Branded Foods: Category Profitability
$2,950.00 – $4,250.00
CST Consulting has gathered over 200 operating profit margin figures for branded offerings to inform our estimates of profitability in 85 US Food and Beverage categories.
- 67 food category operating margins
- 18 beverage category operating margins
- 27 market size figures and charts for context
- 21 market share tables and charts
And, ground-breaking statistical analysis conclusively identifying WHY some categories have significantly higher profitability for branded offerings than others
HOW companies, private equity firms, and commercial lenders can out-perform their competitors with this study includes:
- Best-in-Class screening of new investment/acquisition proposals for fit with categories having acceptable operating profit margins
- Using PROVEN profitability “norms” in the category of interest to cross-check projections for start-ups, turnarounds, and changes in strategic direction
- Unique de-risking of investment decisions by understanding the stability of category structure: how likely are current levels of profitability to be maintained, increase, or decrease?
- Identification of attractive “White Space” opportunities to support brand extension and new product development assessments. For example……
“It is clear with this study WHY McDonalds has targeted their entry into retail grocery with coffee with their McCafe brand.
We can also see WHY Coke can be expected to rapidly enter the US retail grocery business with their own ready-to drink coffees (or even more likely, acquired brands or partnerships), following their $5 billion acquisition last year in Europe of the Costa coffee company
It is less clear if the Pepsi-Starbucks ready-to-drink coffee alliance in the US will be maintained in light of the Nestle-Starbucks grocery marketing arrangement: if not, Pepsi will need its own “play” in the category”
- Modeling competitors’ likely sources of profitability from adjacent categories, and their ability to aggressively defend or attack based on their overall portfolio strength
3.1 Preparation
Strategic Assessment
Feasibility Assessment
Transaction Preparation
Confidentiality
3.2 Buyers
Identifying Potential Buyers
Private Equity
3.3 Process Alternatives and Timeline
Two-Stage Auction Process
One-Stage Auction Process
Negotiated Transaction with One Party
3.4 Auction Process
Information Memorandum
Non-Binding Letter of Interest (or Indication of Interest)
Management Presentation
Due Diligence Inquiries
Governance Process
3.5 Contracts
Contract Features
Negotiating the Contract
Transition Services
3.6 Closing Requirements
Closing Requirements
Competition Authorities
3.7 Special Topics: Material Divestitures and Insider Sales
3.8 Special Topics: Spin-offs, Split-offs, Merger and Split-off
4.1 Preparation
Candidate Screening, Fit
Financial Constraints/Valuation
4.2 Approach
Initial Contact
Confidentiality Agreements
4.3 Due Diligence
Organization
Checklists: Corporate Matters, Management and Operations, Financial Matters, Legal Matters, Employee Matters, Insurance, Real Estate/Equipment/Personal Property, Intellectual Property, Market Research, Marketing and New Products, Sales and Distribution, Manufacturing/Safety/Environmental, Information Systems, Taxes
Read-Out Process
4.4 Pre-Closing Period
4.5 Special Topics:
Public Company Acquisitions
Stock versus Asset Purchases
5.1 The Steering Committee
5.2 Integration Advisors Selection
5.3 Personnel
Acquiring Company
Target Company
5.4 Competitively Sensitive Data
5.5 Integration Work Stream: Synergies
5.6 Integrating Cultures
5.7 Day One
Planning and Day One Checklist
Critical Process Planning and Day One Testing
Issue Tracking and Resolution on Day One and Post Closing
5.8 Integration Budgets
9.1 Identification and Appointment
9.2 Confidentiality
9.3 Project Management
9.4 Investment Banks
9.5 Accounting Firms
9.6 Law Firms
9.7 Environmental/Safety Consultants
10.1 Organization and Hiring
10.2 Authority and Standards/Consistency
10.3 Corporate Development Group Responsibilities
Sample “Teaser”/ “One Pager”
Sample “short form” Confidentiality Agreement
Sample “long form” Confidentiality Agreement
Sample Process Letter from Seller
Sample Auction First Round Letter from Seller
Sample Non-Binding Indication of Interest from Buyer
Sample Logistics Letter for Management Presentation
Sample Auction Second Round Letter from Seller
Sample Final Bid Letter from Buyer Fairness Opinion