Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Strauss bets on coffee after hummus recall

Twitter Linkedin

Strauss Group is upping its stake in the coffee sector, as it reports rising sales and hails a "growing and resilient" consumer market.

The Israeli company, which produces snacks, fresh foods and coffee, will buy back a 25.1% stake in its coffee arm from TPG Capital Management, for E257m, or about $279m at current exchange rates.

Strauss has already paid E172 at the signing of the deal, with a remainder of E85m to be paid by August this year.

"The acquisition and the redemption of shares and stock options will be financed by the company's own assets and debt of Strauss Coffee and by Strauss Group debt or share capital increase as per market conditions," the company said.

TPG bought its stake in 2008 for $293m.

Confidence in coffee

Gadi Lesin, Strauss president and chief executive said "coffee is a core business for Strauss Group, and the transaction reflects our belief in the coffee category".

Mr Lesin said the global coffee market was "attractive, growing and resilient".

The group's coffee sales grew 21 % to 1.06bn shekels over the three months of December 31.

The growth was attributed to "increased volumes and selling prices in most geographies".

Strauss is a major player in the Brazilian and Eastern European coffee market.

Hummus recall hits profit

Across the company, Strauss reported a 22% drop adjusted net profits over the three months to December 31, to 58m shekels.

The drop in profit was down in part to a large-scale product recall in the United States.

Sales at the group's international dips and spreads segment, a joint venture with Pepsico, were down 27% following a recall of hummus products in the United States, over concerns of listeria contamination back in November

At the time the company said the recall would hit operating profits by some $5m.

Strauss reported revenue up 7.2% year-on-year to 2.03bn shekels.

By William Clarke

Twitter Linkedin
Related Stories

Evening markets: Ags gain, as funds begin to get that year-end festive mood

Ag prices recover, helped by the likes of more positive comment on US export competitiveness, and some more negative talk on Argentine rains

Rabobank 'no more bearish' on coffee prices, despite raising supply hopes

The bank upgrades world coffee supply estimates for this season and next made only two weeks ago. Will output deficit return in 2019-20?

Evening markets: ags overlook crumbs of comfort in Wasde to set fresh historic low

The Bcom ag commodity subindex ends at a fresh record low, as US export fears overtake upbeat interpretations of corn, cotton estimate revisions

Evening markets: Ags poop party lifting other commodities, shares

Wheat futures set another contract low, while arabica coffee hits its weakest close but one in 19 months, despite buying in other asset classes
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069