Monthly Archives: October 2016

Lubrizol to Benefit From Robust Market for Medical Tubing

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Berkshire Hathaway’s Lubrizol will benefit from the robust growth projected to come from the medical tubing market over the next five years.

Analysts at Research and Markets are projecting a compound annual growth rate (CAGR) of 8.0% from 2016 to reach a total market size of USD $5.85 Billion, by 2021.

In 2014, Lubrizol acquired Vesta Inc., a maker of catheters and tubing based on silicone and thermoplastics.

According to Research and Markets, the market is mainly driven by minimally invasive surgery.

Another major factor that is expected to bring momentum to this market are increasing aging population, especially in developing countries, and the rising awareness about healthcare and the government initiatives to improve the quality of the healthcare infrastructure.

Silicone and TPE & TPE are expected to register high CAGRs between 2016 and 2021, in terms of volume. Silicone and other specialty polymers are replacing PVC due to their sterilization capabilities and microwave property, which PVC cannot sustain.

North America accounted for the largest share of the global medical tubing market and is projected to continue dominating the market during the forecast period while Asia-Pacific is projected to witness the highest CAGR during the forecast period due to the improving lifestyles of the population in the region. North America accounted for the largest share in 2015 in the medical tubing market due to focused interest of its government to provide quality healthcare facilities.

Bulk disposable tubing application is projected to account for highest market share during the forecast period. Medical tubing is widely used in the bulk disposable and dialysis applications. Bulk disposable tubing is used in blood bags used for blood transfusion, intravenous infusion tubing, drug delivery disposables, respiratory disposables, products for dialysis, laboratory disposables, wound management disposables, nonwoven medical disposables, sterilization supplies, waste disposable supplies, and others, such as diagnostic disposables. These disposable tubings are used mainly in hospitals.

Medical tubing manufactured from polymers is preferred because of their favorable properties such as resistance to sterilization condition, flexibility, inertness to body tissues & fluids.

Significant investment and the time required for product development act as a major restraint in the medical tubing market. In order to develop new and innovative products, technologies, and manufacturing processes, the market players collaborate with each other. These collaborations are expected to overcome this restraint during the forecast period.

At the time of the Vesta acquisition, Lubrizol’s Deb Langer stated that “the addition of Vesta significantly enhances our life science offerings through the combination of strong polymer technology, applications know-how and world class component manufacturing.”

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Lubrizol Announces Distribution Partnership with LEHVOSS

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The Lubrizol Corporation’s` Advanced Materials business has announced a new distribution partnership with LEHVOSS Italia S.r.l. covering Italy, for Lubrizol`s PearlbondTM TPU (thermoplastic polyurethane) for reactive hot melts (HMPUR or RHM) and shoe stiffeners, and PearlstickTM TPU for solvent-based adhesives.

LEHVOSS Italia S.r.l. is the affiliated company in Italy of Lehmann & Voss & Co., which has been selling chemical specialties for the industrial sector for more than 120 years.

LEHVOSS is a well-established distributor of chemical specialities for diverse industries, such as: plastics, adhesives, compounds and polyester resins, rubber, paints, coatings and polyurethane polymers.

Javier Tortosa, Lubrizol Engineered Polymers global adhesives business manager, comments, “With this agreement we are looking forward to expanding the growth of our specialty TPU solutions in the Italian adhesive market and delivering consistently excellent service to new customers. We expect to provide high-value, differentiated technology solutions through this partnership with LEHVOSS in Italy.”

Lubrizol`s Pearlstick and Pearlbond TPU product lines include TPU specialties used as additives to increase HMPUR crystallization speed and green strength, as well as improve adhesion to substrates, accelerate setting and open times, by applying them in the following industries and applications: transportation (component bonding), technical textiles and furniture (edge banding, profile wrapping).

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

NetJets Gets Into Whole-Aircraft Brokerage With New Subsidiary

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NetJets Inc. buys and sells more airplanes than any other private aviation company in the world, and now the fractional ownership pioneer is offering these capabilities to the entire private aviation community through a new, independent subsidiary: QS Partners, a whole-aircraft brokerage and dealership.

QS Partners is dedicated to delivering customized aircraft sales and acquisition services. QS Partners has a global network of resources and expertise that enables the delivery of creative solutions to all corners of the globe.

“By recognizing a growing need from our clients regarding whole-aircraft sales and trades and leveraging NetJets’ global network of resources, QS Partners allows us to offer a valuable service that goes beyond what is traditionally offered by aircraft brokerage services,” said Doug Henneberry, EVP of Aircraft Asset Management at NetJets. “This is a service our customers have asked for, and we’ll extend the uncompromising attention to detail they have come to expect from NetJets to this new venture.”

Whole-aircraft transactions are hardly new territory for NetJets–or for QS Partners. For years the company has assisted aircraft owners looking to transition into a NetJets Share™ or Marquis Jet Card®, or fractional owners looking to supplement with whole aircraft ownership. The company’s aircraft expertise also runs deep; it maintains a fleet of more than 700 jets globally that continuously require refreshing.

“Even though we are a new company, we have the resources, the expertise, the capital strength, and the global presence of NetJets,” said Brian Hirsh, President of QS Partners. “Those four elements set QS Partners apart from almost every other broker dealer.” QS Partners is now the exclusive authorized reseller of NetJets airplanes.

A long-term strategy for QS Partners is to focus on customer-centric service. Every transition is about more than buying or selling an airplane—it’s about developing a relationship and understanding the core of the customers’ objectives and where they want to be. This allows QS Partners to create the best solution, especially with the expertise of John Odegard and Seth Zlotkin, NetJets veterans and industry experts who bring a combined 25 years of aviation sales experience to the team.

In addition to being customer-centric, QS Partners is also a data-driven company with global reach. Fueled with decades of research provided by its parent company, QS Partners has more data, more details, more knowledge of the market, and more understanding of what’s happening in all corners of the world than other companies.

“Data allows us to better guide customers and provide valuable options,” said Hirsh. “We have the resources to facilitate a seamless transaction anywhere around the globe.”

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Balancing Authority of Northern California and Sacramento Municipal Utility District Want In On Western Energy Imbalance Market

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The California Independent System Operator (ISO) has announced that the Balancing Authority of Northern California (BANC) and Sacramento Municipal Utility District (SMUD) intend to join the ISO’s western Energy Imbalance Market (EIM).

The EIM is a real-time, wholesale power market managed by the ISO that enables participating utilities to buy low cost energy available across eight western states, including California, Oregon, Washington, Utah, Idaho, Wyoming, Nevada and Arizona. The efficiencies created by pooling resources across a wide geographic area provide cost savings and environmental benefits.

Berkshire Hathaway’s Oregon-based PacifiCorp was the first utility to join the EIM, beginning in November 2014, and Berkshire’s NV Energy of Las Vegas, entered the market in December 2015. Both have already achieved tens of millions in cost savings and environmental benefits.

After completing a study on the benefits of joining the EIM, BANC – a joint powers agency whose members include the Modesto Irrigation District, the City of Redding, the City of Roseville, SMUD, the City of Shasta Lake and Trinity Public Utilities District – announced their intent to begin negotiations with the ISO on behalf of their members. SMUD, the nation’s sixth largest municipal utility, has elected to be the first BANC member to participate.

“We are extremely pleased to see a major regional public power utility, like SMUD, step forward to engage in the EIM,” said Steve Berberich, ISO president and CEO. “We are confident we can create an agreement that provides efficiencies and savings to SMUD and other BANC members.”

The EIM uses state-of-the-art software to automatically analyze western grid needs and find low-cost generation to meet demand every five minutes. Participating utilities also can access low-cost renewable energy across state lines in real-time to offset power generated from local fossil-fueled plants.

The cost and environmental benefits produced by the EIM to date have been significant. Since it began operation in November 2014, the western EIM has realized more than $88 million in cost benefits and reduced carbon emissions by more than 126,000 metric tons by using excess renewable energy in place of fossil-fueled generation resources.

BANC, SMUD and the ISO will begin crafting an agreement that will recognize BANC’s unique circumstances as a public power entity and enable them to phase-in their EIM participation while continuing to meet their existing power supply arrangements.

Current EIM participants include Portland-based PacifiCorp, NV Energy of Las Vegas, Arizona Public Service, and Puget Sound Energy of Washington. Portland General Electric and Idaho Power have agreed to participate beginning in 2017 and 2018, respectively.

Last week, Mexican grid operator El Centro Nacional de Control de Energía (CENACE) announced that it is exploring participation in the EIM.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Richline Group Acquires Silpada Designs

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Richline Group, Inc., a wholly-owned subsidiary of Berkshire Hathaway, has acquired select assets of Silpada Designs, including the “Silpada” brand name, its jewelry designs and all sterling silver and fashion jewelry inventory.

Terms of the transaction were not disclosed.

From its humble beginnings as a business founded by stay-at-home moms, Silpada saw stunning success, becoming the world’s largest home party seller of sterling silver jewelry. Over the past three years significant investments were made to keep Silpada operating as the company worked to enhance and evolve its business to remain relevant in an evolving market.

As it struggled, the company shut down its online business earlier this year.

Richline Group, a manufacturer and marketer of fine jewelry brands, will continue to produce and market the Silpada brand through new channels, focusing on Silpada’s sterling silver jewelry heritage.

While the Kelly and Walsh families will no longer be a part of Silpada moving forward, they are “extremely pleased that the Silpada brand will live on as a member of the Richline family of brands.”

“We see a tremendous opportunity to bring Silpada back to its creative roots. We plan to focus exclusively on these unique and accessible sterling silver designs that have clearly resonated with so many women across the world. We look forward to honoring the Silpada legacy while finding new ways to invigorate this unique and nationally-recognized brand”, said Richline Group CEO, Dennis Ulrich.

Going forward Richline plans to refocus the Silpada name around its sterling silver offerings. For the balance of 2016, Richline will continue serving Silpada’s loyal customer base with the core products Silpada is best known for, as well as a previously unreleased line of jewelry, as it refines a new direction forward for this national leader in silver jewelry.

In addition to ongoing retail sales for the brand, Richline will continue honoring the Silpada Lifetime Guarantee that was in place prior to June 1, 2016 for all qualified purchases until September 2017.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

NV Energy Agrees to Price Reduction for Northern Nevada Electric and Gas Customers

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Berkshire Hathaway’s utility, NV Energy, has reached a settlement agreement with the Regulatory Operations Staff of the Public Utilities Commission of Nevada, Bureau of Consumer Protection, Northern Nevada Industrial Electric Users, Northern Nevada Utility Customers, a coalition of local governmental entities, Nevadans for Clean Affordable Reliable Energy and Vote Solar, to lower prices for customers in northern Nevada starting January 1, 2017.

The agreement follows the June 2016 filing of NV Energy’s required triennial general rate case and is subject to Public Utilities Commission of Nevada (PUCN) approval. The amount of money needed from customers to fund the company’s core electric operations will be reduced by $2.93 million or 0.44 percent, and by $2.40 million or 2.16 percent for its natural gas operations.

“I sincerely appreciate the willingness of all parties to reach a compromise that allows us to reduce prices for our customers and would like to highlight efforts of the Bureau of Consumer Protection and PUCN Regulatory Operations Staff,” said Paul Caudill, president and CEO of NV Energy. “This result is also due to the hard work of my colleagues at NV Energy, who have embraced the challenge of improving operations and our focus on customers, all while reducing our costs to serve.”

PUCN is expected to vote on the agreement later in the year. If the agreement is accepted, new general rates will become effective on January 1, 2017 and remain in place for three years.

NV Energy’s northern operations revenue requirement will be lower at the end of 2019 than they were in 2008, providing more than a decade of stability and predictability.

“As we negotiated the agreement, it became clear to us that our goal – that all customers be treated fairly and to obtain certainty – aligned with the goals of the Regulatory Operations Staff, the Bureau of Consumer Protection, and the other parties,” said Shawn Elicegui, senior vice president of regulatory and strategic planning for NV Energy. “This settlement provides certainty that our customers will enjoy fair and reasonable rates for the foreseeable future.”

Residential customers’ monthly bills are on average lower today than they were in 2008. A report issued last month from the Energy Information Administration in the U.S. Department of Energy showed that Nevada now is also the lowest of all the Intermountain West states for residential and commercial customers.

“As we look toward our mandated rate filing for southern Nevada customers in 2017, we are targeting a very similar result,” said Caudill.

The PUCN will still review separately two other areas of the original general rate case filing. These include the appropriate value of excess energy credits provided to private rooftop solar customers and approval of new optional time of use rates. A decision on the general rate case proceeding in its entirety is expected in December.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Duracell Powers Star Wars Franchise

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Duracell will continue to benefit from the success of the revived Star Wars film series, as the official battery power for the Star Wars franchise and its new release, Rogue One: A Star Wars Story.

Berkshire Hathaway acquired Duracell from Procter & Gamble just as Star Wars: The Force Awakens hit a record-breaking $936,662,225 at the U.S. box office.

In conjunction with its campaign tied to the latest Star Wars film, Duracell is supporting the healing power of imaginative play with a donation of one million batteries to Children’s Miracle Network Hospitals nationwide. To launch its new holiday campaign, Duracell released an all-new 60-second commercial, “How the Rebels Saved Christmas,” featuring young patients forging an epic Star Wars duel while delivering a battery-powered toy to another patient’s hospital room.

“Tapping into our imaginations during the healing and recovery process reduces stress, pain and anxiety,” said Dr. Charlotte Reznick, Ph.D., an internationally recognized child educational psychologist, former UCLA associate clinical professor of psychology, and author of the Los Angeles Times best-selling book, “The Power of Your Child’s Imagination.” “I’m delighted that Duracell has embraced the fact that letting kids be kids through imaginative play is healthy – mentally, emotionally and physically.”

Duracell’s donation of 1 million batteries will power toys at 147 Children’s Miracle Network (CMN) Hospitals nationwide. The batteries will ship in early November and will arrive by the holidays.

“After visiting the Children’s Miracle Network Hospitals, we saw first-hand the impact that the power of imaginative play has on children and we were instantly inspired to support their mission,” said Ramon Velutini, Marketing Director of Duracell. “Imaginative play truly is the best medicine – that’s why this holiday season Duracell is on a mission to power long-lasting play for those who need it most.”

“There is no better way to do this than by partnering with Star Wars,” said Velutini. “The sheer power of this story has ignited imaginations for decades, and Duracell is excited to continue working with Star Wars to power the imaginations of the next generation.”

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BYD’s “SkyRail” Monorail Debuts in Shenzhen

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BYD Company has debuted its “SkyRail” monorail system in Shenzhen, China. The monorail was developed out of BYD’s five-year RMB 5 billion R&D project.

SkyRail marks the company’s entry into the multi-trillion yuan mass transit market.

SkyRail is billed as a strategic solution introduced by BYD to counter traffic congestion in cities around the world while also offering more convenient mobility to urban residents.

BYD’s 4.4 kilometer monorail line, which runs to its Shenzhen Headquarters, alleviates the traffic problems of 50,000 factory and management employees.

As a transportation solution, BYD’s SkyRail is designed to complement existing metro and bus systems to help create a layered transport network consisting of underground, roadway and elevated elements. It will become an integral part of optimized urban transport.

“Mass transit systems are an indispensable solution to alleviate traffic congestion in cities,” said BYD President and Chairman Wang Chuanfu at the launch ceremony. “As a rail transport option with relatively smaller passenger capacity, ‘SkyRail’ can complement existing public transport systems to create a layered transport system encompassing underground, roadway and elevated elements. At the same time, SkyRail provides urban residents with safe, comfortable and fast mobility while making a real difference to alleviate traffic congestion. BYD is the first privately run Chinese company to enter the mass transit market.”

SkyRail represents another strategic expansion of BYD, a pioneer in the field of integrated new energy solutions, building on its core industry expertise in battery, automobile and ECU. Today, BYD spans the IT, automobile, new energy and mass transit sectors and has developed a green portfolio encompassing solar, energy storage, EV and rail transit. BYD is well positioned to improve the daily lives of people through its innovations and technologies.

Named one of “China’s Most Admired Companies” by Fortune China in 2016, BYD has been committed to driving forward green mobility to help address the mega challenge and public concern of traffic congestion.

In 2010, the company announced its “electric public transport” strategy for green mobility, focusing on low-carbon electric vehicles as a prioritized public transport option to reduce traffic-related emissions in cities. This has now become a national strategy of China. At present, BYD’s electric vehicles are on the road in more than 200 cities in 48 countries and regions around the world.

To help address the challenges of urban transport, BYD set up a large R&D team consisting of more than 1,000 people. As the result of a RMB 5 billion (around 757 million USD) investment over the past five years, BYD successfully developed SkyRail, in an effort to provide a new solution to alleviating traffic congestion in cities and empowering layered mobility.

Traffic congestion is a major global issue. Urban residents in countries such as China, India, Indonesia and Brazil are increasingly concerned about congestion despite an increase in roads. There is high demand around the world for congestion alleviation solutions. To address this challenge, it is essential to relieve pressure on the road by moving some of the traffic to underground and elevated spaces. Therefore, it is inevitable that the development of layered rail transport is essential to transforming “cities on wheels” to “cities on rails.”

As a mass transit alternative with relatively smaller passenger capacity, BYD’s SkyRail delivers numerous benefits, including: capital expenditure 80% lower than metro, construction period two-thirds shorter than metro, excellent topographic adaptability due to higher climbing ability and smaller turning radius, reduced noise to allow travel through architectural complexes, visual integration into the cityscape thanks to transparent bridges and independent right of way, flexible management to allow for capacity between 10,000 to 30,000 passengers an hour (each way) and a high speed of up to 80km/h. It is very applicable to small and medium sized cities, heavy traffic routes, CBD’s and routes connecting tourist attractions in large cities.

Dramatic Cost Savings Compared to Subways

The electric monorail is a kind of traffic network which interconnects multiple transit backbones in the city at one sixth of the cost of a subway system.

According to BYD, the total market for monorails just in China is in the range of 3 trillion yuan ($450 billion).

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million is now worth roughly $1.77 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

CENACE Considers Joining Western Energy Imbalance Market

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Berkshire Hathaway Energy may soon be joined by Mexico grid operator CENACE in the western Energy Imbalance Market. CENACE has decided to explore EIM participation for Baja California Norte FOLSOM, California.

CENACE, a public agency, controls Mexico’s electric system and manages the wholesale electricity market as it transitions to a fully competitive market. The grid operator dispatched 68,044 megawatts of electricity in 2015 using more than 33,000 miles of high-voltage power transmission lines. Mexico energy policies mandate a renewables portfolio goal, including hydroelectricity, of 25 percent in 2018, 30 percent in 2021, and 35 percent by 2024.

As the western Energy Imbalance Market continues to yield proven benefits, the California Independent System Operator (ISO) and El Centro Nacional de Control de Energía (CENACE) announced that the Mexican electric system operator has agreed to explore participation of its Baja California Norte grid in the real-time market. CENACE and the ISO will begin a benefits assessment as well as enter into a cooperation agreement to support CENACE’s market implementation as directed by the clean energy memorandum of understanding between the Ministry of Energy of the United Mexican States and the State of California.

The MOU was signed by the Mexican Secretary General of Energy Pedro J. Coldwell and California Governor Edmund G. Brown Jr. in July 2014. The Baja California Norte region has two California grid connections — Otay Mesa and Imperial Valley (both also known as Path 45), but it is not connected to Baja California Sur or the Mexico mainland grid.

“CENACE’s Baja California Norte participation in the western EIM will enable it to benefit from the savings that a large geographic region can offer,” said Steve Berberich, ISO President and CEO. “Like our current EIM participants, we recognize that a successful energy future relies on regional collaboration to best plan and optimize resources, especially renewable power. We welcome CENACE’s interest and agreement to explore participating in the western EIM.”

CENACE General Director Eduardo Meraz agreed that participation in the western real-time market and the benefits realized so far by other participants is worthy of serious consideration. “Mexico has had a long, productive relationship with the ISO as we coordinate the management of our interconnected electricity grids,” Meraz said. “It is only logical for CENACE to carefully consider Baja California Norte’s participation in the western EIM, with its promises of lower-cost electricity and increased renewable integration.”

The ISO uses state-of-the-art technology to automatically match lower cost energy supply from across the West with demand every five minutes. This flexibility enables ISO grid operators to more efficiently use wind and solar resources from a wide geographic area where power output can change rapidly depending on wind speeds and cloud cover. The resource optimization occurs across the entire EIM footprint giving utilities new access to low cost generation. The cost and environmental benefits produced by the EIM to date have been positive.

Since it began operation with Berkshire Hathaway’s Oregon-based PacifiCorp in November 2014, the western EIM has realized more than $88 million in cost benefits. The real-time energy market also saved over 126,000 metric tons of carbon emissions by using excess renewable energy to offset fossil fuel generation that would have been needed to meet regional demand that otherwise would have been turned off to protect grid reliability.

The EIM currently operates in eight western U.S. states, including California, Oregon, Washington, Utah, Idaho, Wyoming, Arizona and Nevada.

Another Berkshire Hathaway utility, NV Energy of Las Vegas, entered the market in December 2015, while Arizona Public Service, based in Phoenix, and Puget Sound Energy of Washington began EIM participation on October 1.

Portland General Electric in Oregon is scheduled to enter in October 2017 followed by Idaho Power in April 2018.

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

McLane Company Launches Center for Category Innovation

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McLane Company Inc., Berkshire Hathaway’s wholly-owned supply chain services company providing grocery and foodservice supply chain solutions, has launched the McLane Center for Category Innovation (CCI).

Formerly known as the Lab Store, McLane rebranded this exclusive value-add service as the Center for Category Innovation to reflect not only the facility’s physical presence as a hands-on retail store where customers can explore innovative new products, but to recognize the service’s in-depth data analytics, industry-leading category development expertise, dedicated manufacturer expertise and unbiased guidance focused on helping customers design a product mix and planograms to achieve overall category excellence and increase profits.

CCI has proven extremely beneficial for many McLane customers, more than 70 of which visit at least once annually, keeping the facility booked upwards of 250 days a year.

“McLane’s Center for Category Innovation sessions allow category-leading manufacturers, McLane and the retailer to collaborate and create a geographically relevant assortment that meets the needs of the consumer,” said Alan Tobin, senior manager for category strategy and insights at The Hershey Company. “By utilizing a combination of shopper insights, industry trends and market and retailer data, the very best planogram is built.”

CCI Senior Category Development Analyst Jennifer Hutto said having the right participants in the room serves as a check and balance between multiple data sources. Additionally, the collective breadth of industry experience is one of the leading reasons why the CCI has been so successful in helping customers increase sales. She added, “We discuss overall performance of the categories, contributing factors that are affecting success, where the category is headed and how we hope to help drive future success with our customers.”

Tom Thumb Food Stores was in the midst of a major rebranding effort focused on delivering “Fast, Fresh and Friendly” service and renovating their stores with new products and flavor profiles to improve profitability. Through CCI, the collaboration of Tom Thumb Food Stores, McLane’s category managers, supplier partners, IRI and exclusive analytical resources from McLane’s extensive data warehouse, the chain was able to customize unique planograms tailored specifically to each store’s zip code, offering them in-depth knowledge of what would sell to their unique consumer demographics. As result, total purchases have increased over a three-year period with double-digit sales growth in their snacks, grocery and HBW categories. Tom Thumb Food Stores now visits CCI on an annual basis.

Hutto concluded, “Another key advantage of working with McLane and the CCI is the depth of information resources. With one of the industry’s most robust data warehouses, the CCI utilizes an aggregated class of trade-specific data and compares these findings with multiple syndicated data sources so that customers can make data-driven decisions on product assortment.”

© 2016 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.