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Food Industry Divestitures Post Sharp Gain in 1998.

Marking an 11% gain over 1997, divestitures among food and food-related firms reached a record high total of 813 during 1998, reports the Food Institute. "That's the seventh consecutive yearly increase in this latest wave of merger and acquisition activity," commented Brian Todd, Senior Vice President of the 70-year old trade association that tracks M&A activity among these firms.

The previous wave began in the mid-1980's and peaked in 1986, with 724 transactions. That record held until 1997 when 734 transactions were recorded.

Food processing firms accounted for the largest portion -- a record-high 230 transactions -- 44 more deals than in 1997. Within this category, diversified food processors were responsible for most of the activity, with 140 transactions.

Restaurants were the second-most active food industry group, accounting for 140 transactions, 13 more than in 1997. Much of this activity consisted of the "gobbling up" of smaller chains by larger ones as the latter looked to expand into new regions or through new concepts.

The most-widely publicized category, however, was supermarkets. A near-record 39 divestitures were tallied, up 56% from 1997, but still slightly under the 42 tracked in 1994. A number of industry-shaking deals were reported by The Food Institute in its weekly Food Institute Report, including Albertson's acquisition of American Stores and Kroger's acquisition of Fred Meyer Inc. "As a result of all of this activity, the top 10 supermarket chains will account for nearly half of the nation's total grocery store sales of $365 billion," added Mr. Todd.

A number of firms were extremely persistent in making acquisitions last year. The most active was a raw product supplier, AgriBio Tech Inc. of Las Vegas, which made ten acquisitions, mostly seed companies and forage concerns. Both Suiza Foods and Dean Foods made eight acquisitions during the year, mostly of smaller regional dairy firms. Dean Foods, meanwhile, was on the selling end of another deal, the shedding of its vegetable division, including the well-known Bird's Eye brand, to the Agrilink Foods subsidiary of the ProFac Cooperative, Rochester, NY. That was not Agrilink's only purchase, however. The company also acquired five other firms during the year, making Pro-Fac the most active agricultural cooperative tracked. Indeed, Pro-Fac's six acquisitions accounted for exactly one-half of that category's total.

Other active firms included Omaha-based ConAgra, with six acquisitions, and H.J. Heinz and International Home Foods, both with four apiece.

All of this information and much more can be found in Food Business Mergers and Acquisitions: 1998. The report is available from the Food Institute, 28-12 Broadway, Fair Lawn, NJ, 07410; telephone 201-791-5570, ext. 12; fax 201-791-5222.

e-mail: books@foodinstitute.com.

The cost is $230 for Food institute members and $460 for nonmembers.

Green Giant[R] Introduces Three New Create a Meal[R] Oven Roasted Chicken Flavors

Green Giant recently announced the addition of three new products to its successful Create a Meal![R] line. These new Create a Meal![R] Oven Roasted flavors--Chicken and Stuffing, Barbecue Chicken and Lemon Pepper Chicken--will be available nationwide this spring. Create a Meal![R] Meal Starters continues to lead the $180 million meal starter category.

"With more than half of Americans serving chicken two to three times a week, according to our Green Giant research," said Carl Swedberg, Create a Meal! marketing manager, "households want new, interesting and fast ways to prepare chicken dishes. Consumers just add their fresh chicken to the Green Giant vegetables and special seasoning for a delicious and wholesome dinner in under 30 minutes." Swedberg said, "Our three new flavors meet the need for fresh and easy-to-prepare chicken dishes."

J&J Produces Filled Churros For 7-Eleven[R] World Oven Program

J&J Snack Foods Corp. will be supplying The Southland Corporation with filled churros for its World Oven program in all participating 7-Eleven stores. Filled churros offer an exciting way to enjoy the traditional churro cinnamon pastry with a new twist--fabulous fruit and creme fillings.

These taste-tempting treats will be available in three delicious flavors -- blueberry, rasp berry and bavarian creme. Distribution will be in approximately 3,000 7-Eleven[R] locations which feature the World Oven concept with product available starting February 22, according to the company. The program will be supported by Southland with window posters and signage on the World Oven display cases.

"The growing popularity of churros makes it a perfect addition to the World Oven program," said Steve Taylor, Vice President, Sales, J&J.

Kennith Fries, Category Manager, 7-Eleven stores commented, "The continuing success of the World Oven program is dependent upon innovative new product entries such as filled churros from J&J Snack Foods."
Food Business
Mergers & Acquisitions: 1992-1998

(Exclusive Food Institute Analysis)

Category: 1998 1997 1996 1995

Agricultural Cooperatives 12 3 4 5
Brokers 14 22 14 6
Diversified Firms with
 Interests in the Food Industry 20 11 12 9
Food Processing Firms: 230 186 139 168
 Bakers 19 20 8 10
 Brewers 6 5 2 6
 Confectioners 5 7 4 2
 Diversified Food Processing Firms 140 103 96 96
 Dairy Processors 27 15 4 18
 Meat Processors 14 12 10 10
 Poultry Processors 12 8 4 10
 Seafood Processors 3 7 4 4
 Snack Food Processors 4 9 7 12
Hotels/Motels 2 3 2 4
Investment Finns/Banks 26 (a.) (a.) (a.)
Nonfood Marketers selling
 Through Supermarkets 0 3 2 3
Packaging & Equipment Suppliers a. 46 13 19 14
Raw Product Suppliers 44 31 28 26
Restaurants 140 127 108 78
Retailers: 67 54 43 44
 Convenience Stores 10 6 4 5
 Supermarkets 39 25 20 22
 Others 18 23 19 17
Soft Drink Bottlers 20 17 8 15
Sugar Refiners 3 1 1 1
Wholesalers: 71 76 30 45
 Foodservice 38 36 10 23
 Grocery 33 40 20 22
Foreign Acquisitions of U.S. Firms:
 By Canadian Firms 15 18 4 8
 By Other Foreign Firms 39 36 49 38
Unclassified a. 64 133 75 65
TOTAL 813 734 538 529

Category: 1994 1993 1992

Agricultural Cooperatives 6 5 9
Brokers 9 8 14
Diversified Firms with
 Interests in the Food Industry 7 9 6
Food Processing Firms: 175 173 152
 Bakers 16 6 9
 Brewers 1 3 1
 Confectioners 2 9 6
 Diversified Food Processing Firms 106 114 84
 Dairy Processors 17 15 14
 Meat Processors 14 14 12
 Poultry Processors 7 3 9
 Seafood Processors 3 2 6
 Snack Food Processors 9 7 11
Hotels/Motels 2 2 2
Investment Finns/Banks (a.) (a.) (a.)
Nonfood Marketers selling
 Through Supermarkets 1 2 6
Packaging & Equipment Suppliers a. 14 8 21
Raw Product Suppliers 21 21 36
Restaurants 71 72 57
Retailers: 69 42 34
 Convenience Stores 10 5 4
 Supermarkets 42 19 15
 Others 17 18 15
Soft Drink Bottlers 10 18 9
Sugar Refiners 1 4 0
Wholesalers: 43 37 43
 Foodservice 14 12 19
 Grocery 29 25 24
Foreign Acquisitions of U.S. Firms:
 By Canadian Firms 10 3 9
 By Other Foreign Firms 44 31 18
Unclassified a. 39 50 52
TOTAL 522 485 468


(a.) Prior to 1998. Investment Firms and Banks, and Equipment Suppliers were included in the Unclassified category. Investment Firms and Banks are now categorized separately and equipment suppliers ate included in Packaging and Equipment Suppliers.3
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Date:Apr 1, 1999
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