Changing the world, one word at a time…

Morning Coffee Changes It Up

Dunkin' Brands Group (NASDAQ: DNKN) recently announced that certain stockholders will sell about 21 million shares in a secondary offering, with those investors receiving the proceeds. The chain also stated that it plans to buy back 15 million shares from certain stockholders. That is not the only good news tied to this company. The company's second quarter earnings rose 7.6%. Sales rose much faster than expected leading the company to raise its profit expectations for the year. Since the company went public in July 2011, Dunkin' Brands has been busy opening new doughnut shops and improving its U.S. Baskin Robbins business. The company has also been expanding internationally and paying down its debt. This year Dunkin' will be expanding its business both in the U.S. and abroad, making this a high growth stock.

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PepsiCo Changing the Lineup

Pepsico (NYSE: PEP) recently announced that it will be pulling its low-calorie “G Series Fit” line of Gatorade products from shelves after they failed to catch on with hardcore fitness buffs and athletes.  The line, which launched in April, included a pre-workout protein bar, protein drink, and low-calorie version of the sports drink.  The company hopes to redesign the products and packaging in 2013, hoping to have the line back on the shelves in 2014.  The line was pricey and did not perform to the company’s expectations.
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Organic Foods Take Hold

Recent reports from Dean Foods (NYSE: DF) showed the dairy giant swinging to a profit in the second quarter.  The company also said that it would spin off a fast-growing unit that sells organic dairy products and soy milk.  Dean Foods is planning to launch an IPO for 20% of its White Wave-Alpro unit, which makes popular brands including Horizon organic milk, Silk soy almond milks, and Alpro soy foods and drinks.  Dean Foods will retain the remaining 80% of the unit.  This news gave Dean Foods one of the largest percentage gains that day.  This move is smart as White Wave-Alpro and Dean Foods offer different products aimed at different customers.  The spin off will allow the units to be managed separately following different philosophies.
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Hershey Plans for Growth

The Hershey Company (NYSE: HSY) recently announced its 5-year growth plan with some very optimistic expectations. The company is targeting $10 billion in net sales by the end of 2017. As part of a new strategy the company will be focusing on five core brands: Hershey's, Reese's, Hershey's Kisses, Jolly Rancher, and Ice Breakers. CEO John Bilbrey said in a statement, "Our marketplace and financial results over the last few years validate our consumer-driven approach to core brand investment in both U.S. And key international markets." The Hershey Company is a leading manufacturer of quality chocolate and non-chocolate confectionery and chocolate-related grocery products. The company is also a leader in the gum and mint category. Hershey operates worldwide with revenue of more than $5 billion.

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The Cereal Wars

Food may be a necessity.  However, brand names are not.  As budgets become tighter, families start looking for ways to cut costs.  They trade in their brand names for generics as the main focus becomes pricing, which becomes a problem for those companies that rely on their branding for market position.  This is clearly evident when it comes to cereal companies.
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PepsiCo Seeking to Expand its Dairy Business

PepsiCo (NYSE: PEP) is home to hundreds of brands across the globe. These brands include Pepsi-Cola, Frito Lay, Gatorade, Tropicana, and Quaker. The company is separated into four major divisions: PepsiCo Americas Beverages, PepsiCo Americas Foods, PepsiCo Europe, and PepsiCo Asia, Middle East, and Africa. Currently, beverages make up the majority of PepsiCo’s revenue and brand recognition. With revenues of $60 billion, PepsiCo owns some of the world’s most popular brands available worldwide through a variety of go-to market systems. Recently, the company has been working toward diversifying even further, aiming to grow its global nutrition portfolio to $30 billion in revenue by 2020.
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