Fresh Produce Discussion Blog

Created by The Packer's National Editor Tom Karst

Tuesday, June 21, 2011

Ellmers Calls on Reid to Send Ag Bill to Senate Floor

Ellmers Calls on Reid to Send Ag Bill to Senate Floor
H.R. 872, Co-Sponsored by Ellmers, Eliminates a Costly and Duplicative
Permitting Requirement for the Application of Pesticides

WASHINGTON – Congresswoman Renee Ellmers released the following statement this afternoon following H.R. 872's advancement from the Senate Agriculture Committee:

"Today H.R. 872 Reducing Regulatory Burdens Act of 2011 advanced through the Senate Agriculture Committee. This bill, which I am proud to co-sponsor, will relieve unnecessary burdens being placed on our farmers by a misguided court order aimed at duplicating a pesticide requirement. Without action by the Senate, our farmers, state agencies, and everyday citizens will face greater hardship and economic loss when the requirement is implemented on October 31. I call on Senator Reid to allow this vital, bi-partisan legislation to be presented for a vote on the Senate floor as soon as possible."

Congresswoman Ellmers sits on the House Agriculture Committee and was a co-sponsor of H.R. 872, which passed the House on March 31st. The legislation eliminates a costly and duplicative permitting requirement for the application of pesticides. This misguided court order will be implemented on October 31. Without a legislative fix, the requirement would impose an economic burden to agricultural producers, foresters, public health agencies, the federal government, state agencies, and every day citizens

Agriculture Secretary Vilsack to Speak at Annual World Food Prize Laureate Announcement Today

Agriculture Secretary Vilsack to Speak at Annual World Food Prize Laureate Announcement Today

WASHINGTON, June 21, 2011—TODAY, Agriculture Secretary Tom Vilsack will speak at the annual World Food Prize Laureate Announcement at the State Department in Washington. The event is hosted by Secretary of State Hillary Rodham Clinton. Ambassador Kenneth Quinn, the president of the World Food Prize Foundation, will announce the winner of the 2011 World Food Prize during the ceremony. USAID Administrator Rajiv Shah and Under Secretary for Economic, Energy and Agricultural Affairs Robert Hormats will also speak at the event.

This year marks the 25th anniversary of the World Food Prize, which recognizes individuals who have advanced human development by improving the quality, quantity or availability of food in the world. The World Food Prize includes a cash award of $250,000 and a sculpture by world-renowned designer Saul Bass. Each year more than 4,000 institutions and organizations are invited to nominate candidates for the prize.

The award will be formally presented in a ceremony at the Iowa State Capitol in Des Moines, Iowa, on October 13, 2011 in conjunction with the Norman E. Borlaug International Symposium. In honor of World Food Prize founder Dr. Norman Borlaug, this year’s October events will also include the Grand Opening of the Norman E. Borlaug Hall of Laureates, an educational center and place to honor all those who have made strides in the fight against hunger.

Digital Transformation Creating Major Opportunities to Drive Growth for Consumer Packaged Goods Industry, Says New Grocery Manufacturers Association-PwC Report

Digital Transformation Creating Major Opportunities to Drive Growth for Consumer Packaged Goods Industry, Says New Grocery Manufacturers Association-PwC Report

CPG Companies Focused on Growth as Economic Recovery Accelerates

Washington, D.C. June 21, 2011 – Digital transformation is connecting billions of people worldwide, empowering consumers and enabling consumer packaged goods (CPG) companies to manage the enterprise more effectively and efficiently to drive growth, according to Thriving in a Connected World, the Grocery Manufacturers Association (GMA) and PwC US 2011 Food, Beverage, and Consumer Products financial performance report released today. Now in its 15th year, the report includes analyses based on public information from 148 companies in the food, beverage and consumer products sector.

Despite rising commodity costs, the CPG industry is now in recovery mode with companies focused on their growth agenda and looking to international expansion as an opportunity to enhance both the top and bottom lines, the report found. The value of shipments in the CPG industry rose 6 percent to almost $124 billion in 2010 versus the prior year. Across the board, financial performance generally improved over 2009, with the manufacturing sector achieving strong median one-year shareholder returns of 15 percent. In addition, median earnings before interest and taxes (EBIT) growth overall improved from 4.3 percent to 12.9 percent.

According to the report, major opportunities for CPG companies are being created with digital technologies.

“CPG companies of all sizes harnessed digital technologies in the past few years to become more productive and efficient,” said GMA President and CEO Pamela G. Bailey. “This study shows how food, beverage and consumer products manufacturers are leveraging innovation to optimize service to consumers and trading partners.”

Business mobility has been shown to boost productivity in sales, supply chains, distribution centers and stores, as well as to contribute to individual productivity. To determine the best use of mobile devices across the workforce, the report suggests that workforce productivity should be viewed through three lenses: mobility on the floor where workers use their digital devices for instant information, in the field where mobile employees can make decisions on the spot with their devices, and in flight where sales representatives, who historically travelled to each location to analyze performance, now use mobile technology to monitor activity, thereby increasing productivity. The report notes that as devices and wireless data networks grow, rich multimedia capabilities will continue to be added to business work flows and businesses will continue to capitalize on the opportunities mobile devices create within the workforce.

“Today’s consumers are more empowered with greater control of their shopping choices with the growing array of digital technologies like smart phones, tablets and social media. And they aren’t shy about posting their feelings online about products, where they literally are handing over reams of potential insights that can create a tremendous opportunity for CPG companies that can find the patterns in the noise,” said Susan McPartlin, PwC’s Retail and Consumer Industry Leader. “Just a few years ago, digital information meant one thing to senior executives – risk. However, companies are no longer just thinking ‘defense,’ they are using the digital data to advance their competitive position, help improve all aspects of operations and get smarter about international expansion plans.”

To this point, the report notes that currently, CPG companies lack detailed insights about consumers in China and other emerging markets. Many of the norms taken for granted in developed markets -- point-of-sale SKU numbers, predictable pricing models, even accurate information about how to reach a store or when it will be open -- cannot be assumed in emerging markets. According to the survey, connecting with consumers on their own digital terms will allow companies to learn how these markets work.

For the analysis, the GMA and PwC examined a variety of financial metrics to see which common characteristics link the CPG companies that performed best during the slow economic environment of 2010, and how those characteristics have changed during the past five years. The 148 CPG companies reviewed were sorted into performance quartiles and scored based on their relative performance across three metrics: economic profit spread, return on assets and free cash flow relative to sales.

Each group returned to growth in 2010 (2.9 percent for top performers and 1.5 percent for the bottom quartile), with the top quartile showing less volatility year-to-year and achieving more reliable sales growth over the long run. Most of the sales growth came organically and from acquisitions, with the strongest organic growth coming from emerging markets in Latin America and Asia. The report also found that top performing CPG companies are both generating and hoarding more cash than poorer performers – 18 percent cash flow to sales for the top performers versus 3.8 percent for the bottom quartile. Additionally, top performers paid out an average of four times more dividends per share during 2010 than the bottom performers.

Additional key findings from Thriving in a Connected World include:
• EBIT growth for the bottom quartile improved significantly from a negative 25 percent to negative one percent.
• Free cash flow as a percentage of net sales continues to remain generally strong across the industry, contributing to shareholder returns in the form of dividend payments.
• Underlying the strong overall performance was solid performance in margin improvement as well as liquidity management.
• Median selling, general, and administrative (SG&A) expense was nearly flat from the previous year.
• For the Household Products (HHP) sector, there was significant improvement in EBIT growth to 15.4 percent. This improvement took place in spite of a small reduction in median gross margin from 49.5 percent to 47.5 percent.
• The Food sector had a strong year; median sales per employee grew nearly 10 percent and the median cash conversion cycle fell from 50.9 days to 45.8 days. However, there were signs of a challenging environment versus other sectors.Net sales growth did not improve to the extent that it did for Beverage and HHP sectors as consumers continued to trade down in the sector on a regular basis.
• The Beverage sector continued overall strong performance with significant improvements in net sales growth, gross margin (43.1 percent to 47.1 percent), and SG&A expense (29.7 percent to 27.7 percent), which were able to offset a very poor year from a cash conversion perspective (rising from 38.0 days to 46.1 days).

“Our analysis found that CPG companies were hard pressed to generate overall sales growth in 2010; however, some companies still managed to produce very healthy margins, free cash flow and other financial results. They made good progress building their brands in those fast-emerging markets, and were able to balance long-term investment with smart cost management in ways that still generated substantial dividends for shareholders,” added Lisa Feigen Dugal, PwC’s North American Advisory Retail and Consumer Industry Leader.

“Yet CPG executives are guardedly optimistic, despite a fragile economy, high unemployment and volatile commodity prices. Companies should aggressively take these risks into account in their planning processes to better position themselves to take advantage of growth prospects that await them at home and abroad,” she noted.

Thriving in a Connected World will be presented via webcast by PwC and GMA on Wednesday, June 29 at 1:30 p.m. EDT (click here for registration information: www.meetpwc.com/2011PwCGMACompanyWebcast.

To download the complete report, visit:
www.gmaonline.org/file-manager/GMA_Publications/2011_financial_performance_report.pdf.

Register for Asiafruit Congress 2011

Register for Asiafruit Congress 2011 and network with our top speakers and headline sponsors!

Taking place on 7-9 September 2011 at Hong Kong’s Convention and Exhibition Centre, Asia’s leading fresh produce business event will offer delegates the chance to hear from the industry’s leading lights on the key trends and latest developments affecting the trade.

The latest speaker addition to the programme is Eric Eng, vice-president of global reefer trade for major shipping line APL (Singapore). Along with other leading players in global reefer logistics, Mr Eng will debate the latest developments for the sector in Asia, from the growth of intra-Asian trade to new technologies.

Besides top speakers, there is an impressive array of high-profile companies sponsoring this year’s event, including Pear Bureau Northwest, Zespri, Del Monte, IG International, California Table Grape Commission, Oneonta Starr Ranch, Lantao, Washington Apple Commission, Paramount Citrus, Fruit Patch, Chelan Fresh Marketing, Domex, NatureSeal, Yidu, CMI, The Fresh Connection, Cal-Ex Trading, Blue Whale and Kingstone.

Join these companies and network with some 500 fresh produce professionals at Asiafruit Congress ready to do business.

Register online and save over 20 per cent on your ASIAFRUIT CONGRESS ticket. ASIA FRUIT LOGISTICA exhibitors benefit from even further savings.

For all delegate, marketing and press queries, contact:

Hannah Gorvin
Commercial Manager
Asiafruit Congress
Hong Kong, 7-9 September 2011
Tel: +44 20 7501 3707
Fax: +44 20 7498 6472
Email: info@asiafruitcongress.com
Website: www.asiafruitcongress.com

Peterson Introduces Biodiesel Legislation

Peterson Introduces Biodiesel Legislation

WASHINGTON – U.S. House Agriculture Committee Ranking Member Collin C. Peterson, D-Minn., today joined Rep. Aaron Schock, R-Ill., to introduce the Biodiesel Tax Incentive Reform and Extension Act (H.R. 2238). The legislation extends the $1 per gallon biodiesel tax credit to 2014 and changes the tax incentive to a production excise tax credit.

“Increasing the production of renewable energy is vital to creating jobs and growing our rural economies. Unfortunately, by allowing the biodiesel tax credit to lapse, we’ve already witnessed a loss of jobs and production,” Peterson said. “The biodiesel industry is still developing and, with the certainty of the biodiesel tax credit, we can continue to move forward and fully realize our renewable energy potential.”
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Chairwoman Stabenow Announces Hearing to Examine State of Livestock in America

Chairwoman Stabenow Announces Hearing to Examine State of Livestock in America

Washington, DC – Michigan Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, announced the Committee will hold a hearing on Tuesday, June 28, 2011 at 2:45 p.m. in room G50 of the Dirksen Senate Office Building. The hearing will focus on challenges facing the American livestock industry, the tools needed to address those challenges and how we can continue spurring innovation and economic growth in the sector. Witnesses to be announced.

The hearing, “The State of Livestock in America,” will take place on Tuesday, June 28, 2011 at 2:45 p.m. EST in SD-G50. A live, streaming webcast of the hearing will be available for viewing on the Committee website at http://ag.senate.gov.