3M Joins Kraft for Quality Food (AVY) (DD) (JNJ) (KFT) (MMM)

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3M Food Safety, a division of 3M Company (MMM), introduced a new test for Lactic Acid Bacteria, called the Aerobic Procedure. In this test, a special combination of the 3MTM Petrifilm TM Aerobic Count Plate, a pH indicator and MRS (deMan, Rogosa and Sharpe) media is mixed with food and environmental samples to count the presence of lactic acid bacteria.

The procedure has been developed by 3M together with Kraft Foods (KFT), headquartered in Northfield, IL, USA. The two companies have a long working relationship.

The current test initiatives were taken by Kraft Foods to develop a simple solution for examining shelf-life and environmental samples for food products, such as raw and ready-to-eat (RTE) meats. Kraft Foods quality recently gave its approval to the test for internal validation and the method has been made available by 3M for use by food manufacturers worldwide.

The test for lactic acid bacteria is not mandatory as per the government norms, but the companies favor it to provide enhanced customer satisfaction.

The company generated significant free cash flow in second-quarter 2011. A strong cash flow position and continuously expanding sales revenue provide 3M ample resources to expand through acquisition and innovation of new products.

3M is globally recognized for its innovations, supported by some of its well-known brands, such as Nexcare, Post-it, Scotch, Scotch-Brite, and Scotchgard, who are leading the market. We believe that continued capital expenditure with new product launches should bolster its prospects across most end markets.

However, the company’s growth objectives are largely dependent on timing and market acceptance of its new product offerings, including its ability to continually renew its pipeline of new offerings and bring those to the market at acceptable price points.

Further, the results have been impacted by worldwide economic and capital market conditions. Negative consumer sentiment is affecting the retail store traffic. On the corporate side, lower employment levels are negatively reducing office supply purchases in most companies.

3M Company together with its subsidiaries operates as a diversified technology company with manufacturing operations spread over 60 countries worldwide. It has more than 35 business units organized into six segments: Consumer and Office, Display and Graphics, Electro and Communications, Healthcare, Industrial and Transportation, Safety, Security and Protection Services Business. The major competitors of 3M are Avery Dennison Corporation (AVY), EI DuPont de Nemours & Co. (DD) and Johnson & Johnson (JNJ).

We have a Zacks #5 Rank (short-term Strong-Sell recommendation) on 3M.

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