Ralcorp posts sales increase despite high costs
US-based Ralcorp holdings last week posted an increase in net sales of 24 per cent to $650.7m, 60 per cent of which the company attributed to the timing of recent acquisitions.
Ralcorp's most publicised acquisition occurred last November, when the company announced its acquisition of Kraft's Post Cereals. Other acquisitions include Bloomfield Bakers in the Cereals, Crackers & Cookies segment and Cottage Bakery in the Frozen Bakery Products division.
Sales in Ralcorp's cereals, crackers and cookies business jumped 39 per cent, or $78m, in the quarter, while its frozen bakery products grew $34m or 23 per cent.
Gross profit for the quarter only increased by 0.9 per cent for the quarter, however, hindered by increasing costs.
Ralcorp said its overall ingredient and packaging costs were unfavourable to the tune of about $25.7m during that period alone.
Trian muscles in on Wendy's
Active investment board Trian, led by Nelson Peltz, said yesterday it is attempting to gain control of the board of directors at fast food and snack chain Wendy's.
The group currently has a controlling stake in Wendy's of 9.8 per cent, or 8.6 million shares.
In a regulatory filing, the group said that the Wendy's company is aware of its intention to expand the executive board from 13 members to 15, and remove any directors appointed after the 4 February 2008.
If Wendy's shareholders approve the proposals, Trian plans to nominate its own candidates, giving the group a majority presence on the board.
Peltz and his investors have been particularly active in the bakery and confectionery markets in recent months, and have holdings in several global food companies, including Heinz and Kraft.
Most recently, the group increased its stake in Cadbury from 3.47 per cent to approximately 4.5 per cent in December, and called for Cadbury to make a raft of improvements to its operations, threatening to take matters out of management's hands if the requests are not met in the near future.
Security guard hired to protect butter
The commodities shortage is apparently sending bakers running for alarm systems, as one Australian pastry chef has upped the security for his increasingly valuable butter supply, Agence France Presse has reported.
According to AFP, Tracy Nicki started to panic when he realised his butter stockpile at a Sydney bakery had reached AUS $20,000.
Nicki has now employed a security guard and put in an alarm system, as "you don't have that kind of money sitting around without protecting it!"
Australia was one of the areas worst hit by the commodity price hikes, as not only does the area export to Asia, where demand is increasing at dramatic rates, farmers in the country suffered because of draught last summer.
Compared with costs in 2006, barley prices in August 2007 increased by 0.7 per cent, canola costs rose 7.3 per cent, sugar 0.7 per cent, beef 4.6 per cent and dairy 7.6 per cent, according statistics from the National Farmers Association.
