Page 5 - Food & Drink Magazine Sep-Oct 2020

Freedom Foods appoints Michael Perich interim CEO
Heinz launches direct-to- consumer business
KRAFT Heinz Australia has launched a direct-to-consumer (DTC) channel, Heinz to Home. The e-store offers two pre-packed bundles of products including Heinz soups, Heinz sauces and condiments, and Heinz Baked Beanz & Pasta, which are then home delivered.
Kraft Heinz Australia CEO Simon Laroche said the Australian launch followed on from its implementation in the UK, providing consumers with an online one-stop-shop.
GlobalData said consumer comfort seeking is a retreat to brands that are ‘familiar’. GlobalData found that nearly half (49 per cent) of UK consumers are
currently trying to only buy from their favourite brands during the lockdown.
Euromonitor International said another big shift in consumer behaviour was that pre COVID-19, a leading consumer trend was about artificial intelligence becoming mainstream. Now, it is about choosing self-isolation and increased need for contactless services and delivery.
Statistics specialist Statista said e-commerce is expected to grow 14 per cent by 2021, meaning consumer packaged goods (CPG) manufacturers have to rise to the trend and invest in an omnichannel strategy.
In the US, PepsiCo launched its two DTC sites in under 30 days. PantryShop.com and Snacks.com werebuiltcompletelyinhouse, leveraging end-to-end capabilities built from the ground up by its ecommerceteam. ✷
MICHAEL Perich has been announced as the interim CEO for Freedom Foods Group, as investigations continue into how the company amassed more than $60 million in inventory write-downs and $10 million in bad debts.
The Perich family own 54 per cent of the business. They are Australia’s largest dairy farming family and became major shareholders in 2005.
The board said in the process of the operational review it became apparent that, “for the successful recapitalisation of the company there is a need for executive ownership and accountability to implement the operational turnaround.
“This cannot wait for an external search for a new CEO tobecompleted”.
It said Perich’s “deep understanding” of the business wouldprovidethestability,
focus and leadership needed to manage its issues.
In late June, there was the shock resignation of CFO and company secretary Campbell Nicholas, followed the next day by CEO and managing director Rory McLeod taking leave.
ThenextdayGroupchair Perry Gunner told investors the $25 million inventory write- downannouncedinMarchwas
more likely to be $60 million, with an increase to $10 million in bad debts and PwC and Ashurst being hired to investigate the situation.
Rory McLeod resigned on
29 June. The company announced a trading halt until 30Octoberon9July. ✷
FFG’s Shepparton facility has undergone majorexpansioninthelastfouryears.
NEWS
China Mengniu Dairy, Lion Dairy & Drinks sale collapses
THE proposed sale of Lion’s Dairy & Drinks business to China Mengniu Dairy Company has fallen through, with both parties walking away due to approval from the Foreign Investment Review Board (FIRB) being “unlikely”.
The proposed deal, announced in November 2019, was worth $600 million.
It would have signalled the full divestment of Lion’s Dairy & Drinks business, following the finalised sale of its speciality cheese business to Saputo Dairy Australia for $280 million in October 2019.
Lion and its parent company Kirin Holdings Company said FIRB approval was “unlikely to be forthcoming” and the decision to end the sale process was mutual. Lion was “disappointed” with the outcome and would now be looking at other options for the Dairy & Drinks business.
The sale would have included all white milk, milk-based beverages, yoghurt, juice and water icebrandsandassets.Dairy&Drinks’
international business, its share of joint ventures with Vitasoy Australia Products and Capitol Chilled Foods Australia, and the licensing agreement for the Yoplait brand were also part of the deal.
In February, the Australian Competition & Consumer Commission said it would not oppose the sale.
Dairy & Drinks’ manufacturing footprint in Australia spans 11 sites for milk, yoghurt and juice facilities. The portfolio includes Dairy Farmers, Pura, Dare, Farmers Union, Yoplait, Daily Juice, The Juice Brothers and Berri.
In a statement after the announcement federal treasurer Josh Frydenberg said: “I have been advised that Lion Dairy & Drinks and China Mengniu Dairy Company have mutually agreed to not proceed with the sale process. This follows the communication of my preliminary view to Mengniu Dairy that the proposed acquisition wouldbecontrarytothenationalinterest.” ✷
www.foodanddrinkbusiness.com.au | September-October 2020 | Food&Drink business | 5