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Home > Business > Special

The world's best food companies | May 25, 2006

"Stack 'em high, and sell 'em cheap" was the credo by which Jack Cohen and his sons-in-law turned a 1919 market stall in the East End of London into Tesco, the world's second-largest supermarket chain, a $65 billion (2005 sales) business operating in 12 countries across two continents.

That credo is still a recipe for success for some of the world's leading grocers. The top five food marketers in our list of high-performing global public companies include three companies that are predominantly supermarket chains: the UK's Tesco; Belgium's Delhaize Group, which operates the Food Lion and Hannaford chains in the US; and natural and organic foods specialist Whole Foods Markets.

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The other two in our top five are logistics companies. Sysco is a $31.4 billion distributor of food and food-related products to what it calls the "food prepared away from home" industry in the US. Performance Foods is a $5.7 billion network based in Richmond, Va., that distributes branded foods to grocers, food services companies and restaurants.

It's notable that some of the big names in global food marketing didn't make this year's top five. They include:

Carrefour, the $98.6 billion French group that invented the hypermarket and is Europe's largest (and the world's second-largest) food retailer.

Metro AG, Germany's leading food retailer, with 2005 sales of $76.5 billion, fast diversifying through mergers and acquisitions from its cash and carry core.

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Seven & I Holdings, the $31 billion Japanese holding company formed in 2005 from the merger of Seven-Eleven Japan convenience stores, Ito-Yokado department stores and Denny's Japan fast food restaurants.

Safeway, one of the largest food and drug retailers in North America, with 2005 sales of $38.4 billion from stores concentrated in the western states of the US, Canada and Mexico.

George Weston, a $27 billion Canadian company that is one of North America's largest food processing and distribution groups, whose baking brands include Arnold Foods, Entenmann's and Wonder Bread.

What sets our five high performers apart? All ten companies mentioned above are world-class retailers and members of the Forbes 2000 list of the world's largest public companies. But while it does not hurt to be big if you want to compete in a global economy, size alone is no guarantee of success.

That is why we took a second look at the Forbes 2000, putting its members' financial and management performance under the microscope to find big companies in each industry that are absolutely great at what they do--and have the numbers to show for it.

The result is an elite group. Fewer than 150 of the 2,000 companies cleared our demanding high-performance hurdles. The top five food markets also reflect the trends now driving the industry, including international expansion, an expansion of sales of natural and organic foods, diversification from selling groceries into prepared food, clothing and household and consumer products, and a reversing of the supply chain into procurement, logistics, IT and marketing.

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