★Clémentine Murgier

Britvic, a UK-based soft-drinks supplier, has rejected two takeover bids from Carlsberg Group. Carlsberg's latest offer, sent on June 11, was around £3.2 billion ($3.9 billion) for Britvic, or 1,250 pence per share. Britvic stated that the second proposal undervalues the company and its future prospects. Carlsberg, one of the world's largest brewers, believes that a deal would allow them to capture long-term growth opportunities from Britvic's leading brands in the beverage market. Carlsberg's acquisition aligns with their growth strategy to expand beyond beer. Carlsberg markets its own soft drinks, while Britvic handles PepsiCo's beverages in the UK and Ireland. Carlsberg takes a disciplined approach to evaluating acquisitions and will only proceed with a transaction that is strategically and financially attractive. If an offer is made, it is likely to be in cash and fully debt financed. The second offer for Britvic represented an implied enterprise value multiple of over 13 times Britvic's adjusted EBITDA. It also marked a premium of 29% to Britvic's closing price prior to press speculation. Both parties have stated that there is no certainty another offer will be made. In the first half of fiscal year 2024, Britvic reported a 10.9% increase in revenue, a 15.3% increase in EBIT, and a 10.1% rise in profit after tax. The company's revenue primarily comes from its business in Great Britain, accounting for 68% of its revenue. Britvic also operates in other markets, such as France and Brazil. Carlsberg's business in the UK focuses on its Carlsberg Marston's Brewing Co. unit, which is a joint venture with Marston's, with Carlsberg owning a majority share. https://lnkd.in/esRCum6m

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Global beverage alcohol 🍷🍸🍺 market set for moderate recovery in 2025, while challenges persist in 2024 IWSR data shows that India, China and the US will be key value growth drivers, adding US$30bn in incremental value by 2028; brand owners will have to navigate an increasingly complex macroeconomic and regulatory landscape. Following declines in 2023 and continued challenges in 2024, global beverage alcohol is expected to begin its recovery in 2025, according to comprehensive new data and forecasts from IWSR, the global authority on beverage alcohol data and intelligence. For the first time in nearly 30 years, IWSR recorded a decline (-2% in 2023) in the volume of spirits sold in the key US market. Meanwhile, global total beverage alcohol (TBA) declined -1% by volume and rose +2% by value (US$, variable exchange rate) in 2023. Excluding national spirits such as baijiu and shochu, global volumes were down -1% and value increased by +3%. While some more positive signs are starting to emerge in 2024, the global TBA market remains subdued after several years of above-trend growth, with challenges expected to continue until 2025 as household spending rebalances after strong inflationary pressures of the past 2 years. TBA volumes are expected to edge up by only +0.4% this year. Growth opportunities 💡 ✨️ are in RTD formats, premix cocktails, premiumisation, zero alcohol and signs of a (slight) rebound for the beer 🍺 segment. For any alcohol beverages manufacturer or brandowner looking to create the next great tasting innovative 💡 alcohol or zero alcohol 🍸 beverage, please do get in touch the team at Kerry is here to help. #alcohol #beer #wine #spirts #rtd #zeroalcohol #taste Lars Jensen Paul Villis Carol Dunne Jean Noel Ortal Kristof König Jean-Philippe Delforge Linda Chatton David Deeley Brian Short Thomas Hahlin Ahlinder John Savage Sheelagh Pentony Virginia Traldi Nina Riggins Elizabeth Horvath Travis Ralph Chantal Drolet Marc LEJEUNE Farrah Gilsenan Michel Aubanel Gilles Halotel Bourcard Nesin Jim Watson Francois Sonneville Stephen Rannekleiv John Craven Bryan Roth

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PepsiCo Clears Path for Carlsberg's Potential Britvic Acquisition Carlsberg Group's pursuit of Britvic plc has gained new momentum as PepsiCo has agreed to waive a crucial change-of-control clause. This development removes a significant barrier to the Danish brewer's potential takeover of the British soft drinks company. Carlsberg's acquisition of Britvic, known for bottling and distributing PepsiCo brands in the UK and Ireland, could be back on track. Britvic recently rejected two takeover bids from Carlsberg, the latest valuing the company at £3.2 billion, or 1,250 pence per share—a 7.6% premium on Britvic's share price as of 21st June. Despite these rejections, Carlsberg has not abandoned its acquisition ambitions. In a statement issued on 24th June, Carlsberg confirmed that PepsiCo had agreed to waive the change-of-control clause in its bottling contracts with Britvic. This clause previously allowed PepsiCo to terminate its bottling agreement with Britvic if the company were acquired, making Britvic a less attractive acquisition target. “This waiver will come into effect should an acquisition of Britvic by Carlsberg, which has the recommendation of Britvic’s board, proceed to completion”, a Carlsberg spokesman said. Britvic, which bottles PepsiCo drinks under license in the UK, also owns popular brands such as Robinsons, R. White’s, and J2O. Carlsberg's spokesman also noted that "Carlsberg is considering its position. There can be no certainty that any offer will be made. A further announcement will be made as appropriate." Britvic's board remains confident in the company's future prospects, affirming that any new proposals will be assessed on their merits. PepsiCo's agreement to waive the change-of-control clause potentially smooths the path for Carlsberg, which has until 19th July to make a formal offer or walk away. Analysts suggest that this takeover could unlock significant synergies for Carlsberg, particularly in the UK market, where it remains subscale. Additionally, it would help diversify Carlsberg's portfolio beyond beer into other beverage categories like cider, hard seltzers, and ready-to-drink cocktails. Despite Britvic’s initial rejections, Carlsberg is reportedly considering a third bid. The ongoing speculation and takeover attempts have positively impacted Britvic's stock, which has surged by around 40% since the start of the year. Carlsberg's interest in Britvic aligns with its strategy to expand beyond traditional beer offerings, responding to shifting consumer preferences towards spirits and non-alcoholic beverages. With PepsiCo's bottling clause waived, Carlsberg's potential acquisition of Britvic could significantly shift the beverage industry landscape.

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Carlsberg Group: Q1 2024 results - fast start with a top-line beat despite a still challenging beer market in China Carlsberg Q1 FY24 results summary: • NR: $ 2.5bn (DKK 17.13bn) • OSG: +6.4%; Volume: 2%; Price/ mix: 4.4% Results by Region: • Western Europe: $1.1bn (DKK 7.6bn) net revenue; OSG: 5.1% (Volume: 0.2%; Price/Mix: 4.9%) • Asia: $0.8bn (DKK 5.8bn) net revenue; OSG: 7.6% (Volume: 3.1%; Price/Mix: 4.5%) • Central & Eastern Europe and India: $0.4bn (DKK 3.1bn) net revenue; OSG: 7.3% (Volume: 2.2%; Price/Mix: 5.1%) Results by Product Category: Volume growth • Total premium beer category: +8% • Alcohol-free brews +2% Share Buy-Back Program: The company announced a new quarterly share buy-back program, amounting to DKK 1.0 billion. Analyst Consensus: Beat analysts’ consensus for revenue FY24 guidance: • Unchanged • Organic operating profit growth of 1-5% #fmcg #cpg The HEINEKEN Company AB InBev Molson Coors Beverage Company Diageo Pernod Ricard The Coca-Cola Company Coca-Cola Europacific Partners PepsiCo https://lnkd.in/dWvhGVbx

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The HEINEKEN Company: a welcoming volume beat to start the year for this Q1 trading update but high uncertainty & corresponding wide guidance remain All regions posted higher volume and net revenue, and the quarter was helped by an earlier Easter and one-off effects. The firm disappointed investors in February with its wide range for forecast operating profit growth, which it said could be anywhere between a low and high single-digit percentage this year The wide guidance remains unchanged In the details: Heineken Q1 FY24 results summary: • NR: € 6,847 million • OSG: 9.4%; Volume: 4.3%; Price/ mix: 5.0% • Eb2b platform captured GMV of €2.7 billion (+17% vs previous year) Results by Region • Africa & Middle East: € 965million NR; OSG: 32.9% (Volume: 5.6%, Price/mix: 27.3%) • Americas: € 2565million NR; OSG: 6.5% (Volume: 4.6%, Price/mix: 1.9%) • Asia Pacific: € 1048million NR; OSG: 11.3% (Volume: 8.9%, Price/mix: 2.4%) • Europe: € 2,448million NR; OSG: 0.4% (Volume: 0.5%, Price/mix: -0.1%) • Beat analysts’ consensus for beer volume (4.3% vs 2.1% consensus) and miss for revenue FY24 guidance: Unchanged • OP%: expected to grow organically low- to high-single-digit Exciting year ahead for The HEINEKEN Company 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀/ 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://lnkd.in/ea4gy65y #cpg #fmcg AB InBev Carlsberg Group Molson Coors Beverage Company The Coca-Cola Company Coca-Cola Europacific Partners Diageo Pernod Ricard Coca-Cola HBC PepsiCo https://lnkd.in/ekcwUSF7

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The Boston Beer Company in talks to sell itself to Beam Suntory for $>3.5bn As predicted at the beginning of the year, we expect a progressive bounce-back of M&A transactions in the FMCG industry driven by mid-size transactions ($1-6bn EV) on same categories involving mostly US-based assets This transaction would make it the largest M&A transaction in the FMCG industry over the last 9 months. For perspective, FMCG M&A deal value in Q1 2024 were a meager $1.5bn More details in our latest FMCG M&A publications: 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀: 𝟮𝟬𝟮𝟯 𝗠&𝗔 𝗥𝗲𝗽𝗼𝗿𝘁 – 𝗦𝗲𝘃𝗲𝗻 𝗞𝗲𝘆 𝗟𝗲𝗮𝗿𝗻𝗶𝗻𝗴𝘀 & 𝗦𝗲𝘃𝗲𝗻 𝗣𝗿𝗲𝗱𝗶𝗰𝘁𝗶𝗼𝗻𝘀 𝗙𝗼𝗿 𝟮𝟬𝟮𝟰 https://lnkd.in/edKUDrEG 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀: 𝗠&𝗔 𝗤𝟭 𝟮𝟬𝟮𝟰 𝗜𝗻 𝗥𝗲𝘃𝗶𝗲𝘄 - 𝗔 𝗡𝗲𝘄 𝗕𝗼𝘁𝘁𝗼𝗺 & 𝗙𝗼𝘂𝗿 𝗥𝗲𝗶𝗻𝗳𝗼𝗿𝗰𝗶𝗻𝗴 𝗧𝗿𝗲𝗻𝗱𝘀 https://lnkd.in/eER9wNWY 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀 & 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://lnkd.in/ea4gy65y #CPG #FMCG The Coca-Cola Company Nestlé Procter & Gamble PepsiCo Unilever Mondelēz International AB InBev The HEINEKEN Company Carlsberg Group Molson Coors Beverage Company Asahi Beverages Pernod Ricard Diageo Campari Group Keurig Dr Pepper Inc. Danone https://lnkd.in/eNiEB5pj

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Well said Nikhil. If I may go a little further, private label brands are not necessarily imitators. Many are developed independently by retailers specifically for their own stores. They often offer quality comparable to, or often exceeding, that of national brands, and score higher on ESG metrics at a more competitive price point. These are the fundamentals underpinning PL’s growth. Their ability to customise to retailer needs, optimised retail media use and, where available, data-led shopper insights to precision target is what differentiates them from brands and, when managed well, deliver Ebitda levels at brand level.

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Pernod Ricard: another top-line miss with highly contrasted results across its key regions Details below: Pernod Ricard Q1 FY24 results summary: • NR: €2,347m • OSG: 0%; Volume: +1%; Price/ mix: -1% Results by Regions: • Americas: € 714m net sales; OSG -7%  USA: -11% OSG • Europe: € 617m net sales; OSG -6% • Asia-RoW: € 1016m net sales; OSG 8%  India: +8% OSG  China: -12% OSG By Brands:  Strategic International Brands: +1% OSG  Strategic Local Brands: +5% OSG  Specialty Brands: -7% OSG  Strategic Wines: -9% OSG, mainly driven by declines in USA and UK Analyst Consensus: Missed revenue consensus FY24 guidance: Reaffirms • Top-line growth of +4% to +7% and Organic Operating Leverage of +50/+60 bps Interesting quarters ahead for PR 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀/ 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://lnkd.in/ea4gy65y #cpg #fmcg Diageo The Coca-Cola Company Campari Group The HEINEKEN Company AB InBev Molson Coors Beverage Company Nestlé Procter & Gamble https://lnkd.in/erGgByVT https://lnkd.in/e_FeBNSm

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Our annual Britvic plc Soft Drinks Review was released yesterday, and as a category it’s always so interesting to see the changing consumer behaviours that shape our brands. Our report found that: ·       Category sales in grocery and convenience stores have grown, demonstrating the dedication and ingenuity of manufacturers and retailers as well as the wide range of roles soft drinks are playing in people's lives. We have witnessed the soft drink category expand rapidly at forecourts, where sales have grown by 9.9% on volumes up 1.6%.  ·       There is a rise in people using forecourts for a wider range of purposes, like top-up shopping and on-the-go treats. All this presents significant opportunities for soft drinks, the channel’s bestselling food and drink category.  ·       Retailers increasingly recognise that the soft drinks they stock help determine people’s choice of store. As such, Britvic is a trusted manufacturer that aims to support retailers in meeting those needs, with launches of various flavours through our rotational Tango Editions series, offering various formats, and health-conscious options to help retailers offer their customers everything they need.  You can read more about how the category is continuing to accelerate on our website:  https://lnkd.in/eBaTNyPT

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Another top-line miss for Nestlé although 2024 guidance remains unchanged Sequential improvements expected on the back of a lot of one-offs (frozen, NHS...) & innovations/ marketing spend acceleration on billionaire brands in the back of the year Historic growth drivers have now significantly decelerated (mostly US, Pet, Coffee) while challenges have remained (NHS, Food) Will the innovations/ marketing spend acceleration on billionaire brands coupled with better execution be enough to fully put Nestle on the mid-single digit growth path? Answers in the next quarters Full details below: Nestle Q1 FY24 results summary • NR: CHF 22.1bn • OSG (organic sales growth): 1.4%; Volume: -2%; Price/ mix: 3.4% • Volume impacted by soft consumer demand, particularly in North America, and the temporary supply constraints for vitamins, minerals and supplements • By product category: Purina PetCare was the largest contributor to OSG, fueled by continued momentum for science-based premium brands, Purina ONE, Fancy Feast and Friskies Result by zones: • North America: CHF 5.8bn net sales; OSG -2.5% (Volume: -5.8%, Price mix: 3.3%) • Europe: CHF 4.6bn net sales; OSG: 4.4% (Volume: -0.2%, Price mix: 4.6%) • Asia, Oceania and Africa: CHF 4.2bn net sales; OSG: 3.6% (Volume: -0.4%, Price mix: 4.1%) • LATAM: CHF 3.1bn net sales; OSG: 3.1% (Volume: -0.8%, Price mix: 3.9%) • Greater China: CHF 1.2bn net sales; OSG: 3.7% (Volume: 2.1%, Price mix: 1.5%) • Nestle Health Science: CHF 1.5bn net sales; OSG: -1.8% (Volume: -3.6%, Price mix: 1.9%) • Nespresso: CHF 1.5bn net sales; OSG: -1.8% (Volume: -3.6%, Price mix: 1.9%) Results by division: • Powdered and Liquid Beverage: CHF 5.8bn net sales; OSG 1.6% (Volume: -1.4%, Price mix: 3.0%) • Water: CHF 0.7bn net sales; OSG 4.3% (Volume: -1.6%, Price mix: 5.9%) • Milk Products & Ice-Cream: CHF 2.6bn net sales; OSG -0.6% (Volume: -2.3%, Price mix: 1.7%) • Nutrition & Health Science: CHF 3.7bn net sales; OSG 0.7% (Volume: -2.5%, Price mix: 3.2%) • Prepared dishes & cooking aids: CHF 2.6bn net sales; OSG -4.2% (Volume: -6.5%, Price mix: 2.3%) • Confectionary: CHF 2.0bn net sales; OSG 6.3% (Volume: 0.4%, Price mix: 5.9%) • PetCare: CHF 4.6bn net sales; OSG 4.3% (Volume: -0.4%, Price mix: 4.7%) Analyst Consensus: Missed analysts’ consensus for OSG FY24 guidance: Confirmed • OSG: ~4% • Underlying operating profit: Moderate increase • Underlying EPS: Increase between 6-10% Interesting quarters ahead for Nestlé 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀/ 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://lnkd.in/ea4gy65y #cpg #fmcg The Coca-Cola Company AB InBev PepsiCo Procter & Gamble L'Oréal Danone Mars Unilever Lactalis Group Mondelēz International Kraft Heinz Reckitt Abbott https://lnkd.in/dPYBz66x

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Improverished consumers and what does it mean for #FMCG players? Personal savings rate hitting the all time low, while at the same time credit card debt is near all time high signals that consumers are poor and may be nearing their limits with unprecedented cost of living and assets inflation far outpacing their income growth (excl. top decile) Most of the FMCG players rely on a strong middle class, and the purchasing power of the bottom 90% of the consumers across the major economies got visibly poorer, as the vast majority of newly 'created' (printed) wealth got accumulated by the very rich (>66% of all the wealth 'printed' since 2020 ended up with the top 1%) that are unlikely to drastically increase their spend on CPG (how much more shampoo can Jeff Bezos buy?) If so far the price elasticity was low (low to no volume decline) it was driven by several forces that may well be about to expire, as many metrics are hitting the respective lows/ highs not seen since 2008/09 downturn Maintaining the pre-pandemics consumption will result tricky for many consumers. As such, we may expect strong demand for the entry level and luxury segments, while the mid-tier will face drop in demand (most of consumer goods are not really discretionary, so some mid-tier consumer will switch to Private Labels/ value brands, and 'the rich' got even wealthier so they will not trade down from luxury) The upcoming quarters will bring some important decisions for many Brands willing to defend/ expand their positions, and/ or adjust according to shifting demand Know more about our perspective on how to accelerate organic volume growth create incremental category value read our last publication on Zero Based Growth: https://lnkd.in/eG62xkNE To receive the corresponding deck, pl. leave your name in comment 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀/ 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://lnkd.in/ea4gy65y #strategy Frederic Fernandez & Associates Source: tradingeconomics

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General Mills acquires premium petfood digital native brand Edgard & Cooper | B Corp It is a deal worth to mention in a challenging context for M&A in the FMCG industry (2023 was an all-time low in deal value, Q1 2024 was even lower - article to follow over the week-end) The natural pet food group booked €100m in retail sales in over half of its European markets last year Founded in 2016, Edgard & Cooper’s produces a range of meat, fish and plant-based cat and dog food, snacks and dental care treats, all said to be made with fresh, natural ingredients The business sells to 23 countries in Europe besides Belgium through specialty retailers and online. These include the Netherlands, France, the UK, Italy, Spain, Hungary and Sweden, among others Second acquisition then for GenMills on Pet Care after the Blue Buffalo success in the USA back in 2018 If the above deal makes sense, GenMills will have to address the following challenge: - Leverage its European retail presence to scale Edgard & Cooper in a context it has limited to no pet food presence in Europe. So will its overall GTM scale be transferable on a local white space (Pet Food Europe)? - The brand revenue footprint (& then likely its brand awareness) is extremely scattered across many European markets that will not make it easy to scale rapidly Definitely one to watch in the coming quarters/ years Exciting times To read our latest publications on M&A in the FMCG industry: FMCG CEOs: 2023 M&A Report – Seven Key Learnings & Seven Predictions For 2024 - https://lnkd.in/dKYkKQuH FMCG CEOs: 2012-22 M&A Winners & Losers Or Breaking The Code Of Successful M&A In The FMCG Industry - https://lnkd.in/dDzAf3Pj 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀/ 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿 - FMCG CEOs: Managing For Growth: https://lnkd.in/ea4gy65y https://lnkd.in/djRubqaP #cpg #fmcg #petfood #petcare Nestlé Mars Colgate-Palmolive Food Family Agrolimen

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Divesture value continues to exceed acquisitions value for the world largest FMCG companies. It was true in 2023. It was also true in Q1 2024 And it will likely continue to be true for the next quarters considering recent announcements (Unilever Ice Cream) & on-going rumors (Kraft Heinz & Oscar Mayer...) Few reasons for this: 1) Pressure is on to get back to mid-term guidance on top-line which is often hard in a post price increase context (>50% of the top 50 listed FMCG companies missed their topline guidance in Q4 2023) while recovering pre-COVID profitability (at end 2023 >70% failed to do so) 2) Divesture is often the fastest/ most effective way to improve both organic growth & profitability footprint especially when companies have a large business with much lower growth, much lower profitability & that comes with limited di-synergies in case of carve-out 3) If leverage level for the top 50 FMCG companies is on average at an acceptable level (x2.7 at end 2023 vs. the generally accepted x3 level), some FMCG companies exceeds the threshold (AB InBev Kraft Heinz Nestlé Mondelēz International General Mills Danone The HEINEKEN Company Asahi Beverages Coca-Cola Europacific Partners...) 4) At a time top-line growth is becoming tougher, shares buy-backs are increasingly leveraged to drive EPS growth. So the proceeds of divesture can really help there especially for the companies with the most constrained B/S 5) Finally, high ROI M&A remain scarce because of the rarity of quality (mid-size, same categories than acquirer's, strong growth track record, complementary to acquirer's portfolio, scalable growth model that could benefit from GTM synergies) & well-priced assets PE funds & public markets (thru IPOs) will be most often the exit scenarii for those divesture. If large FMCG carve-out assets can sometimes deliver better results under (partial) private ownership (cf. Froneri), not all end up being a success. So caution prevails Exciting times ahead on divesture and M&A front in the FMCG industry in 2024 To read our full perspective: FMCG CEOs: M&A Q1 2024 In Review - A New Bottom & Four Reinforcing Trends 𝗟𝗶𝗻𝗸 𝘁𝗼 𝘁𝗵𝗲 𝗳𝘂𝗹𝗹 𝗽𝘂𝗯𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻: https://lnkd.in/efD5RNWX 𝗧𝗼 𝗴𝗲𝘁 𝘁𝗵𝗲 𝗰𝗼𝗿𝗿𝗲𝘀𝗽𝗼𝗻𝗱𝗶𝗻𝗴 𝗱𝗲𝗰𝗸, 𝗽𝗹 𝗹𝗲𝗮𝘃𝗲 𝘆𝗼𝘂𝗿 𝗻𝗮𝗺𝗲 𝗶𝗻 𝗰𝗼𝗺𝗺𝗲𝗻𝘁 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀/ 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://lnkd.in/ea4gy65y #cpg #fmcg Nestlé AB InBev Procter & Gamble PepsiCo The Coca-Cola Company Unilever Mondelēz International Kraft Heinz L'Oréal Church & Dwight Co., Inc. Kellogg Company General Mills Blue Buffalo cerave Monster Energy Native RXBAR Danone The HEINEKEN Company Pernod Ricard Henkel Coty The Estée Lauder Companies Inc. Beiersdorf Bel William Grant & Sons Campari Group Diageo Mars

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#FMCG companies aim to divest their way to growth Divesture value has been exceeding acquisitions value for the world largest #CPG players since 2023, and it is likely to continue considering recent announcements (Unilever Ice Cream) & on-going rumors (Kraft Heinz & Oscar Mayer...) Few reasons for this: 1) Pressure is on to get back to mid-term guidance on top-line which is often hard in a post price increase context (>50% of the top 50 listed FMCG companies missed their topline guidance in Q4 2023) while recovering pre-COVID profitability (at end 2023 >70% failed to do so) 2) Divesture is often the fastest/ easiest way to improve organic growth & profitability footprint especially when companies have a large business with much lower growth, much lower profitability & that comes with limited di-synergies in case of carve-out 3) If leverage level for the top 50 FMCG companies is on average at an acceptable level (x2.7 at end 2023 vs. the generally accepted x3 level), some FMCG companies exceeds the threshold (AB InBev, Kraft Heinz, Nestlé, Mondelēz, General Mills, Danone, HEINEKEN, Asahi, CCEP...) 4) At a time top-line growth is becoming tougher, shares buy-backs are increasingly leveraged to drive EPS growth. So the proceeds of divesture can really help there especially for the companies with the most constrained B/S 5) Finally, high ROI M&A remain scarce because of the rarity of quality (mid-size, same categories than acquirer's, strong growth track record, complementary to acquirer's portfolio, scalable growth model that could benefit from GTM synergies) & well-priced assets PE funds & public markets (thru IPOs) will be most often the exit scenarios for those divestures. If large FMCG carve-out assets can sometimes deliver better results under (partial) private ownership (cf. Froneri), not all end up being a success. So caution prevails Exciting times ahead on divesture and M&A front in the FMCG industry in 2024 To read our full perspective: FMCG CEOs: M&A Q1 2024 In Review - A New Bottom & Four Reinforcing Trends 𝗟𝗶𝗻𝗸 𝘁𝗼 𝘁𝗵𝗲 𝗳𝘂𝗹𝗹 𝗽𝘂𝗯𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻: https://lnkd.in/efD5RNWX 𝗧𝗼 𝗴𝗲𝘁 𝘁𝗵𝗲 𝗰𝗼𝗿𝗿𝗲𝘀𝗽𝗼𝗻𝗱𝗶𝗻𝗴 𝗱𝗲𝗰𝗸, 𝗽𝗹 𝗹𝗲𝗮𝘃𝗲 𝘆𝗼𝘂𝗿 𝗻𝗮𝗺𝗲 𝗶𝗻 𝗰𝗼𝗺𝗺𝗲𝗻𝘁 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀/ 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://lnkd.in/ea4gy65y #strategy #mergersandacquisitions Frederic Fernandez & Associates

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It's great to see The HEINEKEN Company, the renowned brewer, celebrate a significant achievement as it reports its first quarterly increase in sales volumes after a challenging period of decreased demand in 2023, attributed in part to higher commodity and raw material prices. This positive sales momentum signals a promising result for the company. However, it's important for any company, whether in the #brewing sector or beyond, to consider the risks of relying solely on sales growth, especially in fluctuating market conditions. Understanding and forecasting the impact of high costs on raw materials and production expenses is paramount. Enter the crucial role of Cost Model Forecasts. Tailored to the unique specifications of a company's branded or private label products, these forecasts empower procurement and buying teams to effectively manage costs and margins. Moreover, #Equity Analysts benefit greatly from utilizing these tools to monitor the influence of changing costs on company performance and quarterly earnings. This analytical insight enables them to identify opportunities within dynamic markets. In essence, while robust sales results provide a commendable boost, the strategic integration of cost management and forecasting tools is indispensable for sustaining profitability and navigating market fluctuations effectively. https://lnkd.in/eGZCTkz3 Mandeep Singh Mark Iantosca Sarah Garcia Stewart Jones Jay Inamdar Mintec Urner Barry Jon W. Hansen

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The discounters hitting a record combined share of 18%, and #lidl's sales growth percentage being over 3 times that of #aldi's are the highlights from Worldpanel by Kantar's UK market data for 12 weeks ending 14th April released earlier this week.   12-wk sales grew by 4.3%, similar to the last 12-wk period figure of 4.2%. Across this period, grocery #inflation was at 4.1%. This is the first time since June 2021 that the 12-wk sales percentage has exceeded the 12-wk inflation percentage, suggesting a recovery of volumes across the market. In the last 4 weeks, the inflation figure was just 3.2%.   Coincidentally, June 2021 was the last time that spend on promotion was at the level it has now risen to (29.3%), suggesting that the level of promotions is clearly linked to delivering volume growth in the market. The percentage of products on promotion differs across #brands (37.5% on promo) and #privatelabel (23.0% on promo) – both are growing at a similar rate.   #tesco continue to perform ahead of the market, growing share by 0.4% pts YoY. Having recently announced a 12.8% growth in annual operating profit, the combination of Aldi Price Match, Clubcard prices, and Everyday Low Prices is clearly working. Their share gap to the discounters combined has grown by 0.1% pt for the second period in a row. Impressive growth in their premium-tier private label range “Finest” as well – up over 15% YoY and now worth over £2bn per year.   #sainsbury's are the fastest growing of the big 4 supermarkets for the 7th period in a row with sales up 6.8%. Their recent introduction of the “Low Everyday Prices” campaign, to replace “Price Lock”, sees them totally replicating Tesco’s 3-pronged attack to stem the growth of the discounters.   This seems to be working – at least against Aldi, whose growth this period at 2.8% is the third lowest across the top 10 retailers. Tough YoY comparisons will be a factor in this (in April 2023 Aldi’s growth was 25%), but I do fear Aldi’s clear proposition is not so clear at the moment – with many branded products cluttering the store and a visible loss of the middle aisle general merchandise excitement.   On the other hand, visits to Lidl’s stores see continuing strong special buy themes, impressive country food themes, and (unique compared to Aldi) heavy promotion of the Lidl Plus app and enticing front-of-store bakery, now even featuring Lidl Deluxe product offerings.   #morrisons have maintained their YoY share for the first time since the middle of 2021. Their recently introduced Aldi & Lidl Price Match may have had a positive impact with their customers, along with a clear improvement in product availability. #asda continue to struggle however, with share loss of 0.6% pts YoY.   Online sales now account for 12% of the UK market, the highest share since July 2022. Ocado’s growth of 12.5% is market leading, whilst Tesco recently stated their online channel now accounts for 13% of their overall sales.

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The news this week that Carlsberg Group made a bid to buy Britvic plc showed how much category blurring in beverages, is driving total business growth strategy and also M&A activity. I wrote an article in Checkout Magazine on this very topic in 2023: Beverages 2.0 - The Total Beverages Company Beverages companies are looking to align their strategies to market trends and consumer needs and long-term shifts in consumer demographics and consumption patterns necessitate a continual reevaluation of current strategies, this most apparent in the soft drinks category and also in the alcohol category – as alcohol moderation gathers pace. A company's beverages portfolio mix needs to reflect the changing consumer, with an increasing share of low- and no-calorie products and added functionality and address the longer-term growth of great tasting of low and no alcohol premium offerings. High-calorie brands are losing space to water and water-based beverages and functional drinks. An aging population will continue to drive change in the portfolio mix towards healthy aging, such as zero alcohol along with low-calorie and added-functionality beverages, while a younger population want healthier choices that taste great and are environmentally and sustainably orientated. The pathway for long terms success and growth is to offer a wide portfolio of beverages for different consumer need states and occasions (both alcoholic and non-alcoholic) creating a total beverages company, with this impacting not just product development and innovation, but brand positioning and route to market to their get their products in to the hands of the final consumer… proving that Beverages is indeed an exciting and dynamic category. #beverages #alcohol #softdrinks #carlsberg #britvic #categoryblurring #strategy #growth #innovation Lars Jensen Paul Villis Carol Dunne Jean-Philippe Delforge Sheelagh Pentony Thomas Hahlin Ahlinder Erlon Pereira Jerry O'Keeffe Alison Wilkinson Ian Chesworth David Deeley Brian Short Bourcard Nesin Jim Watson Francois Sonneville Gilles Halotel Marc LEJEUNE Farrah Gilsenan John Craven Maev Martin John Savage Stephen Rannekleiv Mark Gallo Kristof König Linda Chatton Michel Aubanel Jean Noel Ortal Gwyneth Kelly Sergio Saavedra Rodríguez Birgit Schaaf Barbara Lezzer Magdalena Edyta Przewoźnik Aoife Mc Donald Breda Kelly Erika Minaguchi Mark Allen David Walsh

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Great fact from Roger after attending the British Brands group presentation. Of 18,167 new CPG products launched in the UK from 2019 – 2021, only 375 (2%) were deemed by analysts to be “distinctive”. Retailers need to get behind the 2% that make a genuine difference to category growth in an equally disproportionate way. I remember when at P&G running a study with Tesco showing them the above fair share category gains they got when they went first, big and loud on genuine “New” rather than me too or flavour launches. In the same way I designed the first test of Corporate “New” signage with Sainsbury and proved huge growth when they highlighted new in a recognisable way with a reason to believe. We then rolled this out to other UK retailers to get the same fast uplift for New products but also as a protection against limited line discounters who in many categories are not good at New and only stock already proven lines 18 months+ after launch. This corporate presentation of New by retailers is still better in the UK than most other countries. Driving and enhancing “New” in retailers has a three way win- shoppers like the excitement in a mundane shop, retailers make more margin( new isn’t listed without above category average margin) and the manufacturers like P&G who have a history of genuine category changing new products are rewarded and encouraged to continue to invest in the next category growth idea. https://lnkd.in/dqCUcTE8 #shopper #shoppermarketing #ProcterandGamble #shopperinsights #marketing #retail #new

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