The issue of irreparable environmental damage continues to dominate the news headlines, and, in response, Pepsi and The Coca-Cola Company have, this week, taken steps to boost their green credentials through promoting environmental causes. Coke plans to introduce measures to reduce energy consumption at its headquarters by 23% and reduce its water consumption by nearly 15%. Meanwhile, Pepsi has signed as a sponsor of the Live Earth music concerts, to be performed at seven venues across seven countries this summer, in a bid to combat the problem of climate change. Pepsi is also rumored to be preparing plans to reduce its carbon footprint.

In other soft drinks news, PepsiAmericas and The Pepsi Bottling Group have posted mixed first quarter results this week. PepsiAmericas net income rose to $20.6 million, up from $14.1 million in 2006, thanks to increased volumes and rising non-carbonated sales. However, Pepsi Bottling did not fare so well. PepsiCo's largest bottler and distributor saw profit drop 15% during the quarter, as it was hit with higher charges and raw material costs. Despite the drop in profit, Pepsi Bottling stuck to its original fiscal target and expects earnings per share to be between $1.90 and $1.98.

Edited by

Leah Vyse

IN THIS ISSUE

SPONSOR'S MESSAGE

Key Trends in Nutraceutical Food and Drinks: Novel ingredients, new applications and future revenue opportunities

As the global population ages, fast foods become more prevalent and distrust of traditional pharmaceuticals grows, the pressure on the food and drinks industry to provide cost effective solutions for health problems is growing year on year. This new management report provides an in-depth analysis of the regional and global trends in the healthy ingredients sector and the current state of the science behind their efficacy. The report also provides practical examples of current ingredient applications and where the future ingredient opportunities may lie and how to exploit them.

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LATEST COMMENT

Dutch brewers: trouble brewing as the EC flexes its muscle

The European Commission has imposed its seventh largest ever fine on Heineken, and penalized Grolsch and Bavaria, for stifling competition in the Netherlands beer market through coordinated price fixing. Although it is unlikely to impact on each of the company's long-term performance, it should alert the rest of the industry to the fact that anti-competitive action will not be tolerated. Read full article

Nestle: healthy operations yielding healthy profits

Nestle has announced strong sales growth of 6.4% for the first quarter of 2007. The Swiss food and beverage giant has pursued a strategy of acquisition, placing its nutrition division at the centre of its growth plans. The double digit organic growth in its nutrition unit highlights the efficacy of this plan, and the imminent purchase of the Gerber baby food and medical food units of Novartis will further aid it in its strategy to capitalize on the health and wellness trend.
Read full article

Beam Global: a spirited approach to remain competitive

Beam Global Spirits & Wine is extending its Gilbey's vodka line and repackaging its Ronrico Rum. Beam Global's decision to make additions to its portfolio, and repackage its Ronrico Rum in the US reflects the company's desire to remain in touch with the prevailing trends for premiumization and the explosion of the vodka market. To stay competitive, producers must update their image and respond quickly to consumers' needs, and Beam Global is demonstrating its awareness of this. Read full article

Canadian health initiatives: Global companies dishing out support

New initiatives launched in Canada to highlight the importance of healthy eating are being backed by leading consumer goods companies, including Coca-Cola. The initiatives will alter the landscape of advertising directed at children, and demonstrate that global players are taking the issue of rising childhood obesity seriously. Read full article

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SPONSOR'S MESSAGE

Functional Food & Drink Consumption Trends

Functional Food & Drink Consumption Trends tracks the continuing rise of functional food and drinks and analyses the factors driving consumer interest in the market. It also reviews the concerns that still pose obstacles to market growth and offers best practice suggestions on how to answer these and secure consumers' trust, key to the long-term viability of any functional offerings.

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BREWING NEWS

A-B posts higher Q1 profit
Anheuser-Busch Companies, a leading US brewer, saw earnings rise 3.7% in the first quarter to $518 million due to increased beer prices and discount reductions. Read full article
Company information: Anheuser-Busch Companies, Inc.

SABMiller, Diageo plan breakup of S&N - report
Alcoholic drinks powerhouses SABMiller and Diageo have discussed breaking up Scottish & Newcastle, the UK brewer, if a takeover bid by SABMiller is successful, The Financial Times has reported. Read full article
Company information: SABMiller, Diageo Plc, Scottish & Newcastle

Whitbread's profit rises on Premier Inn, Costa Coffee
Whitbread, a UK leisure group, recorded a 6.5% rise in full year profit which stood at GBP281.5 million thanks to strong performances of its Premier Inn budget hotel chain and Costa Coffee stores. Read full article

Brick Brewing posts Q4 loss
Canada's Brick Brewing Company has posted a net loss of C$1 million, compared to net earnings of C$1.7 million during the same period last year, following an unseasonable drop in beer consumption due to cold weather. Read full article

Lakeport Brewing revamps Brava brand
Lakeport Brewing, an Ontario-based brewer, has relaunched its Brava brand, sold in a clear bottle, in newly designed packaging. Read full article

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WINE & SPIRITS NEWS

LVMH Q1 sales rise 7%
France-based luxury goods group LVMH Moet Hennessy Louis Vuitton said first quarter sales increased 7% to E3.8 billion as the company reported 20% growth in its watches and jewelry segment. Read full article
Company information: LVMH Moet Hennessy Louis Vuitton

Foster's sells wine club businesses
Foster's Group, a leading Australian beer and wine company, has sold its wine club and services businesses in Australia, New Zealand and Japan to Archer Capital, an Australian private equity group. Read full article
Company information: Foster's Group Ltd

Diageo to target women through latest investment
International drinks behemoth Diageo has made a minority investment in Nuvo, a new carbonated blend of vodka, sparkling wine and natural fruit nectar, created by Raphael Yakoby of The London Group, which it plans to target at women in the US. Read full article
Company information: Diageo Plc

UK supermarkets deny alcohol pricing is irresponsible
The UK's four largest grocery retailers - Tesco, Asda Group, J Sainsbury and Morrisons - have dismissed claims that their pricing and promotions of alcohol is irresponsible and encourages binge drinking. Read full article

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NON-ALCOHOLIC DRINKS NEWS

Glanbia victorious in Danone trademark battle
Ireland's Glanbia has won a trademark battle with French dairy giant Groupe Danone concerning its Yoplait Essence drink brand. Read full article
Company information: Groupe Danone

Cadbury to be prosecuted over salmonella contamination
Confectionary-to-carbonates heavyweight Cadbury Schweppes is facing prosecution in the UK where, in 2006, a salmonella outbreak at its Herefordshire plant forced the company to recall over a million chocolate bars. Read full article
Company information: Cadbury Schweppes Plc

Coke HQ goes green
Soft drinks giant The Coca-Cola Company is making changes to its headquarters in Atlanta, Georgia, to make it kinder to environment and save in excess of $1 million a year in operating costs. Read full article
Company information: The Coca-Cola Company

Diedrich Coffee posts positive Q3 results, appoints director
California's Diedrich Coffee has reported net income of $4.35 million, or $0.79 per share, during the third quarter, compared to a net loss of $1.68 million, or $0.32 per share, for the same quarter of the prior fiscal year. Read full article
Company information: Diedrich Coffee, Inc.

Pepsi to sponsor Live Earth concerts
PepsiCo's drinks unit Pepsi is to sponsor the Live Earth music concerts to be performed at seven venues across seven countries this summer in a bid to combat the problem of climate change. Read full article
Company information: PepsiCo, Inc.

Danone posts 3.9% rise in Q1 sales
French dairy giant Groupe Danone has reported a 3.9% increase in first quarter sales to E3.67 billion ($4.97 billion), lifted by a strong performance in its fresh dairy division and continued growth in Europe and Asia. Read full article
Company information: Groupe Danone

Pepsi Bottling Q1 profit down 15%, higher costs
Pepsi Bottling Group, PepsiCo's largest bottler and distributor, said profit decreased by 15% in the first quarter, as it was hit with higher charges and raw material costs. Read full article
Company information: The Pepsi Bottling Group, Inc.

PepsiAmericas Q1 profit surpasses $20 million
PepsiAmericas, the world's second largest bottler of Pepsi drinks, has reported a rise in net income to $20.6 million, or $0.16 per share, in the first quarter of 2007, up from $14.1 million, or $0.11 per share, in the first quarter of 2006, thanks to increased volumes and rising non-carbonated sales. Read full article
Company information: PepsiAmericas, Inc.

Kraft Foods records 30% fall in Q1 profit
Kraft Foods, the largest food and drinks group in the US, has reported a 30% decrease in quarterly profit due to increased spend on growth initiatives. However, sales grew 5.7%, helped by acquisitions and a weak dollar. Read full article
Company information: Kraft Foods, Inc.

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SPONSOR'S MESSAGE

MARKET TRENDS

New drinks launches Dec-Feb: a flattening beer offering
Fruit flavored drinks was the leading category in new drinks launches for the three months to February 2007, according to Productscan. While two categories - wine and soft drinks - have grown significantly compared to the same period in 2006, beer & ale has seen its popularity wane. Read full article

Product claims: new drinks launches, Dec-Feb
According to Productscan, 'high vitamins' was the leading claim in new drinks launches for the three months to February 2006, highlighting how manufacturers are exploiting the trend for healthier drinks. Read full article

Tea: top launches by corporation
According to Productscan, Unilever launched the most tea products in the year to January 2007, a position it retains from the same timescale the previous year. Meanwhile, Coca-Cola has risen up the rankings in the same period, moving from third to second position. Read full article

New drinks launches Nov-Jan: fruit drinks provide a tempting offering
Productscan reports that fruit & fruit flavored drinks was the most popular drinks category from November 2006 to January 2007, achieving growth of over 100% from the same period the previous year. Meanwhile, the wine & wine coolers category has reported much smaller levels of growth, of less than 2%. Read full article

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RELATED REPORTS

Growth Strategies in Alcoholic Drinks: Emerging trends in beer, wine and spirits
19 Apr 2007
The global alcoholic drinks market is undergoing fundamental changes that are redefining the way manufacturers develop, produce and market their products. Consumers are choosing to trade up to better quality products, whilst moderating consumption. At the same time, changes in demographics are creating new opportunities for alcoholic drinks manufacturers.

New Developments in Global Consumer Trends
16 April 2007
This report based on a vast array of primary and secondary research provides a comprehensive snapshot of global consumer behavior. Structured around Datamonitor's well-established mega-trends framework, it offers added clarity, new detailed insight, future trend predictions and intuitive recommendations for marketing and product development.

The Burgeoning Middle Classes in Brazil, Russia, India and China (BRIC)
13 April 2007
All of the BRIC markets have great potential for overcoming their past economic underperformance and establishing the most stabilizing of forces a prosperous middle class. This group in each country is growing at varying rates but the future direction is clear: the middle class will both broaden and deepen providing a solid base for the development of a strong consumer packaged goods industry.

PepsiCo case study: taking advantage of changing market conditions
3 April 2007
This case study focuses on PepsiCo's operational and marketing activities both domestically and internationally, exploring how the company is at the forefront of initiating change whilst maintaining core competencies.

The Top 10 Food and Drinks Ingredient Companies: Emerging opportunities, growth strategies and innovation in the leading players
7 Mar 2007
New trends in innovation and NPD are emerging in the global food and drinks ingredients industry. The key trend of healthy ingredients is focusing on themes including weight management and functional food and drinks and the leading players have also identified new opportunities in areas from biotechnology to bio-fuel production.

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COMPANY SPOTLIGHT

Tsingtao Brewery Company Ltd

China's Tsingtao Brewery Company has posted a 77% rise in earnings during the second half, despite the growing presence of foreign brewers entering the Chinese market.

Tsingtao, which has benefited from rising income levels in China, recorded a profit of CNY235 million during the six months to December 31, 2007, up from the CNY133 million recorded in the previous second half.

As income levels continue to rise, the Chinese brewer will have to increasingly compete with premium offerings from its global competitors - SABMiller, Carlsberg and Heineken - which now have a presence in the world's biggest beer market.

Tsingtao, China's second largest brewer, is part owned by US brewing giant Anheuser Busch Companies, which holds a 27% share.

Key Facts

Tsingtao Brewery Company Ltd
56 Dengzhou Road
Qingdao
Shandong 266071
China
Tel: 86 532 571 1119
Fax: 86 532 571 4719

www.tsingtaobeer.com

OTC Ticker: TSGTY
No. Employees: 3,822
Financial Year End: December

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SUBSCRIPTION INFO

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