The ranking of the world's Top 100 food companies has changed little over the course of 2003. Although familiar names retain their hold on the top ten, 2003 presented a mixed picture with some companies advancing in the ranks due to the dollar's weakness, while others gained ground through acquisition activity.
Elsevier Food International, Vol. 7, Number 2, May 2004
Jonathan Thomas

Netlé remains the world's leading manufacturer of food and drink, with sales worth more than US$61.6 billion in the year ending December 2003. Food and drink now accounts for over 94 per cent of the company's overall turnover, although sales declined by almost 1.4 per cent during the course of the year. Much of this was due to the maturity of many of the company's markets, as well as global economic weaknesses, with falling sales of confectionery and pet foods.
Second-placed Kraft Foods posted a rise in turnover of more than 4.3 per cent during the same period, although it still trails Nestle by a considerable margin. The picture was rather mixed for other leading food manufacturers, with some companies advancing their position due to the weakness of the dollar against currencies such as the euro. An exception to this rule was Archer Daniels Midland Company, which saw its turnover increase by almost 31 per cent in the year ending June 2003. This was partly due to its recent acquisition and expansion activity, such as the purchase of UK- based Van den Bergh Oils business from Unilever Bestfoods, As a result, Archer Daniels Midland Company has now moved from fifth place in the world to third.

 Top 100 Food Groups

Biggest movers
Aside from this, the position of the companies in the top ten has changed little over the course of the last year. One of the year's biggest movers has been Cadbury Schweppes, which now lies in 16th position, with food sales worth over US$10.5 billion. This company has been increasing its global presence via acquisition in recent years, which culminated in the £2.7 billion purchase of the Adams confectionery business from Pfizer Inc. at the end of 2002. In the process, Cad bury became the world's second largest supplier of chewing gum and increased its turnover by almost 22 per cent.
A couple of other UK firms have also advanced up the ranking within the last year. In the brewing sector, Scottish & Newcastle has moved from 48th position to 30th, with beer sales having increased by over a third (35.8 per cent). Again, much of this can be attributed to recent acquisition activity. Scottish & Newcastle has been expanding its presence in regions such as northern Europe (via the acquisition of Hartwall), China and India. Scottish & Newcastle is also placing increasing emphasis on its beer business, having completed the sale of its pub retail estate at the end of 2003.
Allied Domecq has also moved up the list, from 50th to 43rd, due to an increase in turnover of almost ten per cent. In recent years, the company has expanded its wine interests by acquiring businesses in Argentina and the US, and has also strengthened its position in the global spirits market by acquiring the Malibu brand. The US brewer Adolph Coors has also improved its ranking, largely because of its purchase of a number of former Bass brands in the UK.
The biggest rise within the last year has been recorded by Bunge, which advanced from 97th position to 76th. Bunge has recently become the world's largest soybean processor, largely as a result of its successful purchase of Cereol in 2003. Bunge's food sales increased by almost 39 per cent in the year ending December 2003, although the company did sell many of its food processing operations at the time of the Cereol purchase to focus on soybean processing. Following a brief absence, Chiquita Brands International has reappeared on the list, with food sales worth more than US$2.6 billion in the year ending December 2003. The company has now emerged from Chapter 11 bankruptcy, having reduced its debt levels and also sold off its canned vegetables business. Another relatively new entrant is Constellation Brands, which has become a major force in the world drinks market. The company is now the second largest winemaker in the US, and also operates in the spirits market. Its sales have risen to over US$2.7 billion, assisted by joint venture activity with BRL Hardy and the acquisition of various wine brands in the US and Chile.

Fallouts
In contrast, a number of other food and drink suppliers have either fallen down the list or disappeared from the ranking altogether. International MuItifoods Corporation, the US producer of baking mixes and frozen batters, has seen its sales fall to less than US$l billion. During March 2004, it was announced that the company was to be sold to the J M Smucker Company. Combined sales for the new entity are estimated at more than US$2.3 billion, with the result that it may well break into the top 100 during 2004.
Numico has also fallen down the list, from 65th to 71st. Food sales declined by more than 20 per cent during 2003, mainly as a result of its divestment strategy. Within the last year, Numico has sold off subsidiaries such as Rexall Sundown and Unicity Network, as well as the former General Nutrition Companies (GNC) business. GNC was sold to leave Numico free to concentrate on its core areas of baby foods and clinical nutrition, which means that Numico is likely to experience a further fall. The same can also be said about Procter & Gamble, which currently has food sales worth in the region of US$3.2 billion. At the start of April 2004, the company sold its juice brands - namely Sunny Delight and Punica - to a private equity firm, although Procter & Gamble is likely to increase its focus on areas such as savoury snacks and coffee.
The next year is also likely to witness the disappearance of the US-based agricultural co-operative Farmland Industries from the list. During 2002, the company filed a voluntary petition for reorganisation under Chapter 11 of the Bankruptcy Code. Farmland has since reduced its workforce and is selling off various parts of the business, such as its beef packing operations.

Growth plans, alliances
Most of the world's leading food groups are consolidating their position at present, with the level of acquisition activity having fallen slightly, in line with the global economic situation and lower investor expectations. Some have recently announced plans to restructure operations in a bid to cut costs. In some instances, this has led to the closure of plants and a reduction in workforce numbers.
Two of the most notable examples of this trend have been Kraft Foods and Cad bury Schweppes. Kraft is currently pursuing a four-point sustainable growth plan, part of which involves restructuring and the closure of up to 20 production facilities worldwide. Although these measures are likely to reduce the company's workforce by up to six per cent, Kraft is hoping that significant funds can be released for innovation efforts. Elsewhere, Cad bury
Schweppes has engaged in an initiative named Fuel for Growth, which aims to cut coasts b yup to £400 million per annum by 2007. This move is expected to result in the closure of a fifth of its production facilities worldwide, reducing its workforce by around ten per cent.
Another notable trend amongst manufacturers has been the continued interest in healthier food and drinks. This has been reflected in the high level of new products activity in this area, with sectors such as functional foods, organic foods and more specialised items such as low-carbohydrate foods well to the fore. The growing popularity of the Atkins diet amongst consumers in the US and UK has resulted in several new product developments amongst the world’s leading food groups. Unilever Bestfoods, for example, has extended several of its main brands- such as Hellmann’s mayonnaise and Lipton tea- into the low-carbohydrate sector, following the launch of the Carb Options range at the start of 2004.
Danone has announced details of an alliance with the Japanese company Yakult Honsha, designed to strengthen their respective positions in the area of probiotic products, as well as explore possible new markets worldwide. Other activities in this area includde Coca-Cola’s launch of Minute Maid Premium HeartWise, an orange juice that contains plant sterols and assists in fighting cholesterol levels, and Campbell Soup’s move into organic foods markets.