News briefs: Canada Bread, Campbell and Barilla

By Charlotte Eyre

- Last updated on GMT

Related tags Chief executive officer Baking

In financial news, Canada Bread keeps profits steady through frozen
bread sales, Campbell suffers from high input and commodity costs,
and Barilla may be looking to sell its German bakery division.

Frozen bakery sales support Canada Bread International bakery firm Canada Bread today said that strong sales of its frozen products helped keep company profits 'solid' despite the high price of flour and dairy products.

In a trading statement for the fourth quarter ending 31 December 2007, the company said that frozen bakery sales increased 21 per cent to $154.3m (€104.3m) compared to the same period one year earlier, boosting overall sales to by 11 per cent to $393m (€265.1m).

The UK bakery division also performed well, the company said, with profit increasing 111 per cent to $41.1m (€27.8m).

However, profit for the US Fresh bakery division fell five per cent to $239m (€198m) as high input costs and increased marketing spend had a negative impact during the quarter, the company said.

"Overall, we achieved solid results despite the continuation of unprecedented rises in prices for flour and dairy products," said president and chief executive officer Richard Lan.

According to Lan, the company stands in good stead for the rest of the year, as it is now one of the largest speciality bakers in the UK, and plans to be the national leader in Canadian pre-packed sandwiches following the acquisition of Aliments Martel earlier this year.

Commodity costs hit Campbell profits The Campbell Soup Company last week reported a 1.1 percentage point decrease in margins for the second quarter 2008, blaming 'unprecedented' commodity and energy costs.

Marketing spend for the period, ending 27 January also went up by a massive $300m (€202.8m), even though sales increased seven per cent to $2.2bn (€1.5bn).

However, president and chief executive officer Douglas Conant remained optimistic about the company's performance throughout 2008, promising to restore margins through a combination of price increases and product reformulations.

He also pledged to concentrate on three key business areas once the sale of the Godiva chocolate business is completed.

"Campbell will be an even more focused company and be better able to leverage our competitive advantages in our three strategic growth areas of simple meals, anchored by soup; baked snacks, anchored by biscuits; and healthful beverages, anchored by vegetable-based beverages," he said.

Conant called premium soups "an excellent growth area" and said he was encouraged by the company's initiatives in both Russia and China.

Barilla looks to offload Kamps bakery Italian-based bakery and pasta manufacturer Barilla is preparing to sell German bakery chain Kamps, the Financial Times Deutschland reported last week.

According to the newspaper, the company has enlisted the help of a German investment bank to complete the sale of the bakery, which it acquired in 2003 for €1.8bn.

Barilla is currently the third largest bakery company in Western Europe, with a 3.8 per cent of the market, according to Euromonitor.

The company still owns the largest selling bakery brand in Italy - Mulino Bianco, a range of baked good including bread, biscuits and pastries, and supplies over 1,400,000 tonnes of pasta and bakery products to retailers throughout the region each year.

Barilla was not immediately available for comment, however the Financial Times Deutschland quoted a company spokesman as saying he did not want to discuss the sale.

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