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The Supply Side: Wal-Mart supplier community news briefs

Butterball acquires Gusto Packing

Butterball LLC acquired Montgomery, Ill.-based Gusto Packing Co. which includes the company’s leadership team and approximately 500 employees. Gusto produces six product lines – Hickory & Apple Wood smoked bacon, bone-in smoked pork and turkey products, smoked boneless hams, cooked hams, pork and turkey deli meats plus spiral sliced hams.

“With Gusto’s 260,000-sq.-ft. facility, we are adding approximately 325 million lbs. of further-processed capacity to our operations,” said Rod Brenneman, Butterball CEO. “This additional capacity allows us to support Butterball-branded geographic expansion and achieve greater account penetration within current markets. It also affords us the ability to develop and manufacture innovative products for the Butterball brand.”

The acquisition provides Gusto an opportunity to benefit from a national logistics and distribution network and further enhance quality and food-safety initiatives, according to Brenneman.

North Carolina-based Butterball is the largest turkey product producer in the US – producing more than 1 billion pounds of turkey per year. Butterball has a processing plant and sales office in Northwest Arkansas.

• Pinnacle Foods to launch an initial public offering
Pinnacle Foods confirmed it hopes to raise $100 million with an public share offering announced last week.

The New Jersey-based food company is backed by private-equity firm Blackstone Group, and manufactures packaged foods under its Birds Eye frozen foods and Duncan Hines grocery brands and owns labels including Vlasic, Van de Kamp's and Mrs. Butterworth's.

Blackstone will continue to own a majority of its voting shares after the IPO is completed.            

Pinnacle Foods operates a manufacturing facility in Fayetteville and maintains a sales office in Bentonville as a supplier to Wal-Mart Stores Inc.

• Archer Daniels Midland sells business unit
In a strategic move to use its resources in more profitable areas, agri-business giant Archer Daniels Midland Company recently sold its 23% stake and other interests back to Mexican Corn Flour producer, Gruma S.A.B. de CV.

The deal fetched Archer Daniels $450 million, as well as an additional amount – up to $60 million – over the next 42 months on the fulfillment of certain conditions.

Archer Daniels has local sales offices in Northwest Arkansas.

• Nestlé Waters inks deal
Changes are on tap at Nestlé Waters North America as the company recently signed a five-year contract making it the exclusive water supplier for Dunkin' Donuts and Baskin-Robbins restaurants nationwide.

Nestlé Waters is the nation’s leading bottled water company with 15 brands making it the third largest non-alcoholic beverage company by volume in the U.S.

The beverage company also said beginning Jan. 1, it will takeover the manufacturing and distribution of its iced tea brand NESTEA®., which was previously manufactured and distributed by The Coca-Cola Company as part of a joint venture with Nestlé.

NESTEA will be available in most major grocery, convenience and drug stores in the following flavors and varieties: Iced Tea with Lemon, Diet Iced Tea with Lemon, Iced Tea with Raspberry, and Red Tea with Pomegranate Passionfruit.

Nestlé operates a large sales office in Rogers and is a major supplier to Wal-Mart Stores Inc.

• Kraft Foods bets on bold flavors
Kraft Foods has revved up its innovation pipeline to bring more than 40 new products to the family table in 2013. Each has been developed to satisfy consumers' appetites for bold flavors, flexible eating patterns and simpler product recipes while still delivering great quality and value, according to the release.

"Bland and boring do not cut it anymore," said Barry Calpino , Vice President, Breakthrough Innovation, Kraft.  "We're seeing an all-out quest for fun, passion and adventure in food and beverages as people embrace a multitude of global and regional flavors. Culinary experimentation is 'in,' so everyone wants the flexibility to customize their food. Our latest innovations are fun, great-tasting products that meet those needs and are in sync with today's lifestyles." 

The full list of the new products can be found in the release.

Kraft operates a large sales office in Bentonville and is a major supplier to Wal-Mart Stores Inc.

• Epson mourns death of retail leader
Epson America announced today (Jan, 2)  that Barry Wise, a long-time consultant and retail industry leader, passed away on Dec. 28, 2012 following a brief illness.

“He was a one-of-a kind visionary who made an indelible mark in the retail technology industry,” said Mike Helm, Director of Sales for Epson’s Business Systems Division and long time colleague of Wise. “Barry was passionate and insightful about how technology could make a difference to retailers. He helped bring key Epson products to market over the years and forged partnerships that made a significant impact on our business. Epson has lost a dear friend and a valuable partner,” added Helm.

As President of Wise Retail Consulting, Wise’s knowledge and expertise were well recognized in the retail technology industry. He worked behind the scenes in support of industry standards and initiatives for Epson at National Retail Federation and he was a founding member of ARTS (the Association for Retail Technology Standards) and served on the advisory council for the NACS (National Association of Convenience Stores) Standards Committee.    

• East and Gulf Coast port strike averted
Retailers breathed a sigh of relief last week as the  International Longshoremen’s Association and United States Maritime Alliance agreed to extend their contract negotiations for an additional 30 days averting the closure of major shipping ports.

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“We welcome the news that a contract extension has been reached. However, we continue to urge both parties to remain at the negotiating table until a long-term contract agreement is finalized,” said Matthew Shay, CEO of the National Retail Federation.

“While a contract extension does not provide the level of certainty that retailers and other industries were looking for, it is a much better result than an East and Gulf Coast port strike that would have shut down 14 container ports from Maine to Texas.

“A coast-wide port shutdown is not an option. It would have severe economic ramifications for the local, national and even global economies and wreak havoc on the supply chain.

He said following the devastation of Hurricane Sandy and the recent eight-day port strike in Los Angeles and Long Beach, this extension is a welcomed sign to the entire supply chain community – from manufacturers to retailers – that the two sides understand the risks of a shutdown and are listening to the concerns of the shipping community.

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