How To Make Safe & Healthy Food For Your Dog
Are you like me and afraid to feed your dog ANY commercial dog food? How can we trust the dog food industry now? How do we
know if any of the dog food on shelves in the stores is safe?
I’ve been feeding my dog, Puddles, those small cans of chicken and small can of sausages. I’ve also been feeding her bologna and
hot dogs.
Frankly, this is getting too expensive for me. Puddles is a big dog with a big appetite! I’ve been searching the internet for information on how to make my own dog food, and I found a great source! His name is John Miller, and you can immediately download tons of healthy recipes. I am so relieved I found this! Have you been reading the labels on all the dog food bags in the stores to check for wheat gluten like I’ve been doing? What about just wheat? Wheat is in many of the dog foods.
Are you thinking that the dog food industry is maybe not telling us everything? I don’t want to give my dog any food that has any kind of wheat in it at all! That’s why I wanted to find recipes to make homemade food for Puddles, so I can feel good about what she’s eating and I know she’s safe and healthy. I know it’s takes a little more time and effort to make your own dog food, but I feel like my dog, Puddles, is worth it. Isn’t yours?
Organic Food
Organic food is the food produced without using any type of chemicals. The food industry processes it without additives. In the year 2000, the National Organic Standards Board of the US Department of Agriculture (USDA) supplemented non-organic food with organic. The food industry produces organic food without using sewer-sludge fertilizers, pesticides and synthetic fertilizers, growth hormones, genetic engineering, antibiotics and irradiation.
For an organic certification, the food has to pass through a series of tests, and it comes with a process fee. The US Department of Agriculture regulates this procedure. This food contains 50 per cent of additional nutrients, vitamins and minerals as compared to any other food.
Organic food does not stand for natural food. However, natural food may contain organic or refined food. The food industry has labeled organic food as ‘organic’ that meets the organic standards of USDA. Food agencies in the world claim that this food is better for consumers than the ordinary non-refined food. Consumers worldwide are switching to such type of food, which is more nutritious and safer.
Advantages:
Meat farming in an organic manner provides many benefits. It is tastier, nutritious, additive-free and healthier for people. It is also Genetically Modified (GM) and Bovine Spongiform Encephalopathy (BSE) free. The law of Europe disallows using genetically modified organisms (GMO) in any phase of farming and organic food.
At the time of modifying an organism genetically, the food industry uses genes from other species. This is for providing benefits such as speeding up growth, increasing yields, and making the organism pest-resistant. Most people feel sensible for not to include GM food in their diet.
The neural disease in farm animals Bovine Spongiform Encephalopathy (BSE), which is likely to cause a similar disease Creutzfeld Jacob Disease (CJD) to humans, was a result of feeding livestock with food containing animal proteins. Such feeding practices are not natural and they cause diseases such as BSE.
Studies reveal, providing animals with food that is organic in nature, assures them good growth, reproductive health, resistance from illnesses and more chances of survival than the animals that are given non-refined food.
This food is environment-friendly and is usually grown for animals avoiding the use of artificial fertilizers, herbicides and pesticides. Absence of pesticides from such food means animals and wild plants survive well thereby encouraging bio-diversity.
People prefer to eat this food over non-organic food, as it is tastier as compared to conventional food. Finally, the food is also rich in anti-oxidants.
Pet-food industry feels recall side effects
Almost four months after the pet-food industry’s largest recall began, its sales growth is off, and many products still are missing from store shelves.
Only about 15% of the dog and cat foods recalled are back, says Petco, the nation’s No.2 pet-food chain. It expects to stock half by July31, says Dave Bolen, chief merchandising officer. He says dog and cat food sales are below pre-recall levels but ahead of last year.
PetSmart, the biggest pet-food chain, also says few products have returned but that the bulk are expected in the next few months.
Some products will take longer to return, and some have been discontinued, says Michelle Friedman, PetSmart spokeswoman. The recalled Iams products aren’t expected back until next year, she says.
Valley legislator takes leadership role in food industry
ACentral Valley legislator is not a big hit with the farming industry after introducing three bills that imposed tough food- safety regulations on California’s lettuce and spinach growers.
State Sen. Dean Florez, a Democrat from Shafter, introduced bills that expand the authority of the Department of Health Services. One bill increases safety rules, including eliminating the use of creek water for irrigation or raw manure for fertilizer. Another bill requires growers to pay a licensing fee to cover the costs of state enforcement; a third establishes minimum requirements for a trace- back system to help identify the source of contaminated produce.
Given agriculture’s recent well-publicized problems with food safety, Florez should be applauded for standing up and tackling the issue. We certainly can’t sit around and wait for the federal government to act. That may never happen. The feds provide little, if any, oversight of growing and harvesting operations. The state does inspect but, obviously, that hasn’t been good enough.
Who could forget outbreaks of E. coli from California spinach and prepackaged iceberg lettuce last year in the Midwest and East Coast? More than 150 Taco Bell and Taco John customers became ill. There have been 20 E. coli outbreaks from lettuce and spinach since 1995, nine were linked to the Salinas Valley.
Florez’s safety rules are a sound way to prevent the spread of disease from the outset, and if a disease outbreak takes place, the third bill helps trace the source and isolate it. Consequently, this will call for more inspectors and added cost. Though growers will be billed directly, we concede it will filter down to the consumer. However, what’s at stake is far more important than a cost uptick.
California produces nearly 75 percent of the nation’s supply of lettuce. In 2005 alone, the crop brought in $750 million. California also produces 69 percent of the nation’s fresh spinach crop, and 63 percent of frozen and canned spinach in 2004. That year, spinach brought $200 million to California. It’s clear that produce is important to our economy.
The Western Growers Association argues the industry should take the responsibility since it can adapt and implement rules more quickly. That may be true, but what are the growers’ rules? We’ve seen no concrete — nor nearly as strong — ideas from them.
The state Department of Food and Agriculture recently approved a plan where California lettuce and spinach processors will undertake a voluntary inspection program. This has no teeth. We need mandatory rules if we’re serious about this problem.
Critics of Florez’s bill say it’s a federal matter, and to a certain extent that is true. But how many more outbreaks can California sustain before the nation loses total confidence in our products? There is a lot at stake here and time is essential.
It’s good to see that our state lawmakers are getting aggressive with food safety, but we have to make sure that we can adequately enforce these laws. We also welcome ideas from the federal level. Face it, this doesn’t just affect California, it affects the entire nation and other parts of the globe. All of us who grow and consume California produce are in this together.
Investing in the Future of the Food Industry
The Food Processing Suppliers Association (FPSA) Foundation was established in 1983 to promote food industry education and research. The Foundation funds educational and scientific projects, activities and programs. These programs benefit the food, beverage and pharmaceutical industries through improved guality control and professional standards, enhanced industry visibility, and improved relationships with the customer community.
Programs supported by FPSA Foundation include:
* Collegiate Dairy Products Evaluation Contest
* American Dairy Science Association/FPSA Fellowship
* V. Duane Rath Graduate Research Fellowships * Paul K, Girton and Gordon A. Houran Food Engineering Scholarships
* FPSA/Food & Process Engineering Institute Food Engineering Award
* Career Development Scholarships
* FPSA Annual Study
The FPSA Foundation also supports its goal of lifelong learning through generous support of the speakers’ program at FPSAs annual conference.
MISA Foundation
The Meat Industry Suppliers Alliance (MISA) Foundation was formed in 1988 to nurture, promote and develop state-of-the-art technology and technical information by furthering the education of meat and food science students. The Foundation annually funds scholarships to junior and senior college-level students majoring in meat or food science fields. The recipients are chosen by department heads at schools providing meat and food science curricula.
The MISA Foundation is a non-profit, tax-exempt organization that is supported through donations from individuals, companies and organizations. Members of its Board are meat industry supplier executives.
“The major focus of FPSA’s Foundation through the years has been on the future of the food industry, Since its inception in 1983, the Foundation has touched the lives of more than 2000 individuals through its grants, scholarships and stipends in the early years of their careers. Many of these individuals are now employed in food and dairy science programs in the nation’s universities, in major food, dairy and beverage processing companies, and, in some cases, in FPSA member companies themselves. Now that’s a solid investment in individuals and their future in the food industry!”
How can we trust ‘research’ by the food industry?
How much crap do we read about food every single day? People of a nervous disposition must dread picking up a newspaper in case another hot news story means they have to rethink their daily diet from scratch. Dear readers, we are cannon fodder in the food wars being fought by rival PR men, marketing groups and supermarket chains. And the icing on the cake is a whole lot of dubious “research” by scientists published in an arcane publication, probably funded by - you’ve guessed it - the people who grow, sell or package food.
Remember when low-fat spreads were just brilliant for lowering your blood pressure and warding off heart disease? I know that secretly you thought; “How come no one in Sardinia is offering me Flora when I sit in a gorgeous fish cafe in Porto Cervo” - and didn’t you wonder why all the good people of the Greek islands weren’t keeling over with coronary embolisms? Funny that. Then we were told that butter was even better than these light whippy spreads. A little while later we were told olive oil was better than dairy. Mind you, there’s still Udo’s Oil, avocado oil, “light” olive oil - all with massive claims on a shopping list of healthy eating.
I’ve just spent 10 days in Sri Lanka and the Maldives, where the idea of eating a low-fat spread is plainly ludicrous. The locals live on noodles, curries, fruit and veg, and you rarely see a fat person. In fact, most of the people I spoke to every day had shiny hair, a smiley disposition and gorgeous skin. How did they manage this without the benefit of all the food advice we have rammed at us morning, noon and night? Take the “traffic lights” system which uses red, amber and green marks on foods in the supermarkets run by Sainsbury’s, Marks & Spencer, Asda and Waitrose to denote levels of fat, sugar and salt. If I shop at Tesco or Morrisons, there’s a different load of information slapped across every packet of Pringles, Coco Pops and cheese straws about recommended daily guidelines, expressed as a percentage.
Soon we’ll be slowly making our way up and down the aisles on the weekly shop clutching calculators and trying to work out if stir- fried chicken legs with peanuts and bean sprouts is a death row meal or a healthy option. Plus, no self-respecting healthy eater can leave the premises without a basket loaded with this week’s de rigueur “super-foods”. Remember when we just ate apples, bananas and the odd kiwi fruit? How weird and deprived that now seems. How on earth did our parents even reach full maturity living on tinned grapefruit segments, maraschino cherries and peaches in thick gloopy syrup? I have spent the past year religiously consuming the following each day: oats, blueberries, raspberries, broccoli and pomegranate pips. I look exactly the same as I did the year before on the outside. Inside, my body is a super-food temple. I have not lost any weight, it’s true, but I feel I have temporarily halted the ageing process.
This week, on returning from 10 days without super-foods (I was stopped from taking porridge to the tropics), I discovered that I have to eat a whole bunch of watercress every single day to fight cancer. After eight weeks my cells will be fighting fit. It’s just a matter of getting an uninterrupted supply of the stuff in the depths of winter. By the way, this new “research” was funded by the people who actually produce watercress. Suspicious or what? And if I’d used tea tree oil to soothe the mosquito bites I got while travelling, I’d be in big trouble. While one lot of boffins told us to start munching cress, another lot produced “research” claiming to prove that tea tree oil, which is used in dozens of beauty products, can increase our chances of being vulnerable to the MRSA super-bug. In case you’re confused - and I don’t blame you - a super-food is something you eat, and a super-bug is something that eats you. In the meantime, stick to a daily diet of Pringles. Sooner or later scientists are bound to declare them an excellent way of avoiding athlete’s foot and warts.
Extraordinary jobs in the food industry
This volume profiles more than 30 unusual or overlooked jobs in the food industry, such as dog biscuit chef, cake decorator, food sculptor, restaurant reviewer, wine maker, flair bartender, and ice cream taste tester. Each entry covers the job’s salary range and outlines educational and other requirements before describing its duties, perks, and pitfalls. Interviews with professionals in the field give an insider’s view of each profession.
Valuation of the food wholesalers industry
Due to the maturity of the Wholesale Food Distribution Industry, consolidation continues to serve as the primary growth vehicle. Its mature status has also made growth in this sector extremely difficult to come by. However, despite the intense competition, the companies should still be able to post higher sales and profits over the long haul and into the early years of the next century.
Acquiring other businesses is a prime method for growth in this mature and slow-growing industry segment. Fleming and SUPERVALU, the two largest food wholesalers, have risen to the top primarily because of their buyouts of smaller rivals. Catching up, however, are Nash Finch and Richford Holdings, highlighted by the former’s buyout of Super Food Service in 1996. Most recently, Rykoff Sexton has agreed to be acquired by JP Foodservice, creating an industry giant, second only to Sysco.
The consolidation trend does not look like it is going to end anytime soon. Size plays an incredibly important role in the Food Wholesalers Industry since the larger distributors can spread the costs of automating operations to increase efficiency over a large customer base. The bigger players also have the necessary buying clout that will get them the best deals and the ability to buy huge quantities when the price is right.
These advantages held by the larger companies make it much more difficult for the smaller ones to remain competitive. When this is the case, selling out to a larger competitor becomes very attractive.
Aside from acquisitions, growth in the Food Wholesalers Industry is very tough to come by. Since the industry is mature, the primary method of increasing sales is to take business away from competitors, at both the retail and the wholesale level. However, at the retail level, that is becoming quite difficult. Chain grocers are the traditional competitors of wholesaler’s corporate owned stores and of independent retailers . These chains are always working to become more efficient and to lower prices to win customers. Even worse, other businesses have started to increase the sales of their food items. Deep-discount drugstore chains and general merchandisers are carrying more food items, putting additional pressure on independent retail grocers.
The larger companies do have a valuable resource. Due to their size, their big customer base allows them to invest in modernizing their facilities to increase efficiency. As a result, they are able to serve their customers at the lowest cost possible. Fleming and SUPERVALU, have already begun to restructure the way they do business so that they can wring out all possible costs and pass manufacturer’s deals on to customers. Despite the increasing competition, this Industry is likely to prosper in the years ahead.
Food and beverages - Industry Overview
The food and beverage industry became the nation’s largest major manufacturing sector in 1992 with shipments of more than $377 billion, surpassing the transportation equipment industry. In 1993, the constant-dollar value of shipments for the total food and beverage industry (SIC 20) is expected to rise 1.5 percent, up slightly from a 1.4 percent increase in 1992.
Shipments of the 24 industries covered in this chapter increased an estimated 1.7 percent in 1992, corrected for inflation. Only dairy products, the meat and poultry group, and candy products experienced any significant growth-3 percent or more. Processed fruits and vegetables, soft drinks, and bakery products each expanded less than 2 percent.
Foreign food and beverage makers are likely to react unfavorably to proposed changes in U.S. food labeling requirements. The new labeling, which is required for all packaged foods, covers such topics as nutrition information, serving size, health messages, and descriptive terms such as “light” and “low fat.” The U.S. Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA) share responsibility for food labeling along product lines. The USDA covers meat and poultry, and the FDA handles all other products.
Effective May 1994, new labels will be required on all packaged foods. Newly labeled products will appear on store shelves later in 1994. The new labels will feature a standardized section (yet to be made final) requiring specific, comparable treatment of key elements, such as serving size. All food products must conform to these requirements. Due to the complexity and extended coverage of the new requirements, it appears likely that most manufacturers will have to design new labels rather than modify existing ones.
The labeling requirements may prove especially difficult for many foreign food manufacturers, especially firms unaccustomed to such extensive product analysis and disclosure. Some industry observers contend that the new requirements constitute a barrier to trade and could be challenged in the General Agreement on Tariffs and Trade (GATT). In contrast, defenders of the requirements observe that all manufacturers, both domestic and foreign, must comply equally, and that the labeling rules are the result of a well-accepted need to improve U.S. health standards. These observers believe that any GATT challenge to the new regulations will be dismissed.
INTERNATIONAL COMPETITIVENESS
In 1992, for the first time since at least 1978, there was a trade surplus in processed food and beverages–an estimated $22.2 billion in exports, 5.9 percent of product shipments, compared to an estimated $21.1 billion in imports.
About 72 percent of total U.S. processed food and beverage exports are low value-added products such as fats and oils, feed ingredients, corn products, meat, poultry and fish products, while 45 percent of U.S. imports are high value-added consumer-ready products such as confections, bakery goods, alcoholic beverages, and various gourmet fruit and vegetable products. However, exports of higher value-added products grew more rapidly than lower value-added products between 1990 and 1992. This trend will continue for the foreseeable future. Total U.S. food and beverage exports grew 23 percent during the 1990-92 period. Exports of condensed and evaporated milk almost tripled. Canned and frozen specialties exports rose 75 percent. Bakery product exports rose 65 percent. Candy and beverage exports increased 48 percent and 23 percent, respectively.
The cumulative stock of foreign investment has influenced the structure of the U.S. food manufacturing industry through consolidation (Table 3). Foreign investors have especially affected the bakery and dairy industries, introduced new products, such as European-style cookies and soft-ripened cheeses, and modernized plants. With the latest comparable data from 1987, the ratio of the stock of foreign investment to the gross book value of the U.S. food manufacturing industry stood at 19.8 percent, up from 11.3 percent in 1982. The stock of investment by foreign parties in the U.S. food manufacturing sector grew 1.9 percent in 1991, to $23.4 billion. A recessionary U.S. economy slowed this growth from its average 19 percent annual rate of increase in the 1980’s.
As total red meat demand declines, the meat packing industry is undergoing retrenchment. Between 1982 and 1987, based on the 1987 Census of Manufactures, the number of companies in the red meat industry fell 10 percent to 2,562 companies. Also, the number of Federally inspected meat plants has declined 25 percent since 1987. The number of major red meat processors that also produce poultry products nearly tripled from 11 in 1982 to 32 in 1992, according to Meat & Poultry’s “Top 100 Meat and Poultry Companies” list.
Imports represented 4.6 percent of U.S. apparent consumption, which is defined as product shipments and imports, minus exports. The dollar value of red meat imports fell an estimated 1 percent from $3.09 billion in 1991 to $3.06 billion in 1992.
While imports of pork from Canada increased in 1992, imports from the EC and Eastern Europe declined. Continued strength in EC pork prices and weak U.S. prices have made it more difficult for Danish and Dutch products to compete in the United States. Also, continued restructuring of agriculture in Eastern Europe and the instability in the former Yugoslavia have resulted in substantial declines of imports from those areas.
Although beef imports were up significantly during the first half of 1992, estimated imports for the year were about the same as the previous year. Sixty-five percent of meat imports were beef products, while 32 percent were pork products.
Pork exports to Japan, accounting for an estimated 73 percent of the export market in 1992, rebounded from slumping levels of a year earlier. Future sustained growth is questionable. The United States boosted exports following the “Nagoya Connection” scandal, in which five Taiwanese companies falsified import documents to evade Japanese taxes. Japan suspended business with the Taiwanese companies. U.S. exporters picked up market share.
Growth strategies in the food industry
The U.S. food industry is the largest individual manufacturing sector of the economy. Its
basic growth determinant is the underlying 1 percent per annum U.S. population growth. The
share of personal consumption of expenditures for food and beverages has been dropping.
Nevertheless, surviving food companies have demonstrated growth rates in revenues and
returns to shareholders higher than the market as a whole. Growth has been achieved by a
high rate of new product introductions, promotion methods to develop brand strengths,
expansion into international markets, and by acquisitions and divestitures. Before 1980, a
substantial portion of food company acquisitions were in nonfood industries. During the
1980s, nonfood divestitures returned food companies to their core food product lines with
some exceptions. In general, the response of financial markets was positive to mergers and
acquisitions that moved food companies closer to their core food activities.
This is a study of strategic growth in the food industry. The processed food and beverage
industry is the largest individual manufacturing sector, with a value of industry shipments
in 1993 of over $400 billion. M&A activity has been high for many decades. The industry
provides rich case materials for testing propositions about strategies for growth. Our
central aim is to relate performance among companies in the food industry to acquisition
and divestiture strategies.
The economic characteristics of the U.S. food industry raise important strategic issues.
Its basic growth determinant is the underlying I percent per annum U.S. population growth
to which the food industry is tied. Thus it is a 1 percent growth industry in a world in
which firms strive for growth rates of 10 percent or more in order to attract high quality
managerial capabilities and other critical resources. This is the challenge faced by food
industry firms.
Demand for Product Variety
Real growth rates in the lower value-added sectors, such as meat, poultry, and the fats and
oils industry, have actually declined in recent years. A basic strategy to overcome these
unfavorable influences is to shift to higher value-added products, such as frozen and
canned fruits and vegetables, jellies, ice cream, and roasted nuts, for which growth has
been at about a 2 percent real per annum rate. But such actions alone would not
substantially lift the growth rate of food companies.
Consumers demand variety. A high rate of introduction of new products is required to
maintain a firm’s competitive position. But high growth rates for a product class rarely
persist for more than five to ten years, and sharp reversals may occur. A study of growth
in sixty-eight food and beverage classes reflects rapidly shifting consumer preferences
with related price adjustments .
Promotion and Distribution
Because of the rapid rate of new product introductions, promotion and advertising are
required to inform potential customers of their availability. As with other industries with
high rates of product introduction, promotion and advertising expenditures are in the range
of 25 to 35 percent of sales. The aim is to establish strong brand images. A strong brand
requires attractive products plus substantial outlays on promotion.
Branded products give a firm a protected market position that erodes relatively quickly.
Nevertheless, having a family of strong brands is a desirable foundation upon which a firm
may build. Even a strong continued position in a given branded product area is not
sufficient to enable a firm to maintain a high rate of growth. For example, Kellogg has had
a continued strong position in a number of traditional cereal products such as corn flakes.
Nevertheless, its market position in the ready-to-eat cereal segment of the food industry
has eroded from 45 percent in the 1970s to 35 percent in 1995, while private labels have
doubled their market share to 10 percent since 1988 .
The earlier dominance of brands may be receding because of the slow growth in consumer real
income, which increases price sensitivity. This was dramatized by “Marlboro Friday,” April
2, 1993, when Philip Morris cut the price of its Marlboro cigarettes, considered to be one
of the world’s strongest brands. Marlboro had been losing market share to cut-price
cigarettes. Food companies and their investors were concerned that brand erosion could
affect all types of products.
Attack on brand positions has taken place in a number of product categories through price
cutting. One form of price war is the increased use of private labels or brands by
manufacturers and by big retailers. Cut-price retailers can sell 25 to 40 percent below the
usual supermarket prices. In the United States, discount chains such as Wal-Mart and Kmart
and warehouse clubs such as Costco as well as drug chains like Longs are adding food items
at cut-rate prices. Supermarkets have counterattacked by: (1) forming alliances; (2)
crossing borders, invading others markets; (3) copying discounters; and (4) adding more
private labels. In addition, they put pressure on the manufacturers or other suppliers for
lower prices. For example, from 1973 to 1993, the overall CPI increased at a compound
annual rate of 6.1 percent, compared with 5.5 percent for food and 5.3 percent for food at
home. Similar patterns are found for other recent time segments.
International Dimensions
The food industry has become international in scope [Gray and McDermott, 1989]. In 1993, for the U.S. food industry, imports represented about 5 percent of the total value of shipments; exports represented about 5.7 percent. The U.S. food industry experienced a negative balance of trade in 1989 and 1990 of over $1 billion per annum. From 1991 on, the balance of trade in food and kindred products has turned positive, reaching $1.2 billion in 1993. Exports were helped by a shift to the relatively higher value-added products in export activity.
FOOD COMPANY STRATEGIES FOR GROWTH
Food companies have sought to increase growth by new products, brand strengths, acquisitions, and international expansion. New product development is a must for growth. By the 1980s, food companies were launching new products at a rate of over 11,000 per year [Connor, 1988], and the rate has doubtless increased in the 1990s. As a result, new industry segments continue to emerge: quick snacks for bus people who want to buy time more than nourishment; ready-made meals for heating in the microwave; low-fat, low-calorie foods for dieters; special foods for babies and the elderly; health foods for the fitness oriented.
Food companies have been making other strategic adjustments. They are making production runs longer, developing closer relationships with retailers, and introducing more of their own private labels. Other efforts include cost control, more innovative products, reduced prices, and new methods of distribution including teleshopping and bypassing traditional retailing outlets by selling end-products in amusement parks, sports stadiums, and restaurants. Both forward vertical integration by manufacturers and backward integration by retailers have been occurring. Food operations can be relatively fully integrated from growing crops through manufacturing and distribution. A considerable degree of specialized expertise is required in each of the value-added segments. An illustration of the vertical integration orientation is the “efficient consumer response” (ECR) efforts by some companies. The time from the manufacturer to the retail store has been reduced in recent years from 104 days to 61 days, by linking suppliers and retailers with the use of computers.
Even with increased integration, food production processes are less capital intensive compared with automobiles or steel. The main element of the manufacturing process is sterilization and placing food in containers for distribution. Because of the relatively lower capital intensity, food companies can be cash cows. This is one element of their attractiveness as potential takeover candidates.
The economic characteristics of the food industry provide a framework for understanding pressures for takeover activity. In general, food companies seek targets to augment product lines and to extend their geographic scope, particularly into international markets. Because competitive pressures are strong, successful companies use acquisitions to further their growth strategies. Successful companies may become targets because their growth achievements make them attractive to companies seeking to balance their own product portfolios. Illustrative are the acquisitions of food companies by tobacco companies.
Food companies have also been actively involved in leveraged buyouts (LBOs) because they satisfy the requisite characteristics. If their product portfolios are strong, they will have stable growth, relatively low investment requirements, and relatively stable cash flow patterns.