Heinz CEO, William R. Johnson argued in a presentation to investors that there are four reasons why the industry has a strong upside.

First, he highlighted the growth potential of Emerging Markets, where the ranks of new middle class, brand-conscious consumers are increasing at a rapid rate. "Emerging Markets represent a target-rich base of consumers who are likely to spend more and more of their income on branded packaged foods as they prosper", said Johnson. "Emerging Markets are on track to deliver at least 20% of Heinz’s total sales by 2013, more than double their contribution five years ago and that is just the beginning. Heinz is well-positioned in Emerging Markets, with strong brands, talented local management, and localized manufacturing, supported by the advantage of global scale", he added.

Johnson also pointed out to the industry’s renewed focus on innovation and marketing in response to the challenge of store brands.

He reminded investors that Heinz's increased marketing investments and new marketing initiatives helped drive volume growth in the third-quarter, led by the U.S. Retail and U.K. businesses.

"We now anticipate that marketing spending will grow at least 20% this year (Fiscal 2010),” versus the Company's original projections of 7-10%", Johnson said.

The Heinz CEO also believes that the packaged foods industry has an opportunity to improve margins.

Johnson said: "We (Heinz) have established a goal of delivering better than $1 billion in incremental cost savings over the next five years through our global supply chain initiatives", including the continued rollout of the Company’s Global Performance System and Project Keystone. These global initiatives are "aimed at realizing economies of scale and reducing costs by leveraging people, process and technology across the global supply chain".

Finally, Johnson discussed the 'consolidation mood' among manufacturers and customers.

Mr. Johnson commented: "On the subject of industry consolidation, the industrial logic has never been more compelling. Ultimately, however, the goal is to win by creating value in the most efficient and effective manner possible, whether it be by organic growth, M&A, or transformative initiatives and for that reason, I don’t see consolidation as a necessity".

Source: flex-food-news.com