Last Newsletter we have addressed
the effects of the recession on the fast food chains.
This time we will address the retail sector.
Before we talk about retail, one addition to last weeks
topic on the effects of the recession on fast food chains:
while in Europe and the US fast food chains benefit from the trading down trend,
this works the other way around in countries like China.
Since in China local
food may be less expensive than the food at (western style) restaurant
in China means people move away from (western style)
Trading down means also a benefit for retail, as people
change from eating out to eating at home. Several experts have
suggested the frozen food sector
may be in an ideal position
to benefit from this trend . And indeed some figures are
already available that support this trend. Although overall
food spending (retail + restaurant) in the US was down 3.7%
in Q4 2008,
spending in retail (separately from restaurants) for canned
and frozen foods was up 11%!
down" is also observed within the category of frozen potato
a shift from
high end specialties towards lower priced regular frozen french fries
has been reported. Since the two categories of products are not
necessarily produced by the same companies or even in the
same country, this trend leads to intriguing shifts: In
Europe for example, Belgium and Germany are said to benefit,
while the Netherlands (where there has been a focus on high
priced specialties) is on the losing end.
So if we compare what we see now to what happened in
Germany in 2001-2003, the case we took as example for what
might happen to frozen food in a recession, we see a
decrease in high end specialties which is the opposite of
what happened in Germany.
Also, there is a trend towards private label brands (now
16.6% of -food and non food- grocery sales in the US), with
consumers looking for value. Embarking on this trend, I
noticed the largest Canadian retailer advertised the savings
that can be made by buying all groceries from their private
Both trends may put some downwards pressure on prices of branded products.
These trends also suggest more pain for the (larger)
manufacturers focusing on higher margin products than for the
smaller manufacturers traditionally focusing on commodities
(=regular french fries).
In the US,
it was reported that
"the buildup of frozen potato stocks" was reason to "raise
the caution flag". I looked
into these figures a bit more in detail (see graph). You can
see an increasing trend in frozen potato stocks since the
end of 2006, but the changes in the last two months seem to
fit the general trend (a dip in the stock in December,
followed by a rise in January). Although there is a 65
million pounds increase going from December 2008 to January 2009,
this is the lowest rise in this period in the last three
year. This could of cause be the result of reduced
production. Still the overall buildup is cause for concern.
Developments in the potato supply may shed some further
light on this. Which will be the next topic in this series!
We have made some changes in the layout of the PotatoPro
newsletter, that should improve the look in most of the
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The PotatoPro site update is now 95% complete. Almost
Paul van Eijck
Updates to the Anuga Foodtec Newsletter Special
have made some more additions to the
Anuga Foodtec Special Edition of the PotatoPro Newsletter.
We added information for the companies
Heat and Control and
Dornow Food Technology. You can find the updated version
only online, we will not E-mail it to you again. We will continue
to update the online version of the Newsletter as we
receive more information.
Food Retail - Global Group of Eight (G8) Industry Guide
Datamonitor's Food Retail: Global Group of Eight (G8)
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includes easily comparable data on market value, volume,
segmentation and market share, plus full five year market
forecasts. It examines future problems, innovations and
potential growth areas within the market.
Food Retail - North America (NAFTA) Industry Guide
Datamonitor's Food Retail: North America (NAFTA) Industry
Guide is an essential resource for top-level data and
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North American Free Trade Agreement (United States, Canada,
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data on market value, volume, segmentation and market share,
plus full five year market forecasts. It examines future
problems, innovations and potential growth areas within the
Profiting from external knowledge
Innovation managers and innovation scholars increasingly emphasize the open innovation model, introduced by Henry Chesbrough in 2003. This model postulates that the innovation process should be flexible and cross organizational boundaries, which enables the transfer of knowledge and capabilities between organizations. However, until now, it remained unclear which types of firms apply open innovation, whether it really raises their performance, and how this can be managed in the best way. This book addresses the important issue how innovative firms profit from external knowledge to improve their innovation performance.
French Fries and Potato Specialties
Chips and Snacks
Dehydrated Potato Products
Other Potato Products
Ingredients for Potato Processing
Potato Supply Chain
Health and Nutrition
Energy and Environment
Binst Breeding and Selection NV
Binst is a Belgian Seed Potato supplier
Packo manufactures stainless steel pumps,
including stainless steel pumps to pump whole
Inbramaq is a manufacturer of snack processing
equipment located in Brazil.
Sibell is a French manufacturer of potato chips
Michael Foods Inc.
Michael Foods is a manufacturer of egg products
and refrigerated potato products. Michael Foods
uses the brand names "Crystal Farms Simply
Potatoes" and "Northern Star Co" for its
refrigerated potato products.