At the same time an economic analyst from Goldman Sachs cut the outlook for packaged food on increased packaging costs, lethargic sales and rising grain and marketing costs.
The Illinois-based packaging company said the final stage of the two-year US$12m programme would see it update a selection of its extrusion, thermoforming, padding and packaging systems across four key facilities in a bid to meet “anticipated customer demand”. The equipment overhaul is expected to be completed early next year.
Pactiv, which posted sales of $3.4bn in 2009, said increasing consumer demand for convenience was driving growth for meat packaged in trays.
“As a proven primary supplier to many of our large food processor customers, this investment ensures that we will be able to continue to provide quality products and service,” said Peter Lazaredes, executive vice president and general manager for the company’s foodservice and food packaging division.
He added: “Food processors are responding to consumer preferences and we’re moving quickly to ensure continuous availability. Consumers prefer this type of meat packaging as the standard for freshness, quality, safety, and food flavor.”
Packaged food outlook
Meanwhile, Goldman Sachs analyst Judy Hong yesterday cut the rating on the packaged food sector from ‘neutral’ to cautious’, and downgraded Campbell Soup shares from ‘neutral’ to ‘sell'.
Hong said that key packaged food sectors such as cereal, soup and crackers were seeing fall in sales after a three year’s growth. Sales in the US were described as sluggish on weaker consumer confidence.
Big companies such as Kraft and General Mills were, however, highlighted as preferred ‘neutral-rated’ outfits. But Campbell Soup saw its rating cut after its sales fell almost five per cent last quarter.