penalties  delivery_times  fulfillment  CPG  Kraft_Heinz  P&G  on-time  shelf_space  supply_chain_squeeze 
november 2017 by jerryking
From Diaper to Soda Makers, Big Brands Feel the Pinch of a Consumer Pullback - WSJ
By Sharon Terlep, Jennifer Maloney and Annie Gasparro
April 26, 2017

Some blamed the weak start of the year on higher gas prices, bad weather and other external factors, while other executives pointed to shifting consumer tastes. Analysts say some big brands, such as Gillette and Yoplait, are losing ground to upstarts. Overall purchases of consumer packaged goods in the U.S. declined 2.5% in unit terms in the first quarter, according to Nielsen.....consumers are cutting back purchases, aggressively seeking deals and drawing down supplies at home. At the same time, he said, a growing affinity for beards has played a big part in driving down razor sales, which contributed to a 6% organic sales decline for P&G’s grooming unit....PepsiCo, like big food rivals Kraft Heinz Co. and Nestlé, is struggling as consumers shift away from diet sodas and processed foods to fresher and healthier options. It has launched new products, such as a premium bottled water brand, to adjust to the shift.....For food and nonfood staples, big brands are struggling more than the overall industry. The 20 largest consumer packaged goods companies last year had flat sales while smaller ones posted sales growth of 2.4%, according to Nielsen.

Wal-Mart Stores Inc., meantime, has been reducing inventories and slashing prices as it fights to compete with Amazon.com Inc. and European discounters moving into the U.S. Those cuts are eating into its own profit and, in turn, leading the world’s biggest retailer to put pressure on its vendors.........The dynamics are driving tough choices for companies as they are forced to decide between reducing prices and ceding market share. PepsiCo and Coca-Cola Co. have been shrinking packages and raising prices.
brands  hard_choices  large_companies  volatility  P&G  Gillette  Yoplait  CPG  PepsiCo  healthy_lifestyles  Kraft_Heinz  Nestlé  Wal-Mart  Coca-Cola  price-cutting  price_hikes  Fortune_500  upstarts  supply_chain_squeeze  shifting_tastes  Amazon  Big_Food 
april 2017 by jerryking
Inside the brutal transformation of Tim Hortons - The Globe and Mail
MARINA STRAUSS
THE GLOBE AND MAIL
LAST UPDATED: WEDNESDAY, FEB. 22, 2017

Since taking over the iconic chain in 2014, its new Brazilian owner, 3G Capital, has purged head office, slashed costs and squeezed suppliers. Shareholders are happy, but is 3G tearing the heart out of Timmy’s?.....3G is regarded as ultra-disciplined owners who are sticking to the same playbook they have followed at companies including Burger King, Anheuser-Busch, Kraft Foods and Heinz: massive layoffs, replacing legacy managers with hungry youngsters and, above all, a fanatical devotion to financial benchmarks and cost-cutting. (It remains to be seen whether this will also be the approach for RBI’s latest acquisition, Popeyes Louisiana Kitchen.)....Will 3G's analytics-driven overhaul of Tim Hortons—using the same template the private equity firm’s founders have deployed at railroads, brewers and food makers—succeed in the long run, or is it in danger of cutting the heart out of a Canadian icon? ......Suppliers are also feeling the squeeze. From the get-go, RBI made it clear it would be reviewing vendor relationships. And the company pushed for better terms, including extensions on bill payments to as much as 120 days from 30 days or less. Maple Leaf Foods, a major partner that supplied meat to Tim Hortons, declined to accept the new terms, and walked away....
Former employees also say RBI has cut back on product research and development spending at Tim Hortons, offloading some of that work to suppliers. That’s not uncommon in the fast-food world, but it can be risky. “Suppliers can do a great job with innovating and R&D, but you’re limited to what the supplier is trying to develop,” ......3G has never encountered a brand quite like Tim Hortons. It isn’t just another coffee company. It is a Canadian destination, an integral part of many Canadians’ day and a brand that defines us, to some degree, around the world.......“The risk, in looking at Tim Hortons through the lens of efficiency alone, is to miss the greatest value of the asset, and that is the Tim’s brand and its deep connection to the fabric of the country,” says Joe Jackman, founder of strategic retail consultant Jackman Reinvents, whose clients have included Old Navy, Hertz, Rexall and FreshCo. “You can’t cost-cut your way to retail nirvana.”
3G_Capital  Tim_Hortons  Marina_Strauss  cost-cutting  head_offices  iconic  brands  organizational_culture  private_equity  layoffs  data_driven  franchising  transformational  fast-food  supply_chains  R&D  Canadiana  goodwill  JWT  community_support  downsizing  efficiencies  coffee  staying_hungry  cultural_touchpoints  restructurings  supply_chain_squeeze  RBI  playbooks 
february 2017 by jerryking
South Korea’s chaebol problem - The Globe and Mail
IAIN MARLOW - ASIA-PACIFIC CORRESPONDENT
SEOUL — The Globe and Mail
Published Friday, Apr. 24 2015

Economic observers suggest the chaebol are now thriving to the detriment of other players in the economy – hoarding profits, increasingly focusing on overseas factories, squeezing domestic suppliers, and preventing the growth of small and medium-sized enterprises (SMEs) that employ nearly 90 per cent of South Korean workers. There are also ongoing concerns about crony capitalism and the massive firms’ close relationship with the government.
chaebols  South_Korea  conglomerates  problems  family-owned_businesses  cronyism  crony_capitalism  The_One_Percent  political_elites  corporatism  supply_chain_squeeze  SMEs 
april 2015 by jerryking
Private Equity Giants Use Size to Lean on Suppliers - NYTimes.com
July 11, 2012 | NYT |By KEVIN ROOSE.

Private equity firms like Blackstone are emerging as a powerful new force in the marketplace. The big investors, which collectively oversee thousands of companies, are using their size and scope to pressure suppliers, set their own prices and exert their influence in a range of industries, including health care, construction and consumer goods...with the financial crisis, the decline of stocks markets and the sputtering recovery, private equity has been adapting its ways. While profit remains central and layoffs can still be part of the private equity equation, buyout firms are now stuck holding on to companies longer than expected.

As a result, the firms cannot operate at arm’s length anymore and instead have had to roll up their sleeves and become full-fledged operators....Blackstone and others are taking the cues from the likes of General Electric. Decades ago, G.E. started buying in bulk for its various businesses units, including aerospace, energy, consumer and finance.

Despite the disparate industries spread across dozens of countries, G.E. decided to make buying decisions at the corporate level, as a way to save money and bolster profits. Today, most large multinational companies adhere to a similar strategy for their supply chain, buying computers, office supplies and all types of products at a discount.
private_equity  size  large_companies  KKR  procurement  purchase_decisions  grouping  purchasing  Carlyle_Group  multinationals  supply_chain_squeeze 
july 2012 by jerryking
FT.com / Companies / US & Canada - Wal-Mart presses suppliers on diversity
By Jonathan Birchall in New York

February 20 2007 22:05 | Last updated: February 20 2007

The initiative follows a drive by Wal-Mart’s legal department – which generates about $200m of business for outside firms annually – to pressure its outside counsel to give more prominence to women and ethnic minorities in key decision-making positions on its account.

The programme led the retailer to take away business from two law firms that failed to meet its objectives, and to stop giving new business to several others.

It also mirrors a similar push by Wal-Mart on environmental issues, as chief executive Lee Scott, seeks to remake the company’s corporate image.

Wal-Mart’s reputation on diversity continues to be overshadowed by a pending class action law suit filed in 2001 that accuses the company of systematically discriminating against its women workers. Wal-Mart rejects the charges made in the suit.
ethnic_communities  visible_minorities  Wal-Mart  supply_chains  diversity  Jonathan_Birchall  inhouse  systemic_discrimination  law_firms  supply_chain_squeeze  class_action_lawsuits  outside_counsel 
november 2011 by jerryking
The Importance of Frugal Engineering
May 25, 2010 | Strategy + Business | by Vikas Sehgal, Kevin
Dehoff, and Ganesh Panneer. Providing new goods and services to “bottom
of the pyramid” customers requires a radical rethinking of product
development. Frugal engineering is not simply low-cost engineering. It
is not a scheme to boost profit margins by squeezing the marrow out of
suppliers’ bones. It is not simply the latest take on the decades-long
focus on cost cutting.Cost discipline is an intrinsic part of the
process, but rather than simply cutting existing costs, frugal
engineering seeks to avoid needless costs in the first place. Frugal
engineering, addresses the billions of consumers at the bottom of the
pyramid who are quickly moving out of poverty in China, India, Brazil,
and other emerging nations.
innovation  C.K._Prahalad  Bottom_of_the_Pyramid  product_development  Tata  BRIC  low-cost  emerging_markets  trickle-up  reverse_innovation  jugaad  frugality  cost-cutting  supply_chain_squeeze 
august 2010 by jerryking
Macy's Clout Drives Supplier Consolidation - WSJ.com
MARCH 23, 2010 | Wall Street Journal | By RACHEL DODES.
Macy's Buying Clout Drives Supplier Consolidation. Shirt-Maker Van
Heusen's Bid for Tommy Hilfiger Expands Its Portfolio While Raising Its
Profile With Department Store.
Macy's  retailers  consolidation  supply_chains  supply_chain_squeeze  buying_power 
april 2010 by jerryking
No time like bankruptcy for squeezing competitors
July 13, 2009 |The Globe & Mail | George Stalk Jr.

In bankruptcy, your competitor's major issue is a shortage of cash - which is what led it into bankruptcy in the first place. Take advantage of it.

You can put pressure on that shortage by further straining your rival's ability to generate cash, or boost the cash it needs to run its business, forcing your competitor to yield market share, customers, product and service offerings. It is fight versus flight for the bankrupt competitor.

How to raise the cash ante? Consider some of the following tactics:

Introduce extended terms. Offer your competitors' customers longer payment terms. Your rival will either lose the business of customers that bite, or be forced to do the same, thus reducing its ability to generate much-needed cash.

Consignment pricing, where the customer pays only after the product is sold, is the ultimate extended term and will be difficult for a competitor in bankruptcy to match.

Boost marketing expenditures. Raising your advertising and point-of-sale spending will have a similar effect: Either your competitor will also have to spend more, or risk losing customers that you attract.

Lengthen the "tail" of the revenue stream. Add more after-sale services and spiffs - if your competitor has to do the same, it will raise the cash costs of getting and keeping customers.

Launch more products. New product development and introduction eats up a lot of cash - and a cash-short competitor is unlikely to be able to do the same. If you go all out, introducing many more new products than a bankrupt competitor possibly can, you could make your rival's offering obsolete in the minds of customers, forcing it into fire sales in a panic to raise cash.

Pursue your competitor's most profitable customers (perhaps identified via geofencing). Good management teams know where their company makes and doesn't make money. Great management teams know this about their competitors.

This insight can be used to target customers, geography, products and services of the bankrupt competitor to gain market share.

The competitor will be hesitant to counter your move against its most profitable customers because it needs the cash these customers generate. It will be more likely to maintain the status quo with these customers in the hopes the cash will keep coming.

Lawsuits. Now is the time to file the lawsuit you've always wanted to. Your bankrupt competitor will not have the discretionary resources to fight and will likely come to terms quickly.

There are also broader strategies to consider. Among them:

Sell against the competitor. When companies are in trouble, customers may worry that they won't be around to service products or provide future upgrades.

This fear can be a powerful weapon: These customers may be persuaded to take their business to companies on a sounder footing.

Go after the best talent (poaching). Anxiety about the plight of the competitor will be just as rampant among your rival's employees and suppliers as it is among customers. You can leverage that angst by going after top talent and strong suppliers - and offer terms and conditions that your competitor will have a tough time matching.

Force the sale of attractive assets held by your bankrupt competitor. A competitor in protection is not its own boss. The creditor committee is likely to care more for the cash it can get from an asset sale than who buys the assets.
bankruptcies  BCG  competition  competitive_advantage  consignment_pricing  geofencing  George_Stalk_Jr.  hardball  lawsuits  marketing  new_products  offensive_tactics  poaching  product_development  supply_chain_squeeze  tough-mindedness 
july 2009 by jerryking

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