After nearly 50 years in “nutrition detention,” fat is making a comeback thanks to shifting consumer preferences and an increasing number of clean label alternatives that align with consumer demand for healthier options. Consumers will continue to seek indulgent products such as baked goods, snacks, confectionery and dairy products where fats and oils help create a memorable tasting experience, but they also want to feel good about their choices. This opens the door for brand holders to not only clean up ingredient lists but also add a little functionality into finished products.

Download this infographic to find out more about how consumer preferences are driving demand for healthier fats and oils in food applications.

For more information, visit: “Fats & Oils: Consumers Driving Demand for Healthier Options.”

FILL OUT THE FORM BELOW AND DOWNLOAD TODAY!

After nearly 50 years in “nutrition detention,” fat is making a comeback thanks to shifting consumer preferences and an increasing number of clean label alternatives that align with consumer demand for healthier options. Consumers will continue to seek indulgent products such as baked goods, snacks, confectionery and dairy products where fats and oils help create a memorable tasting experience, but they also want to feel good about their choices. This opens the door for brand holders to not only clean up ingredient lists but also add a little functionality into finished products.

Download this infographic to find out more about how consumer preferences are driving demand for healthier fats and oils in food applications.

For more information, visit: “Fats & Oils: Consumers Driving Demand for Healthier Options.”

Dietary fats are essential for good health. They also make key contributions to the physical composition of a vast range of food products. While trans and saturated fats and partially hydrogenated oils (PHOs) top the list of ingredients to avoid, information is less conclusive about the best sources. However, plant-based options such as olive, avocado and nut oils typically are well-received by consumers seeking a cleaner label, and monounsaturated and polyunsaturated fats are generally associated with positive health benefits.

Table of Contents

• Viewpoint
  by Judie Bizzozero
• Fats & Oils: Consumers Driving Demand for Healthier Options
  by Judie Bizzozero
• Cookies & Sweet Baked Goods: Hitting the Sweet Spot With Simplicity
  by Melissa Kvidahl
• Case Study: Zest Brands

Takeaways for Your Business

• Tropical oils such as coconut and palm are classified as solid fats rather than oils.
• In the United States, most added oils are consumed in salad dressings, mayonnaise and snack chips.
• In 2016, 88% of U.S. households reported using butter, 50% olive oil, 32% vegetable oil, 24% canola oil.

Editorial Credit: designs by Jack / Shutterstock.com

McCormick & Co. Inc. entered into an $4.2 billion agreement to acquire Reckitt Benckiser’s Food Division. The deal will strengthen McCormick’s footprint in the fast-growing condiment sector through the addition of Frank’s RedHot® Hot Sauce, French’s® Mustard and Cattleman’s® branded products. The deal, expected to close third of fourth quarter 2017, also includes the acquisition of the nutrition bar brand Tiger’s Milk.

In the United States and Canada, Frank’s RedHot holds the No. 1 position in the fast-growing hot sauce category, while French’s Mustard is No. 1 in its category. Once the transaction is completed, French’s and Frank’s RedHot brands will become McCormick’s No. 2 and No. 3 brands, respectively, and advance McCormick from the No. 10 position to a leading position in the U.S. condiment category.

Lawrence E. Kurzius, chairman, president and CEO of McCormick, said RB Foods’ focus on creating products with simple, high-quality ingredients makes it a perfect match for McCormick as it continues to capitalize on the growing consumer interest in healthy, flavorful eating.

“The addition of Frank’s RedHot Hot Sauce, the clear consumer favorite in an attractive and high-growth category, French’s Mustard and the other beloved products enables McCormick to become a one-stop shop for condiment, spice and seasoning needs, providing our customers and consumers with an even more diverse and complete flavor product offering," Kurzius said.

McCormick anticipates that the hot sauce category will continue to see robust growth, and with insight-driven innovation and a passionate and increasing fan base, there are significant opportunities for expansion. McCormick’s growing global Millennial household penetration is expected to create substantial upside for Frank’s RedHot and the other acquired brands, increasing their respective consumer bases. The company also expects revenue synergies as a result of leveraging seasonal holiday promotions and grilling events that include other McCormick brands including Lawry’s®, Grill Mates® and its global branded spices, herbs and extracts.

The deal also strengthens McCormick’s position in the foodservice market where Reckitt Benckiser foods’ brands hold attractive positions across hot sauce, mustard, crispy vegetable and barbeque sauce sectors through the U.S. and Canadian foodservice channels.

The sale of its food division allows Reckitt Benckiser to focus on the global health and hygiene sector, which is growing because of its June 2017 acquisition of the Mead Johnson Nutrition Co. The deal moved Reckitt Benckiser into the global market leadership position in consumer health and hygiene. The addition of Mead Johnson’s infant and children’s nutrition business is expected to increase Reckitt Benckiser’s revenues in consumer health by approximately 90 percent and increase its developing market scale by approximately 65% percent.

Commenting on the sale, Reckitt Benckiser CEO Rakesh Kapoor said: “Following the acquisition of Mead Johnson Nutrition, this transaction marks another step toward transforming RB into a global leader in consumer health and hygiene, ensuring we continue to deliver for shareholders and give people innovative solutions for healthier lives and happier homes."

A Bounty of Mega Mergers & Acquisitions

The past few years have seen mega deals change the playing field of the food and beverage industry at both the CPG and retail levels.

Campbell Soup Co. this month entered an agreement to acquire Pacific Foods for $700 million in cash. The deal, Campbell’s fifth acquisition in five years, is the latest in a series of moves it’s made to diversify its portfolio in response to increased consumer interest in health and well-being. The company acquired Bolthouse Farms in 2012 for $1.55 billion, and Plum Organics baby foods and biscuit company Kelsen in 2013, and fresh salsa and hummus maker Garden Fresh Gourmet in 2015.

In June 2017, Amazon moved to gobble up No. 1 natural and organic foods retailer Whole Foods Market Inc. in an all-cash transaction valued at approximately $13.7 billion. The deal, expected to close during the second half of 2017, signals times are changing for the grocery retail sector. The blockbuster deal—the largest in Amazon’s 23-year history—will allow the e-commerce giant to expand its online presence and accelerate its brick-and-mortar grocery retail strategy. Whole Foods is facing a growing number of shareholder lawsuits over the Amazon deal.

In April 2017, Danone completed its $12.5 billion acquisition of WhiteWave Foods. The deal boosted Danone’s presence as a global leader strongly addressing tomorrow’s consumer trends by providing healthy and sustainable eating and drinking options. The transaction further diversifies Danone’s portfolio and broadens its presence in North America by creating a leading U.S. refrigerated dairy player, as well as one of the top 15 largest U.S. food and beverage manufacturers.

In October 2016, Anheuser-Busch InBev finalized its $105 billion acquisition of SABMiller that created the world’s largest beer company with nearly 30-percent market share, approximately $66 billion in combined annual revenues and nearly $12 billion in net income.

In 2015, Heinz and Kraft Food entered into a nearly $36 billion monster deal that formed the third-largest food and beverage company in North America and the fifth-largest in the world. The company now operates under the Kraft Heinz moniker. In February 2017, Unilever rejected a $143 billion takeover offer from Kraft Heinz, a mega deal that would have created the world’s second largest consumer goods company behind market leader Nestlé S.A. The deal would have added Unilever’s iconic food and beverages brands Hellmann’s, Knorr and Lipton to the Kraft Heinz portfolio.

In 2015, General Mills unloaded its Green Giant and Le Sueur frozen and canned vegetable brands to B&G Foods for $765 million. The sale was part of General Mills’ strategic priority to shape its portfolio for growth, focusing its resources on the brands, categories and geographic markets that have the greatest future growth opportunities like cereal and yogurt, as well as its organic and natural foods segment.

In 2015, Coca-Cola completed its $2.15 billion purchase of Monster Beverage that brought the Hansen’s Natural Sodas, Peace Tea, Hubert’s Lemonade and Hansen’s Juice brands under Coke's ownership.

Editorial credit for Whole Foods photo: Roman Tiraspolsky / Shutterstock.com

Whole Foods Market Inc. is facing a growing number of shareholder lawsuits over Amazon.com Inc.’s pending acquisition of the natural foods grocery chain.  

Robert Berg, who owns Whole Foods common stock, on Friday filed a putative class action lawsuit in Texas federal court, alleging violation of the Securities Exchange Act of 1934. The 14-page complaint is at least the second lawsuit filed this week to block Amazon’s acquisition of Whole Foods.

Berg alleged Whole Foods’ proxy statement, filed on July 7 regarding Amazon’s deal, left out “material information," including certain financial projections, rendering the document “false and misleading."

The complaint was filed against Whole Foods and directors on its board, including John Mackey, co-chief executive and co-founder.

The price that Amazon is paying for Whole Foods (NASDAQ: WFM) is inadequate, and by agreeing to certain provisions in the merger agreement, “the individual defendants have locked up the proposed transaction and have precluded other bidders from making successful competing offers for the company," according to the lawsuit.

“The individual defendants have all but ensured that another entity will not emerge with a competing proposal by agreeing to a ‘no solicitation’ provision in the merger agreement that prohibits the individual defendants from soliciting alternative proposals and severely constrains their ability to communicate and negotiate with potential buyers who wish to submit or have submitted unsolicited alternative proposals," the complaint alleged.

“Further, the company must promptly advise Amazon of any proposals or inquiries received from other parties," the lawsuit added. “Moreover, the merger agreement contains a highly restrictive ‘fiduciary out’ provision permitting the board to withdraw its approval of the proposed transaction under extremely limited circumstances, and grants Amazon a ‘matching right’ with respect to any ‘superior proposal’ made to the company." 

An earlier lawsuit was filed on Thursday against Whole Foods and its directors by Robert Riegel, a stockholder who also alleged violations of federal securities law.

Among the complaint’s allegations: that Whole Foods’ proxy statement failed “to disclose material information concerning the potential conflicts of interest faced by Whole Foods management and the board.

“The proxy statement states that, in connection with negotiating the merger agreement, Amazon had preliminary discussions with certain Whole Foods’ executive officers regarding Amazon’s desire to retain such officers following the closing," the lawsuit noted. “However, the proxy statement fails to disclose the timing and nature of all communications regarding future employment and/or benefits relating to Whole Foods management, including who participated in such communications and when Amazon first expressed its interest in retaining members of Whole Foods management following the merger."

The complaint asserted the above omissions are “particularly troubling" since Whole Foods indicated in a press release that Mackey will keep his job as CEO following Amazon’s acquisition.

Both lawsuits are pending in the U.S. District Court for the Western District of Texas. Austin, Texas-based Whole Foods did not immediately respond Friday to INSIDER’s request for comment.

According to Riegel’s lawsuit, Whole Foods received an offer in May from Amazon to acquire the company for $41 per share, but the supermarket chain countered at $45 per share.

The companies settled on $42 per share in a deal valued at US$13.7 billion.

The blockbuster merger agreement—the largest in Amazon’s 23-year history—will allow the e-commerce giant to expand its online presence and accelerate its brick-and-mortar grocery retail strategy. The company already has tested the waters through its AmazonFresh online grocery delivery service and its Amazon Go retail concept.

Whole Foods is the No. 1 natural and organic foods retailer and rang up sales of approximately $16 billion in 2016. The company has more than 460 stores in the United States, Canada and the United Kingdom.

Despite its iconic status as a destination for healthy and natural foods, the company has been under fire for more than a year. The business has faced an attempted shareholder takeover, lingering legal battles, and lagging sales due to traditional grocery chains adding more natural and organic products to their aisles.

In April, a hedge fund acquired nearly 9% of Whole Foods’ stock. According to TexasMonthly, Jana Partners revealed it would pressure the company to sell itself or overhaul its business, eliciting strong reactions from Mackey.

On April 26, senior representatives of Jana met with Whole Foods’ management, and according to the company’s proxy statement, demanded Whole Foods “make certain changes to its board of directors and announce an exploration of strategic alternatives."

“These people, they just want to sell Whole Foods Market and make hundreds of millions of dollars, and they have to know that I’m going to resist that," Mackey told TexasMonthly. “That’s my baby. I’m going to protect my kid, and they’ve got to knock daddy out if they want to take it over."

Although Mackey is expected to stay on as Whole Foods’ CEO under the merger, his company is poised to become Amazon’s “baby"—unless, of course, the deal falls through thanks to litigation or other forces.

Rep. David N. Cicilline of Rhode Island—the top Democrat on the House Judiciary Antitrust Subcommittee—this week called for a hearing to probe the Amazon-Whole Foods merger.

“Without taking a position on the legality of the transaction under the antitrust laws, Amazon’s proposed acquisition of Whole Foods raises important questions concerning competition policy, such as how the transaction will affect the future of retail grocery stores, whether platform dominance impedes innovation, and if the antitrust laws are working effectively to ensure economic opportunity, choice, and low prices for American families," Cicilline wrote in a letter to some colleagues, requesting a hearing.

Added the Democrat: “While several leading antitrust scholars have expressed doubt that the transaction will result in higher prices for consumers, it nevertheless occurs amidst waves of consolidation in recent decades that have decreased wages and resulted in gross inequality in the workplace."

Campbell Soup Co. has entered an agreement to acquire Pacific Foods for $700 million in cash. The deal, Campbell’s fifth acquisition in five years, is the latest in a series of moves it’s made to diversify its portfolio in response to increased consumer interest in health and well-being. The company acquired Bolthouse Farms in 2012 for $1.55 billion, and Plum Organics baby foods and biscuit company Kelsen in 2013, and fresh salsa and hummus maker Garden Fresh Gourmet in 2015.

Founded in 1987, Pacific Foods is a natural foods industry pioneer that has strong health and well-being and organic credentials, particularly with younger consumers. The addition of the Pacific Foods portfolio of organic broths and soups, shelf-stable plant-based beverages, and other meals and sides will accelerate Campbell’s efforts to deliver real food and beverages that meet consumers’ changing tastes and preferences. The acquisition also will bolster Campbell’s efforts to drive innovation in health and well-being to reinvent the center store, while giving the company more access to natural and organic customers and channels.

Campbell’s President and CEO Denise Morrison said, “This acquisition is consistent with our Purpose, ‘Real food that matters for life’s moments.’ Pacific is an authentic brand with a loyal consumer following. The acquisition allows us to expand into faster-growing spaces such as organic and functional food. Moreover, Pacific Foods is an excellent fit with Campbell—strategically, culturally and philosophically. It advances our strategic imperatives around real food, transparency, sustainability and health and well-being. Culturally, Campbell and Pacific Foods share similar values and a commitment to a purpose-driven approach. Philosophically, both companies believe in making food that we are proud to serve at our own tables using simple, recognizable ingredients."

Campbell expects to expand distribution; boost marketing support for brand building to engage consumers and shoppers; and invest in R&D and the supply chain to deliver operations and customer service excellence.

Pacific Foods will become part of Campbell’s Americas Simple Meals and Beverages division, which includes Campbell’s soup, simple meals and shelf-stable beverage units in the United States, Canada and Latin America. The division is led by Mark Alexander, president, and includes many leading brands including Campbell’s, V8, Swanson, Prego, Pace and Plum Organics.

Pacific Foods will continue to operate out of its certified-organic facility in Tualatin, Oregon. The company will maintain its farm-to-table approach with CEO and Co-founder Chuck Eggert staying on as a supplier of key ingredients through his family farms.

“We’ve spent the past 30 years focused on making nourishing foods with an emphasis on simple, organic ingredients and authentic, rich flavors. Looking ahead, a future with Campbell means we can maintain what we value while accelerating growth of the brand in a way that we couldn’t do alone, reaching more people while increasing our impact on sustainable agriculture," Eggert said.