The packaged food manufacturers' ability to raise and maintain prices to offset rising commodity costs will be a key test of the shifting of power to the retailer. Moreover, escalating costs have negatively impacted the small and midsize food companies more than their larger counterparts due to the smaller companies' higher proportion of fixed-costs and limited economies of scale.
More Quotes from Ronald Neysmith:
The introduction of new products has mitigated the shift toward private-label products that generally occurs in a rising cost environment. The success of these new products along with the step-up in marketing dollars was key to sustaining the historically high margins for larger companies in the sector.Ronald Neysmith
We expect that Del Monte will apply its free cash flow to debt reduction over the intermediate term to improve credit measures to those more commensurate with the current rating. The rating could be lowered if Del Monte is unable to reduce leverage as planned.
Ronald Neysmith
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Based on Topics: Power QuotesBased on Keywords: counterparts, escalating, impacted, midsize, packaged, retailer
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