Divestment was a recurring move in 2004 as the world’s top food and drink companies focus on their brands. With the maturity of markets in western Europe and North America, large-scale acquisitions have also dropped compared with previous years. Despite the tough economic climate, the leading companies showed resilience with the top ten suppliers posting a 6.3 per cent growth in the first quarter of 2005.
Elsevier Food International Vol.8, No.2, May 2005 Jonathan Thomas

The tough economic climate has prompted the world’s top food suppliers to press the divestment button in 2004, a move that proved beneficial as the top ten suppliers reaped a 6.3 per cent growth in the first quarter of this year. Leatherhead Food’s latest ranking showed little change in the elite group with Nestlé still keeping the lead. A return to core brands, however, is a recurring strategy among the frontrunners.

A growing number of the world's leading food and drink suppliers are now focusing upon core brands and business areas. This has led to a number of sizeable divestments occurring within the last year, and subsequent movements in the ranking of the top 100 food groups worldwide. The number of large-scale acquisitions has fallen compared with a few years ago, due in part to the maturity of many sectors of the global food and drinks market, especially within regions such as western Europe and North America.
Nevertheless, much of the recent evidence illustrates the fact that the world's leading food groups are getting progressively stronger. As of the first quarter of 2005, food and drink sales from the world's top ten suppliers amounted to more than US$298.8 billion. This represents an increase of almost 6.3 per cent compared with the previous year.

Divestment
One company which has recently sold off parts of its empire is Kraft Foods, which has now slipped to third position in the ranking. With food sales worth almost US$32.2 billion in 2004, the company has been overtaken by oilseed and corn processor Archer Daniels Midland Company, whose turnover increased by almost 18 per cent during the same period to more than US$36.1 billion. Kraft's largest divestment has been the sale of its sugar confectionery business, which was bought by Wrigley at the end of 2004 for around US$1.48 billion. In recent months, Kraft has also sold its UK-based desserts operations.
Nestlé retains its position as the world's leading food and drink manufacturer. During 2004, the Swiss company's food sales increased by more than six per cent to reach US$65.57 billion, boosted by a number of acquisitions made in areas such as bottled water and ice cream. At the end of 2004, Nestlé strengthened its position in the frozen pizza market with the acquisition of the German company Wagner Tiefkühlproduckte GmbH. As a result of such deals, Nestlé can be expected to retain its position at the head of the ranking for the foreseeable future.
Within the last year, PepsiCo has leapfrogged Unilever into fourth position. During 2004, its turnover increased by almost 8.5 per cent to US$29.26 billion, assisted by significant product development in areas such as fruit juices and carbonated soft drinks. In contrast, Unilever has been selling off a number of non-core businesses of late, which is likely to result in a small decrease in turnover. Recent examples have included the Ambrosia desserts brand in the UK and its frozen pizza and baguette business, the sale of which to the Oetker Group was announced at the end of 2004.
This process of divestment has continued into 2005. General Mills has recently announced the sale of its Lloyd's range of barbecue dishes and accompaniments, while Danone is to sell off its UK-based sauces business. Further down the ranking, Sara Lee (which lies just outside the top 20) is believed to be considering divesting a number of business areas, which include both meats and coffee.
A programme of divestment has also resulted in the disappearance of the Dutch company Numico from the ranking. Although it still supplies baby foods, Numico has now exited from sectors such as sports nutrition and vitamins. New companies to enter the ranking within the last year include Fromageries Bel and Schrieber Foods, which are based in France and the US respectively. Both are major players within the world dairy products industry.

Mergers
It should also be noted that although large-scale mergers have been less common of late, the possibility of major food and drink suppliers acquiring each other still remains. As an example, two dairy giants - namely Arla Foods and Campina - have proposed a merger. If successful (a decision on this is expected sometime within the first half of 2005), this would create a multinational dairy supplier named Campina Arla, with an annual turnover worth in the region of €10 billion.
Mergers have also featured within the brewing industry. During 2004, Interbrew agreed to merge with Companhia de Bebidas das Americas (AmBev for short), thereby creating a truly global brewer named InBev with a turnover worth almost €8.6 billion. At present, the two former entities are still presented separately on the ranking, since the new company has yet to produce any combined financials. In 60th position on the list is Molson Coors, which was created during 2004 by the merger between Adolph Coors of the US and Molson of Canada. Other brewers in the list, such as Carlsberg and Heineken, remain on the lookout for acquisitions in strategic parts of the world.

Advancing up the ranks
Some of the major movers within the last year have included Pilgrim's Pride, the US-based poultry producer. During the year ending September 2004, the company's turnover more than doubled to reach over US$5.36 billion, thereby propelling it up the list from 83rd spot to 47th. Much of this was due to the successful integration of the chicken processing operations formerly owned by ConAgra Foods. Another US meat producer, Swift & Company, managed a less dramatic advancement up the ranking. However, an increase of almost 18 per cent in total sales to nearly US$9.9 billion resulted in a move from 24th position to 23rd.
Another dynamic performer has been the Canadian company Maple Leaf Foods. This firm rose from 69th position to 51st, with its food sales increasing by more than 52 per cent to almost US$4.9 billion. Much of this could be attributed to the success of its bakery and meat products operations. Further down the list, the French company LVMH (which owns the Moët-Hennessy brand) rose from 91st position in the ranking to 81st. Sales of the company's wines and spirits increased by almost 19 per cent during the last year, thereby contributing towards its rise up the list.
On a regional note, US-based companies still appear to hold sway within the global food and drinks market. At present, 15 out of the top 25 companies in the ranking are headquartered in the US, with the remainder located either in Japan or western Europe. Many of the non-US companies have made advances up the ranking within the last year, due in part to the appreciation of many of the world's currencies against the dollar.

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Jonathan Thomas is principal market analyst at Leatherhead Food International (LFI). The latest ranking of the top 100 food groups forms part of the Global Food Markets (GFM) database, one of the many services offered by LFI. In addition, in-depth profiles for many of the companies featured in this ranking are also available on GFM. Further details can be found at www.globalfoodmarkets.com

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	Top 100 Food Groups
Rank	Company	Total Sales	Food Sales
		($m)	($m)
1	Nestle	69,862	65,575
2	Archer Daniels Midland Company	36,151	36,151
3	Altria Group Inc./Kraft Foods	69,963	32,168
4	PepsiCo, Inc.	29,261	29,261
5	Unilever	52,267	29,205
6	Tyson Foods	26,441	26,441
7	Cargill	62,907	24,000
8	The Coca-Cola Company	21,962	21,962
9	Danone	17,040	17,040
10	Mars	17,000	17,000
11	Diageo	16,318	16,318
12	Anheuser-Busch	14,934	14,934
13	Kirin Brewery Co.	15,300	14,690
14	ConAgra Foods Inc.	14,522	14,522
15	Heineken	12,445	12,445
16	Asahi Breweries	13,352	12,415
17	Cadbury Schweppes	12,363	12,363
18	Suntory	12,200	11,470
19	SABMiller	11,366	11,366
20	General Mills Inc.	11,070	11,070
21	Sara Lee Corporation	19,566	10,743
22	Dean Foods Company	10,822	10,511
23	Swift & Company	9,880	9,880
24	Kellogg Company	9,614	9,614
25	HJ Heinz Company	8,415	8,415
26	Smithfield Foods Inc.	8,248	8,248
27	Associated British Foods	9,477	8,114
28	Nippon Meat Packers	7,989	7,989
29	InBev	7,967	7,967
30	Fonterra	7,550	7,550
31	Arla Foods	7,950	7,474
32	Campbell Soup Company	7,109	7,109
33	Dairy Farmers of America	6,993	6,993
34	Scottish & Newcastle	8,147	6,884
35	Maruha	7,007	6,570
36	Parmalat	6,560	6,560
37	Ajinomoto	8,969	6,547
38	Danish Crown	7,410	6,331
39	Femsa	8,325	6,090
40	Lactalis	6,051	6,051
41	Carlsberg	6,010	6,010
42	CHS Inc.	10,909	5,808
43	Barilla	5,515	5,515
44	Allied Domecq	5,925	5,510
45	Royal Friesland Foods	5,534	5,483
46	Meiji Dairies Corporation	6,228	5,418
47	Pilgrim's Pride	5,364	5,364
48	Yamazaki Baking	5,810	5,345
49	Kerry Group	5,136	5,136
50	Bongrain	5,134	5,134
51	Maple Leaf Foods	4,896	4,896
52	Tate & Lyle	5,183	4,856
53	Hormel Foods Corporation	4,780	4,780
54	Dole Food Company, Inc.	4,773	4,773
55	McCain Foods Ltd	4,700	4,700
56	Bunge	25,168	4,676
57	Morinaga Milk Industry	4,879	4,586
58	AmBev	4,522	4,522
59	Hershey Foods Corporation	4,429	4,429
60	Molson Coors Brewing Company	4,306	4,306
61	Itoham Foods	4,250	4,250
62	Campina	4,427	4,427
63	Pernod Ricard	4,443	4,340
64	Tchibo	4,105	4,105
65	Nippon Suisan Kaisha	4,267	3,998
66	CSM	4,322	3,985
67	Sudzucker	3,840	3,840
68	Wm Wrigley	3,649	3,649
69	Grupo Modelo (Mexico)	3,600	3,600
70	Oetker Group	5,767	3,560
71	Constellation Brands	3,552	3,552
72	Grupo Bimbo (Mexico)	3,530	3,530
73	Interstate Bakeries Corporation	3,526	3,526
74	Sapporo Holdings	4,137	3,512
75	The Procter & Gamble Company	51,407	3,482
76	George Weston Ltd	23,060	3,335
77	Chiquita Brands International	3,072	3,072
78	Land O' Lakes Inc.	6,321	2,969
79	Nisshin Seifun Group	3,745	2,846
80	QP Corporation	3,481	2,845
81	LMVH	15,700	2,836
82	Keystone Foods	2,800	2,800
83	Perdue Farms	2,800	2,800
84	Nissin Food Products	2,761	2,761
85	Fosters Group	2,876	2,667
86	Sodiaal	2,953	2,642
87	Royal Wessanen	2,637	2,637
88	Nordmilch	2,615	2,615
89	Coca-Cola Amatil	2,540	2,540
90	McCormick & Company	2,526	2,526
91	Fromageries Bel	2,520	2,520
92	Saputo	2,471	2,471
93	Nichirei	4,284	2,442
94	Snow Brand Milk Products	2,745	2,360
95	Corn Products International	2,283	2,283
96	Prima Meat Packers	2,262	2,262
97	Schreiber Foods	2,200	2,200
98	Katokichi Company	2,371	2,182
99	Meiji Seika Kaisha	3,182	2,069
100	Glanbia	2,274	2,015

Source: Global Food Markets (GFM), Leatherhead Food International