Foreign grain-based foods companies experienced sharply weaker performance in 2018 to that of 2017, as 29 of the 39 companies tracked by Milling & Baking News, a sister publication of World Grain, recorded year-over-year decreases in share price while only 10 posted increases. By comparison, 23 companies recorded year-over-year increases in both 2017 and 2016, 19 posted increases in 2015, 25 companies posted increases in share price in 2014, and 32 companies posted year-over-year gains in 2013.
On the London Stock Exchange, Associated British Foods finished the year at 2043p, down 28% from 2820p in 2017 and compared with 2745p in 2016. Michael McLintock, who took over as chairman of ABF in 2018, in the company’s annual report said the company reported “a year of progress” in 2018 and continues to invest for the future of the business. McLintock said losses remained unacceptable at Allied Bakeries during 2018, although some progress was made with cost reduction programs and price increases.
Carr’s Group PLC’s share price closed at 150.75p in 2018, up 18% from 128p in 2017 and up narrowly from 149.38p in 2016. Chris Holmes, chairman of Carr’s, in the company’s annual report said Carr’s delivered a performance ahead of the board’s expectations and “significantly ahead” of the prior year. He said the company’s agriculture division benefited from investments made in 2017. Revenue in the agriculture division increased nearly 14% in 2018, while operating profit rose 20%.
Tate & Lyle PLC, the global sweetener company, had a 52-week low of 522.6p in mid-March and climbed to a high of 722.8p in early December, before ultimately closing at 660p, down from 703p in 2017. Tate & Lyle in May agreed to acquire a 15% equity holding in Sweet Green Fields USA LLC, a privately held global stevia ingredients company. Nick Hampton, chief executive officer of Tate & Lyle, said similar acquisitions could follow as the company seeks to broaden its portfolio.
Premier Foods, the U.K.’s largest food producer, finished 2018 at 33p, down 23% from 42.75p in 2017 and compared with 46.75p in 2016. As Premier’s stock price fell during the year, company executives indicated that it must accelerate its turnaround plan and conceded that nothing is off the table, including a potential sale of parts of the business. Additionally, Gavin Darby, the company’s CEO since 2013, announced his intent to step down on Jan. 31, 2019, under pressure from an activist investor.
It was a wild ride for Finsbury Food Group PLC. The U.K.-based maker of cake, bread and gluten-free bakery goods climbed to a 52-week high share price of 131p on May 9 before dropping sharply in July. The company’s share price rebounded temporarily in August-October before tumbling in November and December to close at 102.5p, which was down 5% from 108p in 2017. In September, Finsbury acquired Ultrapharm Ltd, a gluten-free bakery that produces a range of baked foods, including bread, buns, rolls and muffins.
Greggs PLC, an operator of retail bakery shops and cafes in the United Kingdom, started the year strong, at 1373p, but cratered in July, falling to a low of 942p. The company’s share price ultimately picked up momentum to finish the year strong at 1266, which was still down 10% from 1399p at the close of 2017.
The three leading U.K. retail chains sustained mixed share price moves during the past year. Tesco, the leader in U.K. food retailing, closed at 190.1p, down 9% from 209.25p a year ago, while Marks & Spencer fell 21% to finish the year at 247.2p. Sainsbury, PLC, which closed the year at 265p, was stronger, up 6% from 241.4p.
In Ireland, Greencore Group PLC, a European maker of convenience food and malt products, finished at 178.2p, down 22% from 229.7p in 2017. In October, Greencore sold its U.S. subsidiary, Greencore USA, to Hearthside Food Solutions for $1,075 million. The transaction followed earlier comments from Patrick F. Coveney, CEO of Greencore, indicating that profitability in the U.S. business had been failing to meet expectations set out for the unit in October 2017.
Kerry Group finished the year at €86.5, down 7.5% from €93.5 in 2017 but up from €67.67 in 2016. In December, Kerry reached an agreement to acquire two U.S.-based food seasoning companies for €325 million ($367 million). Ariake USA, the North American business of Ariake Japan Co., produces clean label savory taste solutions derived from poultry, pork and vegetables at its facility in Harrisonburg, Va. Southeastern Mills North American coatings and seasonings business (SEM) manufactures coatings and seasonings at its manufacturing base in Rome, Ga. Just a few months earlier Kerry agreed to acquire Fleischmann’s Vinegar Co. and AATCO Food Industries, LLC in two separate transactions valued at a combined €365 million ($414 million).
Origin Enterprises, a food and agribusiness group based in Dublin, finished the year at €5.73, down 10% from €6.34 in 2017 and compared with €6.35 in 2016.
In Australia, GrainCorp Ltd. closed the year at A$9.17, up 12% from A$8.19 in 2017. The company’s stock price fluctuated throughout the year, falling as low as A$7.23 in early February before rebounding to climb as high as A$9.38 in mid-December. As of mid-December the company was waiting for a “more certain proposal” from Long-Term Asset Partners (LTAP) before it moves forward with recommending a potential deal to its shareholders, Graham Bradley, chairman of GrainCorp, noted in a Dec. 19 letter to shareholders. GrainCorp earlier in December said it was in the midst of reviewing a potential takeover bid from LTAP that included an acquisition via a scheme of arrangement, of 100% of the shares in GrainCorp for cash consideration of A$10.42 per share. LTAP is an asset manager for a trust whose beneficiaries are Australian investors.
Nutrien Ltd., which was formed in January 2018 as a merger of Agrium Inc. and PotashCorp., closed 2018 at C$64.12. The company’s stock fell as low as C$55.68 in mid-February before climbing as high as C$76.12 on Aug. 9.
In France, Groupe Danone S.A., the country’s largest food and beverage company, closed 2018 at €61.51, down 12% from €69.95 in 2017. Danone in April introduced a set of nine long-term goals for the company and its brands. Aligned with the United Nations 2030 Sustainable Development agenda, the Danone 2030 Goals embed the business, brand and trust models of the company to drive long-term sustainable value creation and deliver the company’s "One Planet. One Heath" vision.
In The Netherlands, Unilever, the Anglo-Dutch food and personal products business, closed 2018 at €47.42, up narrowly from €46.955 in 2017. Alan Jope has been named chief executive officer of Unilever P.L.C., effective Jan. 1. He succeeded Paul Polman, who retired after nearly 10 years as CEO of the company. Polman worked in the consumer goods industry for almost four decades, including the past 10 years as CEO of Unilever. During his tenure, the company said Polman delivered consistent top- and bottom-line growth ahead of its markets. The company also last fall reversed a decision to close its London headquarters. The company earlier in 2018 had unveiled plans to simplify its dual-headed legal structure, including plans to make Rotterdam, The Netherlands, its only headquarters. But shareholder criticism of the initiative led Unilever to rethink its decision.
Ahold, the Dutch-based company with global food retailing and food service operations, finished the year at €22.075 up 20% from €18.335 in 2017, while DSM, the Dutch chemical company with food ingredient interests, decreased 10% to €71.44 from €79.67 in 2017.
Corbion finished lower in 2018, falling to €24.46 from €27 in 2017. In November, Corbion celebrated the grand opening of its North American headquarters and lab facilities. The new applications and analytical labs as well as demonstration kitchen enables product development and testing across all the industries Corbion touches on. Corbion’s new bakery research and applications labs gives the bakery team and customers the tools to test its ingredients and customer formulas across a wide range of bakery applications: tortilla, bagels, artisan bread, pan bread and sweet goods. The lab has several different styles of mixers, including both batch and continuous, a fryer, and several different kinds of ovens. The company designed the lab to efficiently test across bakery products and mimic bakery processes from bench work to commercial production.
In Switzerland, Nestle S.A., the world’s largest food company, closed at 79.8 Swiss francs, down 5% from 83.8 Swiss francs in 2017. In April, Nestle completed the sale of its Nestle USA’s confectionery business to The Ferrero Group in a transaction valued at approximately $2.8 billion. The company also inaugurated the Nestle Product Technology Center in Bridgewater, New Jersey, U.S., putting a wrap on the completion of a three-year, $70 million investment to establish a global research and development hub.
Aryzta A.G. closed 2018 at 1.089 Swiss francs, down sharply from 38.65 Swiss francs in 2017. Acknowledging that fiscal 2018 was not a good year, Aryzta has stabilized its business and is focused on Project Renew, an initiative centered on “a clear focus on customer, the market, operations and rigorous financial controls, a back-to-basics strategy, which is narrow and deep.” Launched in June, Project Renew aims to enable a three-year cost reduction of €200 million during fiscal 2019 to fiscal 2021, including operating model cost reductions, procurement and supply chain initiatives, and automation initiatives.
Share price movement in Japan was weaker during 2018. Nisshin Seifun, the Japanese holding company that includes Nisshin Milling, Japan’s largest flour miller, closed at Y2271, down narrowly from Y2276 in 2017.
Nippon Flour Mills Co. Ltd. increased 6% for the year, rising to Y1836 from Y1728, but Nissin Foods Holdings, a leading manufacturer of instant noodles, decreased 16% to Y6900 from Y8230. In July, Michael J. Price was promoted to president and chief executive officer of Nissin Foods USA. He succeeded Al Multari, who retired on Oct. 1.
Baking leaders Yamazaki Baking and First Baking Co. Ltd. were mixed in 2018. Yamazaki closed at Y2306, up 5% from Y2197 in 2017. First Baking, meanwhile, finished at Y998, down 18% from Y1218 in 2017.
Olam International, which supplies food and industrial raw materials to more than 13,800 customers worldwide, finished at 1.65 Singapore dollars, down from 2.03 Singapore dollars in 2017.
Wilmar International, which operates in four segments — tropical oils, oilseeds and grains, sugar and others —, increased 10% to 3.12 Singapore dollars from 3.09 Singapore dollars in 2017.
Indonesia’s Indofood, one of the largest food producers in Asia, decreased 2% to R7450 from R7625 in 2017.
South Africa-based Tiger Brands Ltd. fell in 2018, finishing at R27378, down 41% from R46000 in 2017.
Egyptian companies engaged in flour milling were mostly lower in 2018, led by a 53% decline at Alexandria Flour Mills and Bakeries Co. Other declines included South Cairo and Giza Flour Mills, down 35%; Middle Egypt Flour, down 11%; Egyptian Starch, down 11%; North Cairo Flour, down 26%; and Upper Egypt Flour, down 19%. Middle and West Delta Flour Co., meanwhile, was up 33%, while East Delta Flour Co. was up 28%.
In Africa, Flour Mills of Nigeria P.L.C. decreased 20% after increasing 57% in 2017. Flour Mills Nigeria is primarily involved in flour milling, pasta production and cements production.
In Spain, Ebro Foods shares fell 11% to €17.44 from €19.52 in 2017.