Early last month, Diamond’s bid to acquire salty snack business Pringles from Procter & Gamble (P&G) collapsed after its CEO and chief financial officer were placed on administrative leave over improper accounting on walnut payments to growers.
Kellogg acquired Pringles for $2.7bn just a week later.
Win back walnut folk
Diamond interim president and CEO Rick Wolford. Diamond's team has taken a number of actions to address the issues facing the Company and to better position Diamond for the opportunities we see going forward,"
He said that the firm’s interim chief financial officer Mike Murphy and his team from Alix Partners were working to restate the company’s 2010 and 2011 financial results, though no date for restatement has been set
He added that Diamond had retained Dean Bradley Osborne Partners LLC as its financial advisor.
“Extensive efforts are underway to reset the company's walnut activities and to restore and strengthen Diamond's relationships with grower,” he said.
The company expects walnut related cost of sales to rise as increased global demand has driven prices 35% higher than last year’s crop.
Diamond said it had made share gains for some of its core brands, but the data came only a week after the company’s financial debacle.
Nielsen data for the 12 weeks ending 18 February showed Emerald had climbed 200 basis points, Kettle US 20 points and popcorn brand Pop Secret 110 points.
"Despite the challenges we have faced over the past several months, our brands continue to perform well and we believe the steps we are taking will best position Diamond for the future," said Wolford.
Is Diamond forever?
However, some market analysts feel tough times could be ahead for Diamond.
Euromonitor analyst Jared Koerten told this site: “Diamond faces a difficult road moving forward. “
“The company, which only months ago seemed on the verge of taking a major step forward in acquiring Pringles, now must try and pick up the pieces from this deal and move on.”
“It is not unreasonable to think that other companies would even look to acquire parts of Diamond’s business at this point.”