GE Capital Global Holdings LLC NT
GE Capital Global Holdings LLC NT — GE Capital — Food & Beverage Industry Outlook webinar (May 2013)
45 slides from GE Capital Global Holdings LLC NT's conference presentation, May 30, 2013
Slide 1: Food & Beverage Industry Outlook
Food & Beverage Industry Outlook Special focus: How Walmart Thinks About Food Safety Thursday, May 30th at 2PM ET Dial-in Info: 1-855-235-8283 Conference ID 34167847 Thanks for joining us! The webinar will begin shortly
Slide 2: Today's Speakers
Food & Beverage Industry Outlook Special focus: How Walmart Thinks About Food Safety Thursday, May 30th at 2PM ET Today’s Speakers: Loren Trotta Colin Guheen Senior Vice President Senior Vice President Industry Research Analyst Investment Research Analyst GE Capital GE Capital Natalie Dyenson Senior
Slide 3: Disclaimer
Disclaimer: Copyright © 2013 GE Capital Corporation. All rights reserved. "GE", "General Electric Company", "General Electric", the GE Logo, and various other marks and logos used in this publication are registered trademarks, trade names and service marks of General Electric Company. You may reprin
Slide 4: Agenda
Agenda Industry Update Loren Trotta GE Capital Senior Vice President, Industry Research Analyst E: loren.trotta@ge.com The Future of Food Safety Natalie Dyenson Walmart Senior Director, Supplier Food Safety E: natalie.dyenson@wal-mart.com Q&A Session Colin Guheen GE Capital Senior Vice President, In
Slide 5: GE Capital $15.6B invested across the value chain
GE Capital $15.6B invested across the value chain $1.8 Bn $2.9 Bn $1.5 Bn $9.4 Bn Food & Bev Retailers & Agriculture Wholesalers Manufacturers Restaurants As of March 2013 GE’s Food and Beverage Team is 100% dedicated to the industry Long-term player with more than 25 years investing in the food ind
Slide 6: GE Capital Food and Beverage Transactions
GE Capital Food and Beverage Transactions 6 Access GE Food & Beverage webinar
Slide 7: Industry Update
Industry Update 7 Access GE Food & Beverage webinar
Slide 8: World GDP Growth Led by Developing & Emerging Markets
World GDP Growth Led by Developing & Emerging Markets Canada ’12 1.8% ’13F 1.7% European Union ’12 -0.2% USA ’13F -0.2% ‘12 2.2% ’13F 2.3% Asia & Africa Pacific Latin America & ’12 5.2% ’12 4.5% Caribbean ’13F 4.7% ’13F 4.8% ’12 2.9% ’13F 3.1% 8 Access GE Source: GE, May 2013 Food & Beverage webinar
Slide 9: U.S. Food and Beverage Industry ~$1.2 trillion
U.S. Food and Beverage Industry ~$1.2 trillion Relatively stable industry, with slightly higher percentage of meals eaten at home versus away from home. 9 Access GE Source: USDA Food & Beverage webinar
Slide 10: Consumer Confidence Indicators
Consumer Confidence Indicators Consumer confidence Index Unemployment Rate Forecast Forecast U.S. Personal Savings Rate S&P Case Schiller Home Price Index (% of disposable personal income)
Slide 11: CFO Sentiment Improves
CFO Sentiment Improves 1Q11 3Q11 1Q12 3Q12 1Q13 6.6 6.7 6.2 6.4 6.1 4.9 4.7 4.8 4.8 4.4 4.6 4.1 4.2 4.2 3.9 How strong would you rate the current How strong do you think the U.S. How strong do you think this world state of the industry in which you economy is now? economy is now using the same scale
Slide 12: Retail vs Foodservice Sales
Retail vs Foodservice Sales Source: U.S. Census Bureau 12 Access GE Food & Beverage webinar
Slide 13: Restaurant Same Store Sales Slower in 1Q13
Restaurant Same Store Sales Slower in 1Q13 13 Access GE Food & Beverage webinar
Slide 14: Food & Beverage Inflation Moderating
Food & Beverage Inflation Moderating CPI vs. PPI 10% CPI - Food & Beverages PPI - Finished Consumer Foods 8% 6% Y/Y % Change 4% 2% 0% Source: U.S. Bureau of Labor Statistics -2% Jan-12 Jan-10 Jan-11 Jan-13 Jul-10 Jul-11 Jul-12 14 Access GE Food & Beverage webinar
Slide 15: CFO Plans to Reduce Input Costs
CFO Plans to Reduce Input Costs 1Q11 3Q11 1Q12 3Q12 1Q13 89% 92% 86% 88% 85% 51% 47% 38% 40% 31% 21% 15% 14% 14% 10% Improve operational efficiency Streamline distribution Reduce packaging materials Q:Which of the following actions, if any, does your company plan to take in 2013 to lower costs? 15 A
Slide 16: Crop Expectations Lower Corn Prices
Crop Expectations Lower Corn Prices U.S. Quarterly Prices and Forecast Stocks to Use Ratio ($/bu) 20% 2011 2012 2013F 8 15% 7 10% 6 5% 5 4 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010/11 2011/12 2012/13E 2013/14F 16 Sources: USDA, IMF, GE Access GE Food & Beverage webinar
Slide 17: Soybean Stocks Forecasted to Improve From Extremely Low Levels
Soybean Stocks Forecasted to Improve From Extremely Low Levels U.S. Quarterly Prices and Forecast Stocks to Use Ratio ($/bu) 18 2011 2012 2013F 9% 17 16 7% 15 14 13 5% 12 11 10 3% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010/11 2011/12 2012/13E 2013/14F 17 Sources: USDA, IMF, GE Access GE Food & Beverag
Slide 18: Wheat Prices Hold Steady
Wheat Prices Hold Steady U.S. Quarterly Prices and Forecast Stocks to Use Ratio ($/bu) 40% 10 2011 2012 2013F 9 35% 8 7 30% 6 5 25% 2010/11 2011/12 2012/13E 2013/14F Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 18 Sources: USDA, IMF, GE Access GE Food & Beverage webinar
Slide 19: Commodities & Food Safety Are Primary Concerns
Commodities & Food Safety Are Primary Concerns 1Q11 3Q11 1Q12 3Q12 1Q13 84% 82% 77% 75% 73% 60% 54% 56% 54% 55% 45% 46% 45% 41% 39% Commodity Pricing Food Safety Labor Costs Other concerns : Competition from private label, shifts in consumer preferences and changing retail landscape 19 Access GE Sou
Slide 20: The Future of Food Safety
The Future of Food Safety 20 Access GE Food & Beverage webinar
Slide 21: Global Presence
Global Presence Canada UK Japan US Mexico China Puerto Rico Central America India Brazil Chile Argentina South Africa 21 Walmart Food Safety & Health
Slide 22: Walmart Food Safety & Health
22 Walmart Food Safety & Health
Slide 23: Walmart's Grocery Segment Accounts for 55% of U.S. Sales
Walmart's Grocery Segment Accounts for 55% of U.S. Sales 23 Walmart Food Safety & Health
Slide 24: Walmart Food Safety & Health
24 Walmart Food Safety & Health
Slide 25: Globalization of Food Trade
Globalization of Food Trade 25 Walmart Food Safety & Health
Slide 26: More Illnesses Tied to XL Foods Beef; Salmonella Outbreak
More Illnesses Tied to XL Foods Beef; Recall Expands to Hong Kong October 9, 2012 Salmonella Outbreak Traced to Mexican Mangoes Mangoes Recalled in U.S. and Canada; 127 Sickened in US and Canada October 11, 2012 26 Walmart Food Safety & Health
Slide 27: Foodborne Disease Surveillance
Foodborne Disease Surveillance 27 Walmart Food Safety & Health
Slide 28: Making the Invisible Visible
Making the Invisible Visible 28 Walmart Food Safety & Health
Slide 29: Walmart Food Safety & Health
29 Walmart Food Safety & Health
Slide 30: Why Did We Launch GFSI?
Why Did We Launch GFSI? BUYING COMPANIES SHARED SUPPLIER BASE RESULT Supplier A Company A Food Safety Audit Redundancy Company B Confusion Food Safety Audit Inefficiency Company C Food Safety Audit High Cost Food Safety Audit Company D Verification vs. Food Safety Audit validation Company E 30 Walma
Slide 31: Benefits of Adopting GFSI Harmonized Standards
Benefits of Adopting GFSI Harmonized Standards Reduce Risk • Enhanced protection and confidence in the safety of the global food supply. Reduce the number of audits • Fewer number of audits on an annual basis freeing up personnel to focus on other food safety initiatives. Reduce cost from the supply
Slide 32: GFSI's Effect on Food Recalls
GFSI’s Effect on Food Recalls Fewer Recalls means: • Higher consumer confidence 34% • Reduction of lost sales • Lower cost of doing business 32 Walmart Food Safety & Health
Slide 33: Evaluating GFSI's Effectiveness
Evaluating GFSI’s Effectiveness 33 Walmart Food Safety & Health
Slide 34: Walmart Commissions GFSI Study
Walmart Commissions GFSI Study Evaluate leading indicators • Effectiveness • Costs • Benefits Scope • Private Brand • National Brand 34 Walmart Food Safety & Health
Slide 35: Survey Demographics
Survey Demographics • 174 suppliers representing 406 facilities responded • Store brand vs. National brand • Company size Company Size • Type of product $0-50M • Type of operation $51-100M $101-200M $201-500M >$500M 35 Walmart Food Safety & Health
Slide 36: Walmart's GFSI Food Supplier Survey Results
Walmart ‘s GFSI Food Supplier Survey Results (n=174) Rate 1 – 5 (1 = Strongly Disagree, 5 = Strongly Agree) +/- ISSUE Score Results in more thorough documentation of their food safety risk 3.95 + assessment , prevention control plan, and checks to ensure controls are properly implemented. Special No
Slide 37: Ingredient Driven Outbreaks
Recent Large Multi-State Outbreaks of Foodborne Infections, U.S.A., 2006-2010 (n=26) 2006 - E. coli O157 and bagged spinach 2006 - E. coli O157 and shredded lettuce 2006 - Botulism and commercial pasteurized carrot juice 2006 - Salmonella and fresh tomatoes 2007 - E. coli O157 and frozen pizza 2007
Slide 38: Walmart's GFSI Food Supplier Survey Results
Walmart ‘s GFSI Food Supplier Survey Results (n=174) Rate 1 – 5 (1 = Strongly Disagree, 5 = Strongly Agree) +/- ISSUE Score Results in more thorough documentation of their food safety risk 3.95 + assessment , prevention control plan, and checks to ensure controls are properly implemented. Special No
Slide 39: Emerging Markets
Emerging Markets 39 Walmart Food Safety & Health
Slide 40: GFSI Global Markets Compliance Level
GFSI Global Markets Compliance Level 100% 70% GFSI Complete GFSI Guidance Intermediate Document 30% Core level I GFSI Requirements: Foundational + (version 6) Core level I Core level II 40 Walmart Food Safety & Health
Slide 41: Multiple Hurdle Approach
Multiple Hurdle Approach Commodity Specific Strategies High Risk Ingredients High Risk Foods GFSI Certification 41 Walmart Food Safety & Health
Slide 42: Beef Safety Requirements
Beef Safety Requirements Facility Food Safety Certification Requirement • Global Food Safety Initiative (GFSI) Testing Requirement • Raw materials and/or finished ground beef for E coli 0157:H7 using N-60 sampling plan. Process Control Validation Requirement • Ground beef suppliers (trim interventio
Slide 43: Deli Meat Safety Requirements
Deli Meat Safety Requirements Facility Food Safety Certification Requirement • Global Food Safety Initiative (GFSI) Product Formulation Requirement: – Bulk deli meat suppliers must include an inhibitor that will not allow the growth of Listeria monocytogenes to increase more than 1 log during the in
Slide 44: Growers Academia Processors
Growers Academia Processors Consumers Shippers Media Distributors Regulatory Food Service Retailers 44 Walmart Food Safety & Health
Slide 45: Questions?
Questions? Loren Trotta Colin Guheen Senior Vice President Senior Vice President, Investment Industry Research Analyst Research Analyst GE Capital GE Capital loren.trotta@ge.com colin.guheen@ge.com Natalie Dyenson Senior Director of Supplier Food Safety Walmart Stores, Inc. natalie.dyenson@wal-mart.
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