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  • Getting Its Due - Food and Drink International
    not flying anymore Smart acquirers are following plans still driven by strategy and operations but tempered by horror stories of hurried deals gone bad Today s prep work seems simple and it is Here s one way to start Put the proper team in place Fortunately for a buyer in food and beverage M A pros are a relatively small group with deep expertise Team members will include attorneys CPA firm lenders familiar with the industry and possibly a PR firm among others Next think deeply about the integration plan even before the traditional process begins As uncounted merged companies will attest the deal making itself is the easy part Successfully blending operations back shop functions and management philosophies can consume a newly configured company Then have your accounting firm dig into the target s books There is no room for error in due diligence Diligence providers must assess key assumptions quantify risks and opportunities link the seller s story with actual results translate financials into critical issues maximize post acquisition results through structuring and enhance the post acquisition integration plan early Because companies are conducting more and better due diligence the process can take time For middle market companies expect three to five weeks from initial engagement to final report A large or complex deal can take longer Uncover Everything The diligence process explores the seller s revenues gross margins expenses leases labor and benefits corporate allocations working capital accounts receivable inventory fixed assets accounts payable accruals and to a lesser degree financial forecasts Financial due diligence is not valuation that s up to the buyer Accounting firms assess whether or not the seller s financial statements are accurate and representative of what the buyer believes they are getting Sellers particularly if they are smaller may not be up to date with generally accepted accounting principles Sarbanes Oxley guidelines and other rules In addition to simply getting the numbers right diligence can also uncover poor management practices and some items inadvertently overlooked i e opportunity for the buyer While assurance advisors do not set the strategy nor do they determine whether or not a deal closes they do offer comprehensive advice to help buyers make informed decisions CPAs confirm an accurate financial picture buyers most of which are seasoned and sophisticated apply the judgment Target companies sometimes push back on the diligence process They have businesses to run with limited management time for labor intensive probing But they also must realize that due diligence is necessary if they are serious about selling What Can the Seller Do Real sellers and not everyone really wants to sell are eager to sell They want to get to the table quickly get the dollars right and close cleanly But thorough due diligence will undoubtedly uncover issues important to the buyer Most small and mid market sellers have not been through the acquisition process before and likely are not aware of factors that determine a valuation Even sophisticated sellers seldom identify all of

    Original URL path: http://www.fooddrink-magazine.com/sections/columns/1282-getting-its-due (2016-04-27)
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  • Feeding Frenzy - Food and Drink International
    s foodservice division explains the recession has made it almost impossible for some independent restaurants to stay afloat Independents have been down by 3 percent in revenue this year that has been the case throughout the recession she notes Independents have not fared well during the recession Riggs says It s difficult for them to go up against the marketing powerhouses of the major chains But Riggs also notes there are things small operators can do to boost their sales without spending a lot of money The place for independents to start is online Many of them don t have a website but they should Riggs observes I just did a study on social media and the No 1 place that consumers go to find out about restaurants is the Internet Consumers first go to the restaurant s website to see what is new what is being offered and if there are any promotions Riggs suggests that Groupon type deals can be especially helpful for independent operators The key is to generate traffic have people try out the restaurant Riggs says Hopefully they will have a great experience and will keep coming back At the end of the day it s all about building customer loyalty Small res taurants are dependent on building loyalty and they can do that quite well Riggs says Those that do well in these difficult times are those that have been able to generate a loyal base through service that goes above and beyond and focuses on making guests feel comfortable and welcome In addition to giving their patrons plenty of TLC independent operators should stay on top of industry developments so they are better prepared to weather its inevitable up and down cycles The best thing independent op erators can do is to keep

    Original URL path: http://www.fooddrink-magazine.com/sections/columns/1281-feeding-frenzy (2016-04-27)
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  • Brazil Rising - Food and Drink International
    services and taking part in developing access to it ANVISA attempts to achieve its mission by assessing food standards food safety and contaminants ANVISA is connected to the MH but it is independently operated and is sometimes referred to as Brazil s counterpart of the FDA In addition within the Ministry of Environment MMA is an agency called The Brazilian Institute for the Environment and Natural Resources IBAMA IBAMA is involved with approval of pesticides and herbicides as are MH and MAPA to a degree Another key regulatory agency is the Ministry of Development Industry and Foreign Trade MDIC All food products imported or exported by Brazil must be registered at the Secretariat of Foreign Trade SECEX of MDIC This office oversees import and export tariffs and grants import and export licenses At the same time state and local regulation adds an overlay to federal regulation The food regulatory structure in Brazil is very complex and in some instances more than one agency has responsibility for a food item As a result U S companies exploring the expansion of food product lines into Brazil must give special attention to the complex federal state and local regulatory schemes Controlling Supply Chain Risk Food companies face challenges in controlling supply chain risk The increasing sophistication of many manufacturing facilities has begun to reduce risk from within but has done little to control the safety and quality risks of incoming components It was evident from the conference that global food companies use a combination of audits testing and product tracking to minimize supply chain risk One of the key challenges in a resource constrained environment is how to develop appropriate tools to focus resources in areas of greatest risk Importers and exporters both U S and Brazil based strongly desire supply chain risk ranking tools One approach discussed was the use of targeted assessments around inherent product risk e g a food that is grown in the soil and has no pathogen reduction steps versus a food that is thoroughly cooked and around supplier risk e g suppliers that have a robust food safety and quality culture along with the processes and record keeping to back that up versus those that do not At the conclusion of the conference it was evident that companies face similar challenges wherever they are located The need to have a deep understanding of regulatory structure and how to be compliant while critical is only part of today s challenges in an environment of increasing global complexity and supply chain risk Officials from both the United States and Brazil emphasized their mutual commitment to provide consumers in both countries with a safe food supply Generally this goal is achieved in both countries through a risk based food safety evaluation system supported by both governmental inspection and obligations of the food industry to evaluate risk areas in the food chain New Import Requirements Significant attention was given to the Food Safety Modernization Act s FSMA new import requirements which

    Original URL path: http://www.fooddrink-magazine.com/sections/columns/1280-brazil-rising (2016-04-27)
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  • Staying Power - Food and Drink International
    their homelike atmosphere multifaceted beverage options and knowledgeable baristas People like to go to coffeehouses they can bring their computer and do work visit with friends socialize explains Joseph F DeRupo director of external relations and communications for the National Coffee Association The coffeehouse offers a positive and constructive environment for patrons to interact Today Caribou and Starbucks can be found in almost every major metropolitan area in the world Although the 2008 global economic crisis presented some challenges for coffee retailers they continued to grow The Specialty Coffee Association of America reported in 2011 that retail coffee sales had increased by more than 5 billion in the previous decade In another study the National Coffee Association noted that last year daily coffee consumption soared by seven percentage points placing coffee solidly ahead of soft drinks In 2011 there were 20 000 coffee shop businesses in the United States with combined revenues of 10 billion according to First Research Seventy percent of sales were generated by the top 50 coffee shop operators including Starbucks Seattle s Best operated by Starbucks Caribou Coffee and Peet s Coffee With that fierce competition coffeehouses have had to re invent themselves to remain relevant to their customers Seasonal drinks such as pumpkin flavored coffees and teas or cold specialty brews are some of the items they serve to offer variety to their regulars and lure new customers Most cafes also have introduced food items beyond traditional coffeehouse fare such as pastries These include breakfast sandwiches oatmeal or salads for lunch Alfredo Martel senior vice president of marketing and product management for Caribou says the 500 store chain is always looking to offer our fans new experiences We re very focused on elevating the flavor profiles of our handcrafted beverages and also developing new food

    Original URL path: http://www.fooddrink-magazine.com/sections/columns/1279-staying-power (2016-04-27)
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  • Party Time - Food and Drink International
    James Beard Award winning Chef Michael White One of the new additions to the 2012 festival was its first ever collaboration with The International Culinary Center and a special schedule of events that took place at The International Culinary Center in SoHo The International Culinary Center began the festival with Head of Plate The International Culinary Center Creates Celebrated Dishes Cocktails a tasting and high tech cocktail reception on the center s fifth floor loft space in SoHo Throughout the festival weekend The International Culinary Center held a series of all star dinners including The Dinner to End All Dinners hosted by Nathan Myhrvold Tyler s Ultimate Dinner hosted by Tyler Florence and Opening The Slanted Door with Charles Phan In addition The International Culinary Center hosted an array of pairing seminars and master classes The New York City Wine Food Festival also showcased food in ways that were tied in to fun and fitness Returning in 2012 was the festival s featured family program Fun and Fit in the City presented by Target Hosted by Guy Fieri at Basketball City the event featured healthy food samplings fitness activities and cooking demonstrations with Sunny Anderson Melissa d Arabian Giada De Laurentiis and Andrew Zimmern Another aspect of the festival was highlighting ongoing trends in the food industry such as the food truck craze This year The New York Times and Save Me San Francisco Wine Co presented Trucks Train which was hosted by Andrew Zimmern The Grammy winning band Train appeared at Basketball City Pier 36 along with dozens of New York City s finest food trucks Now the New York City Wine Food Festival begins looking forward to the 2013 event on Oct 10 13 2013 In the meantime however Schrager and his team are firmly focused on the

    Original URL path: http://www.fooddrink-magazine.com/sections/columns/1278-party-time (2016-04-27)
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  • Do Your Homework! - Food and Drink International
    do business or the countries in which we would want to do business To that end we have secured support from various consultant groups that advise us on international strategy particularly economic and political evolution as well as our industry A large part of my information comes from those consulting groups and their publications and companies specializing in food and beverage data Another important element of keeping up with local markets is through conversations with our franchisees No one is more attuned to the local business and evolution of the local country than our local franchisee All this provides me a good idea on the best opportunity we have in the international markets FAD What is the biggest challenge you face JB Finding the right partner Over 50 percent of the success of a venture into a foreign market is based on the quality of the partner you find Quality partners are few and far in between however when you find them and the organizations get along it very often results in long term success In my opinion this is what really has created the success of T G I Friday s in the international market The quality of our franchisee their support of our business model and their belief in our brand has made all the difference in how successful T G I Friday s has been in the international market FAD What is the most exciting development in foodservice and where do you see it evolving JB In my opinion successful developments in the last 10 years have been in the Middle East There has been a desire on the part of the different franchise groups in the Middle East in the restaurant industry to develop quality establishments and to translate as closely as possible the essence of each brand they represent The result has been some of the best and most beautiful portfolios of brand developments that I have witnessed coming from countries in the Middle East There have also been other great evolutions in the international market One of the most promising markets in the world are Brazil Russia India and China known as the BRIC countries There is no doubt that what is happening in China has been absolutely monumental The way the market has grown the resources they have and the growth of middle class are all contributing to a fantastic opportunity The business model in China however is very challenging but the opportunity is certainly very large India is another country that experienced a similar trend in growth However the business model in India is a little more challenging since its infrastructure and ability to sustain development is still questionable Furthermore the growth of India s middle class has not been as impressive as in China Then Brazil I think has been just phenomenal The way they have reversed the conditions they experienced 10 years ago has been impressive and so has been their growth The business model in Brazil is probably much

    Original URL path: http://www.fooddrink-magazine.com/sections/columns/1277-do-your-homework (2016-04-27)
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  • Smart Marketing - Food and Drink International
    it can t be solved with just materials It starts with a feeling And it has been my experience more than just the McDonald s gig that the right feeling starts with the manager An energetic camp counselor type manager creates a fun restaurant that fires on all cylinders A worried serious manager often overlords a dull crew who makes the restaurant seem like Edward Hopper s Nighthawks at the Diner even during the day Sign of Life 2 The right mix of good ol and this just in New products are like painkillers after your back operation Thank God they re available but be careful you don t get addicted It s a skill having the discipline to develop a mix of Celebrating What Made You Great which is easy to lose sight of when you re constantly innovating and surprising people with products they didn t know they wanted I think of the guys in the pits at car races trying to get the combination of oxygen and gas just perfect It s hard I think Taco Bell is killing it right now though don t you I m thinking beyond the home run Locos Tacos Doritos thing which I think is the current Five Dollar Footlong You know every now and then how a restaurant has such huge success with something that everybody suddenly starts kicking themselves that they didn t think of it and suddenly every meeting is about Where s our Chic Fil A cows We need a Five Dollar Footlong promo or whatever Right now it s Locos Tacos Now they ve introduced this Cantina Bell menu to keep themselves from just wallowing in indulgent new products Let s be honest there s just something fun and funny about deciding to order a taco where what the hell the shell is just a big junk food snack chip In case you haven t been keeping up Taco Bell hired Lorena Garcia of Top Chef Masters and The Biggest Loser to come up with interesting entrees let s call them entrees that are sort of the opposite of gut fill Foodies might now reconsider the Bell Yet I still know that if I find 93 in the ashtray of my Ford Fiesta I m as welcomed as ever to come have refried beans smeared on a burrito shell Sign of Life 3 Not just doing what I assume you re going to do I ll be damned Look at me nominating Taco Bell for first place in this category too As of this writing they re also killing it here too Included in No 3 is advertising and marketing of course But take a look at your desk calendar wait you don t still have a desk calendar do you Uh oh and then ask yourself What do advertising and marketing even mean these days Taco Bell got huge Facebook Twitter and blogosphere props recently for snarking back at a snarky Old Spice tweet Old

    Original URL path: http://www.fooddrink-magazine.com/sections/columns/1220-smart-marketing (2016-04-27)
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  • Total Recall - Food and Drink International
    The Best Defense The public health implications of a recall are of course potentially serious So is the damage to a company s reputation Recalls can erode consumer confidence in the brand and can result in huge legal problems and devastating financial fallout Following the Class I recall of its products which tested positive for salmonella The Peanut Corporation of America filed for Chapter 7 bankruptcy in 2009 That s why the smartest companies know the value of implementing good manufacturing processes and traceability before a problem occurs Being able to document company compliance and show verification of suppliers is important and it can sometimes help sidestep a recall In 2010 that s what happened to at least one food company that used the flavor enhancer hydrolyzed vegetable protein HVP as an ingredient When its HVP supplier reported salmonella contamination to the FDA via the Reportable Food Registry many products from many companies had to be recalled although no illnesses linked to the contamination were ever reported This company was able to avoid the recall How It had clear documentation showing a validated kill step for salmonella in its manufacturing process Prepare for the Worst Despite the best efforts recalls can sometimes happen which is the reason that all companies need to prepare for the worst Companies that have written recall plans including clear chain of command for decision making and comm unications are able to respond more quickly and effectively Mock recall drills not only train teams to work together but also help identify any gaps in the recall plan The best prepared companies assign members and coordinators to communicate internally and externally to the FDA and other regulators as well as to customers and consumers These companies are also aware of the scope of their insurance coverage and are prepared to give notice to their insurers of a potential recall when appropriate It s also important to refresh the plan regularly and continue training the team especially if there is staff turnover in key leadership Communicate Strategically When a recall occurs it s important to conduct a timely and diligent investigation Given the 24 hour reporting requirement by the FDA it s likely that companies will need to act on incomplete and imperfect information For a Class I recall which involves a health hazard in which there is a reasonable probability that the food will cause health problems or death FDA strongly recommends direct to consumer communication to alert consum ers to rid their pantries of the affected products This generally means sending a press release to the Associated Press and other news organizations with large audiences Although such press releases are technically voluntary FDA may issue its own if a company does not The company will want to be straightforward in such communications stating the facts clearly and in a way that is not alarming These direct to consumer communications are in add ition to communications with a company s distributors wholesalers and re tailers which must

    Original URL path: http://www.fooddrink-magazine.com/sections/columns/1219-total-recall (2016-04-27)
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