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Yoplait is an internationally franchised brand of yogurt jointly owned by United States–based food conglomerate General Mills and French dairy cooperative Sodiaal. Wikipedia.

Chapelot D.,University of Paris 13 | Payen F.,Yoplait
British Journal of Nutrition | Year: 2010

In the context of epidemic obesity, satiety is an important target for nutritional interventions. Using a multidimensional approach, we compared the effect on satiety of two food products frequently consumed in France by young adults as a small mid-afternoon meal called the goter. Participants were eighteen healthy young males (aged 208 (sd 18) years) of normal body weight (BMI 217 (sd 17) kg/m2) used to eating four times per d including a goter. On two occasions, under laboratory conditions, the time-blinded participants consumed a fixed energy lunch (28MJ) and, 240min later, either a liquid yogurt or chocolate bars matched for energy (12MJ) and weight (366g). Then, satiety was assessed by: (1) ratings of hunger, appetite, desire to eat and fullness at 20min intervals (perception), (2) the delay until the subject requested his dinner meal (duration) and (3) energy intake at this meal (consumption). Results showed that satiety was perceived higher after liquid yogurt than chocolate bars over the 60min preceding the next meal, as evidenced by hunger (P<0005), appetite, (P<0005), desire to eat (P<004) and fullness (P<005) ratings. However, its duration was similar between liquid yogurt and chocolate bars (165 (se 8) and 174 (se 7) min respectively) and this difference was not followed by reduced intake at dinner. In conclusion, this approach of satiety revealed that a liquid yogurt induced a lower subjective motivation to eat than chocolate bars during the hour preceding the spontaneous onset of a meal, without affecting subsequent food intake. © 2010 The Author.

Chr. Hansen A S and Yoplait | Date: 2010-06-03

The present invention relates to a process for manufacturing fermented dairy products, in particular stirred milk products. The invention concerns a process for the manufacture of a fermented dairy product without any cooling step for stopping fermentation due to the use of a weakly post-acidifying lactic bacterium culture as a starter.

News Article | February 6, 2013
Site: venturebeat.com

The 15 startups to present in the first round of 500 Startups Demo Day are taking on a wide range of industries and markets. The founders hail from America, Europe, India, and Latin America, and they are developing innovative ideas about e-commerce, marketing, payments and more. Check the companies out below. CompStak says it creates transparency in commercial real estate by crowdsourcing information that is often hard to find, difficult to compile, or not unavailable. It sells the data to brokers, firms, and large real estate property owners. It has made a significant dent in the New York market and recently launched in San Francisco. Founder Michael Mandel is a former a real estate broker. He said half a trillion dollars in commercial real estate transactions happens each year, and CompStak helps them make these deals. It has raised a over $1 million so far and is raising more to promote growth. The headquarters is in New York. Waygo powers an instant visual translation for smart phones. Founder Ryan Rogowski visited China and struggled with the language barrier. Eating kung pao chicken every day because he couldn’t figure out how to order anything else inspired him to build a simple translation service. Waygo translates text simply by hovering your smartphone camera over the words. The service costs $14.99 for unlimited translations per language. Chewse is a B2B marketplace for organizations spending thousands of dollars on corporate catering. The platform makes it easier to order food easily. In the two test territories, the startup has already fed 20,000 meals to big customers, including Wells Fargo, the University of Southern California, and PriceWaterhouseCoopers. Founder Tracy Lawrence said these companies spend $30,000 a year on Chewse just to feed their people, and it has a waiting list of 700 companies. It’s in Santa Monica, Calif.. GazeMetrix helps brands know when their pictures appear in social media. The technology looks inside photos on social media sites to identify brand logos. Founder Deobrat Singh said people are “throwing money” at gazeMetrix because social media is increasingly focused on pictures, but brands don’t know to access or measure this visual content. Singh claims the technology can tell when images are going viral before they do so. GazeMetrix already has more than 40 clients, including Yoplait, Nike, Svedka, Coca-Cola, and Under Armour. The founders come from Delhi, India. BabyList is a baby registry that helps new parents find, share, and buy the things they need for their babies. Founder and CEO Natalie Gordon is from San Francisco. When she was pregnant two years ago, she created multiple baby registries because she couldn’t find everything she needed from just one store, nor could she ask for things she actually needed, like help preparing meals. Gordon formerly worked as a developer at Amazon and immediately applied her coding skills to the problem. She launched Babylist two weeks before her son was born. Baby “stuff” is a huge industry, and Gordon said she is revolutionizing “baby e-commerce.” Last year, $2.3 million in gifts went through the site. Founder Harald Trautsch built everbill to provide an easy way to issue invoices and estimates. It is “the last line of communication” between business, customers, and accountants. The B2B is working with large banks, SMBS, and telecom companies, including T Mobile. The founders are from Vienna. Instamojo makes “selling online as easy as sharing.” The technology enables the sale of digital goods instantly — without requiring complex forms, time-consuming steps, or coding skills — by copying and pasting a link. Founder Sampad Swain is from Mumbai, India, where he previously started and sold a successful company. femeninas is a social engagement platform for women and fashion in Spanish. Founder Ricardo Lerch comes from Buenos Aires and started the company with his wife. Lerch said onstage that there are 200 million Spanish-speaking women, and they are spending massive amounts of money on fashion and beauty because they “care a lot about their looks.” Lerch and McClure both are excited about opportunities in the Spanish-speaking market. iDreamBooks is a trusted source of book recommendations, like RottenTomatoes for books. The company is from Canada and India. Founder Rahul Simha is a bookworm and wanted to build a universal score for books. He said the Amazon scores are becoming increasingly diluted and positive reviews are for sale. iDreamBooks aggregates professional and critical reviews, rates it as positive or negative, and generates a “snippet.” Read more on VentureBeat. Markerly gives publishers and advertisers the access to data analytics about ‘micro content.’ In the nine weeks since launching, it has looked at the activities of 9 million users across its network. The technology sheds light on the “dark web.” It tells publishers what users are doing once they get to a site, based on small actions like copying and pasting. The team is from Washington, DC. Founder Sarah Ware said these “micro data points” provide the greatest insight into user behavior and can optimize their marketing. Brazilian startup Qual Canal tracks conversations about TV shows and ads in social media. Founder Andre Terra said Brazil has 200 million addicted TV viewers and is the second largest social media user base in the world. People talk a lot about TV in Brazil, and Qual Canal captures (and sells) this data to broadcasters, brands, and agencies. TouristEye is a web and mobile travel guide that helps you discover, collect, and plan travel experiences for your trips and getaways. Founder Ariel Camus said online travel guides suck, and they seek to do this by making it more personal. It is based in Madrid. Hunie is a community that helps designers get constructive and honest peer-to-peer critiques. Founder Damiam Madray said these “skinny jean-wearing, tea-sipping geniuses” are in high demand but are hard to find. There are currently 365,000 job ads for designers. Hunie seeks to bring designers together to create more designers, because that is what startups need. Curious Hat is building a “mobile playground for a curious generation.” The founders, Luca Prasso and Erwan Maigret, spent 20 years working at DreamWorks. Prasso’s son inspired him to create an online environment that creates “new types of real-world interactions” between parents and children. Dealflicks like Priceline for movie tickets. This Oakland, Calif., company offers movie tickets and concessions for up to 60 percent off to get butts in movie theater seats. Founder Sean Wycliffe dropped out of college to live a party-boy lifestyle. After running out of money, he returned to college and began seeing a lot of movies in theaters. He noticed how many empty seats there were in the theaters and recruited two cofounders to build Dealflicks.

News Article | February 26, 2015
Site: www.bloomberg.com

John Bryant is a voracious cereal eater. Most mornings, he has a bowl of Kellogg’s All-Bran Buds, a spinoff of the company’s 99-year-old All-Bran, originally marketed as a “natural laxative.” At night he’s likely to snack on Honey Smacks, which is 56 percent sugar by weight. Sometimes he’ll mix it with more nutritious Frosted Mini-Wheats. Bryant also feeds the stuff to his six children. “I can assure you that we go through an enormous amount of cereal,” he says.  This makes the Bryant household somewhat of an anachronism at a time when Americans have moved on to granola bars, rediscovered the virtues of hot meals such as oatmeal and eggs, and fallen under the spell of Greek yogurt. But then Bryant would probably feel guilty if he joined them. He’s chief executive officer of Kellogg, the world’s largest cereal maker, whose brands also include Frosted Flakes, Rice Krispies, Corn Flakes, Froot Loops, and Apple Jacks. Kellogg needs all the cereal eaters it can muster. On Feb. 12, Bryant, fortified by his customary helping of All-Bran, arrived at Kellogg headquarters in Battle Creek, Mich., to deliver bad news. He announced the company’s U.S. morning-foods net sales fell 8 percent in the fourth quarter of 2014. It was the division’s seventh quarterly decline in a row. “It’s very frustrating,” Bryant said in a postmortem telephone interview. For almost a century, Kellogg defined the American breakfast: a moment when people would be jolted out of their drowsiness—often with a stupendous serving of sugar. Breakfast was personified by Kellogg’s cartoon mascots like Frosted Flakes’ vigorous Tony the Tiger; Froot Loops’ pig Latin–spouting Toucan Sam; and Rice Krispies’ Snap, Crackle, and Pop, a trio of elves who mischievously splashed around in a milky bowl. Kellogg still spends more than $1 billion a year on advertising, but it no longer has the same hold on breakfast. The sales of 19 of Kellogg’s top 25 cereals eroded last year, according to Consumer Edge Research, a Stamford (Conn.) firm that tracks the food industry. Sales of Frosted Flakes, the company’s No. 1 brand, fell 4.5 percent. Frosted Mini-Wheats declined by 5 percent. Meanwhile, Special K Red Berries, one of the company’s breakout successes in the past decade, fell by 14 percent. Kellogg executives don’t expect cereal sales to return to growth this year, though they hope to slow the rate of decline and do better in 2016. But some Wall Street analysts say cereal sales may never fully recover. In Battle Creek, so-called Cereal City, that would be the equivalent of the apocalypse. The 49-year-old Bryant, who resembles a cereal box character himself with his wide eyes, toothy smile, and elongated chin, blames Kellogg’s financial woes on the changing tastes of fickle breakfast eaters. The company flourished in the Baby Boom era, when fathers went off to work and mothers stayed behind to tend to three or four children. For these women, cereal must have been heaven-sent. They could pour everybody a bowl of Corn Flakes, leave a milk carton out, and be done with breakfast, except for the dishes. Now Americans have fewer children. Both parents often work and no longer have time to linger over a serving of Apple Jacks and the local newspaper. Many people grab something on the way to work and devour it in their cars or at their desks while checking e-mail. “For a while, breakfast cereal was convenience food,” says Abigail Carroll, author of Three Squares: The Invention of the American Meal. “But convenience is relative. It’s more convenient to grab a breakfast bar, yogurt, a piece of fruit, or a breakfast sandwich at some fast-food place than to eat a bowl of breakfast cereal.” People who still eat breakfast at home favor more labor-intensive breakfasts, according to a recent Nielsen survey. They spend more time at the stove, preparing oatmeal (sales were up 3.5 percent in the first half of 2014) and eggs (up 7 percent last year). They’re putting their toasters to work, heating up frozen waffles, French toast, and pancakes (sales of these foods were up 4.5 percent in the last five years). This last inclination should be helping Kellogg: It owns Eggo frozen waffles. But Eggo sales weren’t enough to offset its slumping U.S. cereal numbers. “There has just been a massive fragmentation of the breakfast occasion,” says Julian Mellentin, director of food analysis at research firm New Nutrition Business. And Kellogg faces a more ominous trend at the table. As Americans become more health-conscious, they’re shying away from the kind of processed food baked in Kellogg’s four U.S. cereal factories. They tend to be averse to carbohydrates, which is a problem for a company selling cereal derived from corn, oats, and rice. “They basically have a carb-heavy portfolio,” says Robert Dickerson, senior packaged-food analyst at Consumer Edge. If such discerning shoppers still eat cereal, they prefer the gluten-free kind, sales of which are up 22 percent, according to Nielsen. There’s also growing suspicion of packaged-food companies that fill their products with genetically modified organisms (GMOs). For these breakfast eaters, Tony the Tiger and Toucan Sam may seem less like friendly childhood avatars and more like malevolent sugar traffickers. Bryant says Kellogg is laboring to develop cereals that will overcome these cultural shifts and end its morning misery. Some of Kellogg’s wounds, however, are self-inflicted. Its two largest competitors—General Mills, maker of Cheerios and Lucky Charms, and Post Holdings, whose brands include Grape-Nuts and Honey Bunches of Oats—are struggling with the same morning trends. Yet the decline in General Mills’ 2014 cereal sales was half as bad as Kellogg’s, and Post eked out a 2 percent increase. Kellogg’s dismal sales are indicative of the company’s larger problems. Of the 21 analysts covering Kellogg tracked by Bloomberg, 19 have a sell or a hold rating on the company’s stock. Only two recommend buying the cereal maker’s shares. It’s cut costs, only to amp up spending again. There have been three heads of U.S. breakfast foods in four years as the division’s profits fell. Bryant’s latest scheme to revive cereal sales—by adding more fruit and natural ingredients to some of its best-known brands—seems far-fetched at best. The meltdown in Battle Creek is puzzling because, until recently, the company was known as a well-managed organization. “Kellogg was perhaps the most respected consumer-product company out there,” says David Palmer, a food industry analyst at RBC Capital Markets. “They went off the rails.” Bryant frequently pays homage to his company’s founder, Will K. Kellogg, the man who practically invented the modern idea of breakfast. Throughout much of the 19th century, Americans woke up in the morning and ate leftovers. Predictably, this caused widespread indigestion. Wealthy people often went to sanitariums for exotic cures involving enemas and hydrotherapy. Kellogg worked at just such a health spa in Battle Creek run by his older brother, Dr. John Harvey Kellogg, an eccentric wellness guru memorialized in the 1994 movie The Road to Wellville. The Kelloggs were Seventh-Day Adventists and therefore strict vegetarians. They couldn’t serve their patients eggs and bacon. So in 1894 they came up with something lighter: corn flakes. “They developed a flaking process,” says Brian Wilson, a professor of comparative religion at Western Michigan University and author of Dr. John Harvey Kellogg and the Religion of Biologic Living. “That’s the origin of the modern breakfast flake.” The Kellogg brothers were soon quarreling about what to do with the invention. W.K. Kellogg wanted to make money. In 1906 he founded Battle Creek Toasted Corn Flake Co., enlivening the taste of his cereal with sugar. His brother thought this was blasphemous. A legal battle ensued over who had the right to use the family name, and W.K. Kellogg prevailed. He introduced All-Bran in 1916. Rice Krispies followed in 1928. By then, Kellogg was a wealthy man known for his benevolence. He started a charitable foundation that supported children’s health and education. During the Depression, he changed the factories’ three eight-hour shifts to four six-hour ones to employ more people. In 1949, Kellogg hired Leo Burnett, the rumpled advertising genius who created the Jolly Green Giant and the Marlboro Man. Burnett persuaded Kellogg to promote his cereals on television, then a nascent medium. His agency was responsible for many of Kellogg’s Disney-like cartoon characters. They became as famous as the ones in the Saturday morning shows sponsored by Kellogg, such as Yogi Bear and Huckleberry Hound. In fact, Yogi and Huckleberry sometimes cavorted in Kellogg commercials. Children, many of whom watched TV with a bowl of milk-soaked Kellogg’s Sugar Pops or Frosted Flakes, were entranced. They ate cereal for breakfast, cereal for lunch, and cereal for a bedtime snack. Will Kellogg’s Cereal Sales Ever Return to Normal? Kellogg died at the age of 91 in 1951. By the 1970s, Kellogg’s share of the U.S. cereal market had reached 45 percent. The Federal Trade Commission said the company was too big and might need to be broken up. Nothing came of it. It was harder, though, for Kellogg to escape the consumer activists who criticized marketing junk food to youngsters. “Many of the kid-oriented cereals have a fair amount of sugar in them,” says Michael Jacobson, executive director of the Center for Science in the Public Interest, a food industry watchdog. “Their Eggo waffles are mostly white flour. Pop-Tarts are white flour and sugar. For a company that started out as a health-food company, they’ve turned into something very different.” (Kellogg says it has lowered the amount of sugar in its top-selling kids’ cereal by as much as 30 percent in the past several years.) As sugary cereals started to lose their broad appeal by the early 1990s, Kellogg forfeited its dominant position in the U.S. to General Mills, whose Cheerios were marketed as a healthier alternative. Kellogg’s fortunes rose again with the ascension of Carlos Gutierrez, a handsome Cuban-born executive with dark hair and a snowy mustache who began his career selling Frosted Flakes out of a truck to hole-in-the-wall stores in Mexico City. Gutierrez took over as the company’s CEO in 1999 and proved himself a gifted morning-food strategist. He believed that consumers would pay more for cereals they thought were better for them. He decided to push Special K, then a staid diet brand marketed to weight-conscious women. Kellogg spiced it up by introducing freeze-dried strawberries developed in the company’s Battle Creek food laboratory. Special K Red Berries became a best-seller, inspiring a plethora of extensions such as Special K Chocolatey Delight cereal, Special K Cracker Chips, and a Special K low-calorie pink lemonade mix. Kellogg also paid $33 million in 2000 for Kashi, a health-food cereal maker founded by an enterprising jazz trumpeter and his wife in La Jolla, Calif. At the time, Kashi was bringing in $25 million a year. Less than a decade later, its annual revenue had climbed to $600 million. Gutierrez made a point of keeping Kashi based in Southern California to give it some indie cred. But now that it was a division of Kellogg, the health-food purveyor no longer behaved like a mom and pop venture. It introduced Kashi Chocolate Almond Butter cookies, Kashi frozen pizzas, and other items that seemed closer and closer to processed food. In 2004, Gutierrez departed to become President George W. Bush’s Commerce secretary. After a two-year stint by James Jenness, a Kellogg director and former Leo Burnett executive, David Mackay, a balding, soft-spoken New Zealander and the company’s chief operating officer, took the top job. Kellogg’s current problems began shortly thereafter. In 2008, Mackay embarked on a $1 billion, three-year cost-cutting initiative called K-Lean, which targeted wasteful spending in the company’s factories. It was soon clear that Mackay had gone overboard. A flood at an Eggo factory in Atlanta led to a debilitating frozen waffle shortage that battered the company’s financial results in 2009. The following year, Kellogg recalled 28 million boxes of Froot Loops, Honey Smacks, and others manufactured at its Omaha plant because of an odd stench and taste the company traced to the plastic lining in the boxes. Kellogg acknowledged that some customers started their day with these cereals only to be sidelined by nausea and diarrhea. “It was horrible,” says Trevor Bidelman, president of Local 3G of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, which represents workers at the Battle Creek cereal factory. “They cut way too deep. Probably the biggest thing that hurt them was the thousands of years of experience that they ran out the door. Our plants could not run very effectively for two to three years after that.” (Kellogg says neither the flood nor the recall were related to K-Lean.) By the end of 2010, Kellogg had replaced Mackay with the more gregarious Bryant, a 13-year Kellogg veteran. His first task was to clean up the K-Lean mess. “We did cut too many people in our facilities in the U.S. network,” Bryant admitted in a conference call in November 2011. He said Kellogg was hiring 300 factory workers and adding additional waffle capacity. Some analysts listening were astonished by the disarray in Battle Creek. “It seems like the more rocks that are turned over, there is more ugly stuff underneath,” Eric Katzman, a food industry analyst at Deutsche Bank, said at the time. “It’s amazing that a company like Kellogg, with its reputation, is actually going through this.” As Kellogg flailed, General Mills strengthened its position. That year, when many Americans were choosing yogurt over Cheerios, it paid $1.1 billion for a controlling stake in Yoplait, the world’s second-largest yogurt producer. As soon as he could, Bryant made what he considered a transformative purchase. In 2012 he orchestrated Kellogg’s $2.7 billion acquisition of Pringles, the 44-year-old canned potato chip brand, from Procter & Gamble. It’s hard to imagine a product more emblematic of the processed food that American consumers were shirking. But the deal boosted Kellogg’s net sales by more than $1 billion that year, to $14 billion, and enabled Bryant to claim that Kellogg was no longer so dependent on cereal. Kellogg still counted on Frosted Flakes and its breakfast-food siblings for more than a third of its operating profits, which were dwindling. In November 2013, Bryant puzzled Wall Street by announcing a four-year cost-cutting plan with another memorable title: Project K. He vowed to eliminate 7 percent of Kellogg’s workforce and use a portion of the savings to create exciting new cereals, though he declined to provide further details at the time. Industry analysts were skeptical. “If you say you cut too much a year ago, and it didn’t lead to improved performance, then why should we believe that cutting more now will solve the longer-term issue, which is reduced demand?” Consumer Edge’s Dickerson says. In 2014, Kellogg closed a cereal plant in London, Ont., and an Australian snacks operation. Bryant has threatened to close one of its four American cereal plants this year if the bakers union won’t accept a contract enabling Kellogg to hire a new category of “transitional” workers who would be paid lower wages and be ineligible for a pension. “It is not our preferred approach,” Bryant says. “But if that’s where we end up, that’s a path we’ll have to go down.” So far the union has declined his overtures. Bidelman, a fourth-generation Kellogg employee, doesn’t think the company’s founder would have treated his factory workers so callously. “The philosophy of the company seems to have changed quite a bit,” he says. Instead, Bidelman says, Kellogg should trim Bryant’s compensation, which was $7.9 million in 2013. Morning-food sales continued to fall in 2014. Some Special K spinoffs posted double-digit declines, and the Kashi line was a particular embarrassment. Kashi Heart to Heart fell 27 percent. Kashi GoLean Crunch lost 30 percent. Analysts say that part of the problem is Kellogg’s indecisiveness with the division. In 2013 it moved Kashi from Southern California to Battle Creek, which Kellogg insisted would better position it for future growth. Then, last year, Bryant announced that Kellogg was moving Kashi back to La Jolla so the struggling unit would be closer to its roots. “Kashi is a brand that has lost its way,” says RBC’s Palmer. “Many of its varieties are not organic. Many have GMOs.” While Bryant attacked costs, his competitors added new cereals in response to consumers’ shifting breakfast habits. In January 2014, General Mills announced GMO-free Cheerios. Post said it would release a similar version of Grape-Nuts. Kellogg says it can’t do the same with Frosted Flakes because almost all the corn made in the U.S. is genetically modified. In November, Bryant made a belated attempt to get some new breakfast fare to market, unveiling a gluten-free Special K in an earnings call. He arguably went off message, however, by making a big deal out of a new peanut butter and jelly Pop-Tart. “If I ask you do you think peanut butter and jelly Pop-Tarts are where United States food culture is headed, the answer most likely is no,” Dickerson says. In February, Bryant acknowledged that Kellogg’s U.S. snacks division was also ailing. Last year its sales declined 2 percent. This put even more pressure on him to resuscitate the cereal division, so Bryant has been pushing what he describes as a long-term rescue plan. He wants to rebrand Special K from a diet brand to a cereal for the health-conscious with new variants such as Special K Protein Cinnamon Brown Sugar Crunch. The company is also promoting Raisin Bran with Cranberries. Bob Goldin, executive vice president of Technomic, a food industry consultant, doubts that these new cereals will have a big impact on the company’s sales. “The category is pretty mature,” Goldin says. “It’s not so easy anymore to introduce a new line or do a new TV ad and life is good again.” Bryant is also determined to restore Kashi’s credibility with health-food shoppers. Kellogg already has 15 GMO-free cereals in supermarkets. It hopes to add more this year. At the same time, Kellogg’s less publicized political maneuvers aren’t helping it with anti-GMO consumers. In California, Washington, and Oregon, Kellogg is spending $1.4 million to defeat ballot initiatives that would force companies to identify GMO ingredients on their labels. Alexis Baden-Mayer, political director of the Organic Consumers Association, says Kellogg is alienating customers: “It seems counterintuitive.” Kellogg says state-by-state labeling would confuse shoppers and increase costs. Focusing on Special K and Kashi comes with the risk of neglecting older brands—the ones keeping Kellogg afloat. Even though Frosted Flakes is hardly a next-generation breakfast product, the company sold $439 million worth last year, making it the second-most popular cereal in the U.S. after General Mills’ Honey Nut Cheerios. What’s more, Kellogg increased Froot Loops sales by 3 percent, to $266 million, by marketing the technicolor rings to adults as a late-night snack. “These are not dead brands,” says Mary Zalla, global vice president of Landor Associates, a branding adviser. “There’s amazing equity in Kellogg’s name. Then they’ve got this other whole layer of value: the characters. Sometimes they have longevity. Sometimes they don’t. But think of Ronald McDonald.” Bryant isn’t worried. “The company has been around for 109 years,” he says. “We have the time. We have a plan to turn it around.” He better show results in a hurry. The consensus on Wall Street is that Kellogg is a takeover candidate. “He’s at a critical point in his career,” says Palmer of Bryant. Perhaps it’s time for the CEO to imagine what W.K. Kellogg would do. It’s doubtful the company’s founder would let things get so out of control at his factories. It’s hard to think of him taking away employee benefits. He wasn’t a trend follower: Kellogg created breakfast flakes and foresaw the power of TV advertising. There must be some way for his successors to sell breakfast food to working parents and their children who are now watching YouTube instead of Saturday morning cartoons. Bryant could always triple his All-Bran Buds consumption and entice his children to eat more cereal, too. It may not save Kellogg. But at least he’ll be able to say he went down fighting.

News Article | April 20, 2015
Site: www.businesswire.com

CHICAGO--(BUSINESS WIRE)--Fitch Ratings has assigned a 'BBB+' rating to General Mills, Inc.'s (General Mills), issuance of EUR900MM senior unsecured notes (EUR500 million due in 2023 and EUR400 million due in 2027). The company plans to use the net proceeds for general corporate purposes including the repayment of commercial paper (CP). The notes rank pari passu with General Mills' other senior unsecured debt and contain a Change of Control provision at 101. The notes are issued under the company's indenture dated Feb. 1, 1996. A full list of ratings follows at the end of this release. Leverage Temporarily High: Fitch estimates that General Mills' fiscal 2015 leverage (total debt-to-operating EBITDA) will be near 3x, factoring in the $822 million debt-financed Annie's acquisition in October 2014. The company has also completed $1.2 billion in share repurchases year to date through February 2015, a portion of which were debt financed. Consolidated total debt-to-operating EBITDA was 3.2x, operating EBITDA-to-interest expense was 9.8x and funds from operations (FFO) adjusted leverage was 4.4x for the latest 12 months ended Feb. 22, 2015. Fitch anticipates that leverage has peaked and should decline modestly in fiscal 2016 with EBITDA growth, and leverage in fiscal 2017 and beyond should be back in the mid-2x range. Fitch expects General Mills may pull back on share repurchases if operating earnings improvement remains elusive, to return leverage to these levels. During the fiscal fourth quarter of 2015, the company approved a one-time repatriation of approximately $600 million of foreign earnings that Fitch believes will be utilized for debt reduction and funding cash restructuring charges (discussed below). Cash income taxes related to the repatriation are approximately $15 million to $25 million. Strong Margins, Liquidity, Brands: General Mills' ratings incorporate the company's strong profitability, substantial internally generated liquidity, and leading market positions in key categories. Fitch considers General Mills to have one of the best product portfolios in the industry, with strong brand equities and marketing expertise in large categories that span a variety of meals and snacks. The company maintains significant brand equity in major product categories including cereal, yogurt, ready-to-serve soup, and snacks. Although they have recently been under pressure, margins are generally among the sector's top tier. Credit strengths are balanced with General Mills' high priority for returning cash to shareholders. FCF Lower, but Still Significant: General Mills' annual free cash flow (FCF; cash flow from operations less capital expenditures and dividends) averaged approximately $850 million during the past five years. The company generally utilizes its FCF as well as debt funding as it did in fiscal 2014 and 2015 for share repurchases. The company has historically shown discipline to pull back on share repurchases after significant acquisitions. Near-term annual FCF will be below the historical average due to weaker operating performance in 2015 and cash restructuring charges announced to date of $260 million split across fiscal 2015 and 2016. Fiscal year-to-date cash restructuring charges were approximately $40 million. Meaningful cost synergies of $260 million to $280 million in fiscal 2016 could more than offset the cash charges. Operating Improvement Anticipated: There is little headroom in the ratings for additional operating underperformance without commensurate debt reduction. The company has incurred weak industry trends and higher merchandising expense in U.S. Retail, its largest segment. Fitch believes the company's plans for more product innovation, continued focus on brand renovation and capitalizing on consumer trends will accelerate growth in its U.S. Retail business, which comprises 59% of net sales and 75% of segment operating profit. However, the operating environment remains difficult across mature markets. Annie's approximately $200 million annual sales are not material to General Mills overall. However, Annie's contributes scale in the higher growth natural and organic category where General Mills now has more than $600 million annual net sales. Ample Liquidity: The company maintains $2.7 billion of undrawn committed credit facilities that support its CP program, consisting of a $1 billion facility expiring in May 2019 and a $1.7 billion facility expiring in April 2017. In addition, Yoplait SAS has a EUR200 million revolver due in June 2019 that General Mills consolidates. General Mills had $2.8 billion available on its total of $2.9 billion committed facilities as of the most recent quarter end, with borrowings only on the Yoplait facility. Fitch views total debt at $10.5 billion at Feb. 22, 2015 including $1.7 billion CP and $251.5 million Class A Limited Membership Interests. Upcoming debt maturities consist of $750 million floating-rate notes and $250 million of 0.875% notes both due in January 2016. Fitch expects that General Mills will refinance near-term maturities. On March 17, 2015, the company repaid $750 million of notes at maturity with CP. The CP balance at March 17, 2015 was $2.2 billion. --Fitch believes that leverage has peaked, and should decline modestly in fiscal 2016 with EBITDA growth, and leverage in fiscal 2017 and beyond should be back in the mid-2x range. --Low single-digit net sales growth for full-year fiscal 2015 and high single-digit net sales growth in the fiscal fourth quarter including the 53rd week, on a constant currency basis. Net sales from Annie's for six months since the acquisition are estimated at $120 million. --Low single-digit decline in segment operating profit for the fiscal year, on a constant currency basis. Outer years grow at the low end of mid-single digits. --$750 million capex in 2015 including the Yoplait China plant, snack bar capacity and capacity for fiscal 2016 new products. --Fiscal 2015 cost savings include approximately $400 million from Holistic Margin Management (HMM) and $40 million from restructuring. Ongoing HMM savings continue and restructuring savings approach $300 million in fiscal 2017. --FCF below historical average in 2015 results in share repurchases as noted above being partially debt financed. FCF improves over forecast period as cost savings ramp up and cash charges decline. Future developments that may, individually or collectively, lead to a negative rating action include: --A negative rating action could occur if operating earnings remain under pressure and debt reduction does not occur, resulting in a sustained period of leverage (total debt-to-operating EBITDA) greater than approximately 3x and weakening FCF. Future developments that may, individually or collectively, lead to a positive rating action include: A ratings upgrade is unlikely in the near- to intermediate-term but could occur in the long term if the company commits to maintain leverage in the low 2x range while generating FCF at historical average annual levels or higher. A commitment to refrain from large debt-financed share repurchases or acquisitions would also support an upgrade. Fitch currently rates General Mills and its subsidiaries as follows: Additional information is available at 'www.fitchratings.com'. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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