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November 30, 2010
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News about Richelieu Foods, Target and Campbell Soup.



 
Centerview Partners, through its private equity business, together with members of Richelieu management, announce the acquisition of Richelieu Foods. Financial terms of the transaction were not disclosed. Richelieu Foods is a $250-million food manufacturer that supplies premium private label frozen pizza and pourable products to leading national retailers and foodservice providers.  The company has four facilities in the Midwest.  Richelieu was previously owned by Brynwood Partners. Richelieu's management, including CEO Vincent Fantegrossi, will remain with the company and have made an equity investment in the business.  
 

"Frozen pizza, dressings and sauces are categories we know well," says Jim Kilts, Centerview's co-founder and former CEO of Kraft, Nabisco and Gillette.  "From the time we first learned about Richelieu, it was clear to us that the company's innovative products and great service contributed to private label's growth in these categories."

 

Target, whose private label strategy was profiled in the November issue of PL Buyer also is getting attention from National Public Radio Minneapolis. Just prior to Thanksgiving, target’s hometown NPR outlet ran a story on store brands at Target, pointing out that Target is one of the retailers most aggressively pushing its own brands. Target aims, NPR notes, to have its store-brand products at least match name brands in quality, and beat them on price. Target's Archer Farms products are priced 10 percent to 30 percent lower than name brands. Those products sell well, according to Annette Miller, who oversees Target's grocery business. She says 20 percent of Target's sales volume comes from its own branded products. Both the number and sales of Target's store-brand food products are on the rise, Miller says. "We've grown our own brand foods faster than our total food growth over the past five years, as we've continued to expand our product offerings into new product categories that we hadn't developed before," Miller says.

 

Economic conditions remain very challenging, making it more difficult for the entire food industry to grow sales, says Craig Owens, senior vice president of Campbell Soup, in the company’s most recent quarterly earnings call. “In the soup category specifically, increased promotional spending by Campbell and by other branded players has not succeeded in growing the overall category, either for the quarter or for the year. The overall category declined 6.8 percent in the past 52 weeks. Our sales declined 7.7 percent. Private label dollar sales also declined over the 52-week period. Private label's market share in soup grew in the past 52 weeks, yet, at only 12.5 percent, its share in soups significantly trails its share in most other mature food categories. Campbell's dollar share in wet soup for the past 52 weeks was 62.4 percent. The decline in our dollar share was driven by ready-to-serve soups and condensed eating soups. From a volume share perspective, our increased promotional activity kept our market share steady this past year,” he says.

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