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Belgian Bulcke accepts challenge of heading Nestle

BY Jenna Duncan

VEVEY, Switzerland Paul Bulcke, former executive vice president and director for Zone Americas: United States of America, Canada, Latin America, Caribbean for Nestle has been named the successor to departing chief executive and chairman, Peter Brabeck.

Bulcke told the media that he was ready for the challenge of heading up the world’s largest food maker.

“I like action,” Bulcke told London’s Telegraph. “What you have to do, you do. If it looks simple that is good, because if it is not, then it doesn’t work.”

Bulcke’s strategy of simplicity relies on the company’s four key strengths and driving growth in four further areas; namely, Nestle’s product portfolio (29 brands), research and development, global presence and workforce. Nestle is also making strides in emerging markets, nutrition, premium products and the out-of-home market.

Bulcke said, “The vision of Nestle is to be the leading nutrition, health and wellness company in the world. When you have a good vision you don’t change it dramatically each year.”

Facing the rising costs of commodities, Nestle’s approach has been to cut costs, reformulate products and pass on price increases early. Bulcke said that he believes prices will normalize in the near future, and that there is no “economical reason why the price of a product doubles in two months.”

One of Brabeck’s last moves before leaving his spot as chief executive officer was to sell Nestle’s majority ownership in eye-care business Alcon to Novartis for almost $39 billion.

For the first quarter ending in 2008, Nestle reported growth of 9.8 percent as a group, and 9.8 percent in food and beverage along. Nestle currently employs about 280,000 worldwide.

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Supervalu and Safeway beef up organics

BY Doug Desjardins

MINNEAPOLIS Supervalu and Safeway both reported profitable quarters and announced plans to ramp up store remodels in 2008. Supervalu also rolled out its first private-label line of organic products, while Safeway is planning to expand its O Organics line to other retailers.

Supervalu debuted Wild Harvest organics in April with an initial rollout of 150 items, including milk, eggs and produce. The chain expects to eventually expand the line to 300 products. Supervalu chief executive officer Jeff Noddle said Wild Harvest is part of a plan to increase its private-label profile. “We plan to increase our private-label mix from 15 percent to 17 percent by 2010,” Noddle said.

For its fourth quarter, Supervalu reported a 1 percent jump in total sales of $10.39 billion and $156 million in earnings, a 30 percent increase from last year. Total sales for fiscal 2008 were $44 billion, which were on track with previous forecasts.

Supervalu did not break out pharmacy numbers for the year, but it’s estimated that its 922 pharmacies generated more than $3.2 billion in sales. Noddle did touch on Supervalu’s new ARx system, which was implemented chainwide in February and unified all of Supervalu’s pharmacies.

“Our ARx system replaced four separate platforms and now allows our pharmacies to deliver things like the electronic transmission of prescriptions,” Noddle said. The new system also makes it easier for customers to reorder prescriptions and check their refill status using the ARx 24-hour telephone refill system.

Supervalu also has 165 remodels planned for the year, including 37 for Albertsons stores in California, 25 for Jewel-Osco in the Chicago area and 21 for Shaw’s Supermarkets in New England. Some remodels will feature a new format with pharmacies at the front of the store.

Safeway last month also reported a profitable quarter and unveiled ambitious plans to expand its organics line to other retailers, as well as open a new small-format prototype store by the end of June.

Safeway chief executive officer Steve Burd said the chain plans to have other retailers carry its O Organics line by the end of the year, though he didn’t identify any retailers by name. Safeway launched O Organics in 2006 and expects the line to generate $400 million in sales this year after producing $310 million in 2006. The line includes packaged foods, produce and cereal.

Burd also confirmed plans announced earlier this year to open a smaller format supermarket during the first half of this year. No details have been released, but Safeway expects the first store to open by the end of June. The move is considered a reaction to Tesco’s opening of 62 small Fresh & Easy stores on Safeway’s turf in California and the Southwest.

For its first quarter, Safeway reported net income of $193 million compared with $174 million during the same period last year. Total sales for the quarter were $10 billion compared with $9.3 billion last year. Same-store sales for the quarter increased 2.9 percent.

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Brown rice accepted by FDA as whole grain

BY Michael Johnsen

ARLINGTON, Va. Brown rice, a 100 percent whole grain food, joins the recognized ranks of healthful whole grains, according to an announcement this week from the Food and Drug Administration that will allow brown rice food labels to bear the whole grain health claim, the USA Rice Federation announced Thursday.

Consumers can now be on the lookout for brown rice labeled with the FDA whole grain health claim: “Diets rich in whole grain foods and other plant foods and low in total fat, saturated fat and cholesterol may reduce the risk of heart disease and some cancers.”

“Rice is the most popular grain around the world, which makes brown rice a great choice for increasing whole grain intake,” stated Joann Slavin, professor of Food Science and Nutrition at the University of Minnesota. “In the United States, where chronic diseases such as heart disease and cancers are common, encouraging whole grain brown rice consumption could have a significant public health impact.”

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