• 🥫 Campbell’s Drops Soup Status
• 🛍️ Kroger Releases ‘Solid’ Q2 Earnings
• 💰 Rotunda Invests In Mama Lycha
• 📰 CPG, Retail CEOs See Short Tenures
• 🧃 Weed, Juice & A Snack Empire

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General Mills announced today it has agreed to sell its North American yogurt business to French dairy companies Lactalis and Sodiaal in cash deals valued at an aggregated $2.1 billion. 

Upon completion of the divestitures, expected to close in 2025, the U.S. and Canadian businesses will operate independently, with Lactalis purchasing the U.S. unit and Sodiaal acquiring the Canadian business. 

The transactions include the operations of several yogurt brands, including Yoplait, Liberté, Go-Gurt, Oui, Mountain High and :ratio, as well as manufacturing facilities in Murfreesboro, Tenn., Reed City, Mich., and Saint-Hyacinthe, Québec. 

“Today’s announcement marks another step forward for General Mills in advancing our Accelerate strategy and our portfolio reshaping ambitions. By efficiently managing our portfolio and sharpening our focus on our global platforms and local gem brands that have stronger growth prospects and more attractive margins,” said Jeff Harmening, General Mills chairman and CEO, in a press release. 

The Lucky Charms and Cheerios maker’s overarching Accelerate strategy, which was introduced in 2021, hinges on four pillars: “boldly building brands, relentlessly innovating, unleashing scale and being a force for good.” 

According to General Mills, its North American yogurt business generated net sales of roughly $1.5 billion in fiscal 2024. The divestitures are expected to dilute General Mills’ FY25 earnings per share by approximately 3% in the first 12 months following the close, according to the release. The company expects to use net proceeds from the deals for share repurchases. 

Sodiaal views the deal as a further testament to its ongoing strategic initiatives and reinforcement of “its position as a global leading dairy player,” a separate release states. The transaction also marks a key milestone in the Paris-based company’s strategy to enhance brand value and expand internationally as part of its “Grandir Ensemble” plan.

The Yoplait brand was founded in 1964 by a group of French dairy farmers. It joined forces with General Mills in 1977 through a franchise agreement that gave the company exclusive rights to market the brand in the U.S. 

In 2011, General Mills acquired a 51% stake valued at $1.2 billion in Yoplait from private equity firm PAI partners and Sodiaal, which kept the remaining stake. In 2021, the Cheerios maker sold the European operations of Yoplait back to Sodiaal. 

“This project further confirms Yoplait’s return to [Sodiaal’s] vision, a true national heritage brand that makes our farmers and employees proud. The acquisition strengthens our presence around the world and further promotes our French dairy expertise, which is appreciated across the Atlantic,” said Jean-Michel Javelle, president of Sodiaal, in a statement. 

Check out the full story on Nosh.

The Campbell’s Soup Company could soon be simply The Campbell’s Company after announcing this week it intends to drop its flagship category from the company’s formal name in order to best reflect its broader portfolio. The move is subject to shareholder approval at its annual meeting in November. 

🥨 The move comes as snacks increasingly bolster the company’s portfolio and balance sheet with the segment expected to contribute 3% to 4% net sales growth; Meals and Beverages are also key to its long term plans and are expected to contribute 1% to 2% growth.

🍝 Its Meals and Beverages segment also recently received a boost following the acquisition of Sovos Brands.

🗣️ What they said: “Our focused strategy has positioned us well and helped to solidify a foundation that has delivered consistent and dependable results. We are ready to turn the page and enter a new chapter where we build on Campbell’s transformed portfolio, strong team, and aligned and engaged culture with the goal to set the standard for performance in the food industry.” - Mark Clouse, president and CEO

Kroger leadership attributed its “strong” performance so far this year to its acceleration of digital sales (+11%) resulting in a 17% gain in delivery sales over last year. The company reaffirmed its FY2024 adjusted operating profit guidance range ($4.6 billion to $4.8 billion) while raising its sales growth forecast (excluding fuel) to 0.75% to 1.75%.

• Total sales were $33.9 billion, even with the same period in 2023.
• Operating profit rose to $815 million compared to a -$479 million loss in Q2 2023 (due to a $1.4 billion charge from a nationwide opioid settlement).
• Gross margin was 22.6% of sales for Q2. 

💭 The company is “confident in the facts and the strength of our position” as the FTC enters the preliminary hearing of the proposed merger with Albertsons, Chairman and CEO Rodney McMullen said. “The food industry has always been competitive and will continue to be after this merger.”

Private equity firm Rotunda Capital Partners announced this week it has invested in Latin American food producer Mama Lycha Foods. The investment was made in partnership with the company’s founders Luis and Maria Padilla, a press release states. 

🤠 The Houston-based company currently sells over 600 SKUs to more than 750 grocers and 150 regional distribution partners. Its products’ footprint spans 37 states and four Canadian provinces. It operates production facilities in Grand Prairie, Texas and Central America.

🔀 Luis Marconi, a longtime Rotunda executive and former head of grocery products at Hormel, will become executive chairman of Mama Lycha’s board as part of the transaction. The Padilla family will continue to work in the business following the close of the transaction.

💬 What they said: “After an exhaustive search, it was clear that Rotunda was the right partner as we begin this next phase of accelerated growth. Rotunda truly understands our capital needs, our culture, and our commitment to supporting our team, brands and customers. We look forward to our partnership, which will position Mama Lycha as the main platform company for continued rapid growth across products, brands, and retailers." - Luis and Maria Padilla, co-founders

Both Starbucks and Nestle saw rather abrupt departures of their chief executives in recent weeks; according to a new report from Reuters, those timelines may be on-trend.

✂️ The report notes that chief executives in the U.S. retail and packaged goods sectors have, on average, 7 months shorter tenures in their positions compared to executives in autos, finance, tech and manufacturing industries in 2024. The data gathered from research firm Equilar show.

🗓️ CPG and retail CEOs typically hold their roles for 7.7 years while finance executives average 10 years in their posts and tech industry chiefs average 9 years. 

⏱️ An advisor with Barclays suggested there is a new lack of patience among boards in a post-pandemic economy where many would rather remove and replace rather than try to find a way to make a CEO’s management styles work. 

This week, the podcast team tests its pumpkin spiced knowledge in a friendly CPG Week quiz (spoiler: most brands have had an autumn-inspired flavor). The group goes on to discuss the implications of California’s new restrictions of hemp-derived cannabinoids. Later, they break down a recent merger in the juice industry. The conversation convenes around more M&A chatter, with the team taking a look at Our Home’s recent acquisitions and assessing how it is positioning itself as a major player in snacking.

Listen to to the episode now.

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