The Supply Side: Wal-Mart supplier community news briefs

by The City Wire staff ( 6 views 

• Nestle to expand health category
On Tuesday,  Nestle said it intends to acquire Pamlab, a U.S.-based medical food products firm specializing in treatments for mild cognitive impairment, depression and diabetic peripheral neuropathy.

Morningstar analyst Eric Lash said this acquisition seems to align squarely with Nestle's strategic objective to build out its presence in the health and wellness category and follows on a string of deals by the largest global consumer products firm in the health science arena.

Financial terms of the deal were not disclosed, but given that health sciences remains a relatively small portion of Nestle's consolidated sales at less than 10%, Lash doesn’t expect the deal will move the needle on Morningstar’s value estimate for Nestle.

“Nestle has a very strong capital structure that we expect to be leveraged in the medium term in order to boost growth, and management has not beat around the bush about its desire to expand its portfolio of health and wellness products,” Lash noted.

Nestle is supplier to Wal-Mart Stores Inc. with a large sales office in Rogers.

• Another factory closure for Snyder’s-Lance
Snyder’s-Lance has announced plans to close its Cambridge, Ontario, bakery plant, effective May 17.

The Cambridge plant primarily makes sugar wafers. The facility was acquired in the late 1990's when Lance acquired Tamming Foods Ltd.

The company made the decision after completing a review of capacity, capabilities and distribution costs. After the closure, the company will consolidate production from its two Canadian facilities.

The company closed a salty snacks manufacturing plant in Corsicana, Texas, and a distribution facility in Greenville, Texas, last year.

Snyder’s-Lance in a Wal-Mart supplier with a local sales office in Bentonville.

• Coupon clipping back in fashion
Consumers are clinging to coupon clipping once again according CEO Steven Boal.

Boal recently told CNBC that the coupon website tracks how often people view and print coupons and their overall redemption rate. He said the pattern in recent weeks is almost identical to the one that played out right before the last major economic downturn in late 2007.

Boal considers coupons a leading indicator because you don't need months of data to see consumer behavior patterns emerge. He said he expects the payroll tax hikes, rising food and gas prices are squeezing household budgets.

It also helps to look at the types of coupons shoppers are redeeming. The most popular ones right now are for soup, cheese, rice, pasta and M&Ms.

"When people are feeling tightened, they seek comfort food. But, also things that make them feel better from personal care and beauty. Dove soap, Pantene and Vidal Sassoon are trending right now," said Boal.

A recent survey from the National Retail Federation showed seven in ten Americans were adjusting their spending plans to cope with this year's payroll tax changes. Nearly half of those polled said they planned to comparison shop more often.