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Kraft, General Mills and ConAgra: analysts’ tips on Pringles suitors

1 commentBy Oliver Nieburg , 14-Feb-2012

Kraft, General Mills and ConAgra: analysts’ tips on Pringles suitors

Kraft Foods is the likeliest candidate for Procter & Gamble’s Pringles brand after a deal with Diamond Foods looks lost, though other candidates may be lurking, according to analysts.

BakeryAndSnacks.com asked market analysts from Mintel and Euromonitor which firms were prime candidates for Pringles after Diamond Foods put its $1.5bn deal in jeopardy by removed its CEO and chief financial officer over improper accounting.

Kraft Foods proved the resounding favourite.

Kraft in pole position

Kraft – Mintel’s Marcia Mogelonsky and Euromonitor’s Ildikó Szalai and Jared Koerten saw Kraft as the perfect fit following its split into a Global Snacks and American Grocery division.

“The new snacks division could benefit from acquiring a large, established brand like Pringles. The company is certainly able to afford such an acquisition,” said Koerten.

Mogelonsky added that Kraft’s strong showing in 2011 puts it in a good position to make a deal on the scale the Pringles buy would demand.

Szalai said the buy could fill any potential geographical gaps the group may still have and would boost sales in smaller markets, such as South Korea, Taiwan or Vietnam.

Other big names

ConAgra – Mogelonsky touted ConAgra as the strongest North American suitor on the heels of losing out on Post cereals from Ralcorp.

General Mills – Koerten tipped General Mills to be among the three best-placed candidates, though the company was not mentioned in Mogelonsky and Szalai’s comments.

Frito-Lay/Pepsico – Both Koerten and Mogelonsky said that Frito Lay was out of the running due to potential competition concerns and the company’s poor performance over the last year.

Outsiders

Snyder’s Lance – Smaller candidate Snyder’s Lance could significantly boost its global presence with the Pringles brand, but a deal is perhaps not within its resources for now, according to Koerten and Mogelonsky.

Asian firms – “Don’t discount the potential of Asia,” said Mogelonsky. She listed a series of Asia firms, including China’s Bright Foods, Want-Want Holdings and Korea’s Orion Confectionery Company, that may consider a deal for Pringles.

Diamond Foods– All three analysts said that the Diamond deal was all but over. Szalai said that although the sale had not yet been terminated, the brand could eventually come up for sale again. Koerten even said it was not unreasonable to think that other companies would look to acquire parts of Diamond at this point.

The potential of Pringles

The market analysts said that while any deal for Pringles would be expensive, the potential for any snacks firm’s was great.

“Whoever buys Pringles has the potential for global expansion, especially promising in rapidly growing markets such as Brazil,” said Mogelonsky.

“Manufacturers that are willing to devote resources to promoting the brand and driving innovation for Pringles can establish it as a cornerstone of their product portfolio,” added Koerten.

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1 comment (Comments are now closed)

wake up

guys.. the kellog dseal went thru a few days ago.. whats with the analysis??

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Posted by auerbach
17 February 2012 | 15h26

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