September 30, 2002 Recent News
Ready-to-eat cereal: Positive signs in dollar sales
Organic Demand Maturing in Europe, Still Growing in North America
FDA to Require Trans Fat Content on Food Labels
Business Steps Up Campaign Against European Food Rules
Corn growers seek biotech investigation ACGA wants to know if GMOs are hurting corn exports
Ready-to-eat cereal: Positive signs in dollar sales
This article provides an industry perspective on the ready-to-eat cereal category based on industry executives and Information Resource Inc data through July 14, 2002. Although unit sales continued to decrease over the last year (down 2.8%), dollar sales increased 0.2% on the year, and year-to-date sales increased 2.7% through mid-June. Kellogg is now the category leader in dollar sales, with 3.6% growth to $2.2 billion, although volume sales fell 1% to 742 million pounds. Kellogg CEO Carlos Gutierrez credits the company's advances on a renewed focus on "adding value instead of reducing price." The successful launch of Special K Red Berries accounts for the majority of the growth realized, as it achieved sales of $84.4 million through June 14, compared to regular Special K sales of $127 million in the same period. Kellogg, Kraft and General Mills are all using alliances with the entertainment industry to build sales, although Kellogg's entire line of Disney-based products had sales of less than $49 million through June 14. General Mills is partnering with Dream Works SKG on multiple motion picture promotional programs, while Kraft is focused on major league baseball and the music industry. Kraft's Post cereals will be drawing on Nabisco brands for breakfast cereals, according to Sarita Nayyar, executive vice-president of Kraft North America and general manager of the Post division.
(Extracted from Milling & Baking News Aug 27,2002)
Organic Demand Maturing in Europe, Still Growing in North America
According to Robert Duxbury, Technical Product Manager for Organic Food at Sainsbury's in the U.K., the demand for organic food in Europe has risen dramatically in the past year, but seems to be leveling off a bit. Growth in organic food has leveled off at a 15% annual growth rate, allowing supply and demand to be more in balance. A few segments are experiencing over supply. Duxbury believes that a global certification process is needed. This would allow grocers to feel confident in locating and sourcing products at a global basis. Sherry Casey, Director of Regulatory Affairs for Loblaws in Canada, reported at the conference Loblaws believes there will be an explosion in demand for organic foods in supermarkets, because shoppers are unwilling to pay the high prices that are found at health food stores. Organic food at Loblaws accounts for less than ˝% of sales, but they are projecting that within 5 years organic foods will represent 5% of store sales. They will be increasing the number of organic products they carry from 150 to 400 in the next five years.
(Extracted from the IFOAM World Congress, Canada Posted September 5, 2002)
FDA to Require Trans Fat Content on Food Labels
The FDA announced in August that it would require trans fat content to be included in the nutrition facts label on foods. This rule was supposed to be issued over a year ago. Now it looks as though the rule will be issued in early FY 2003, which begins for the FDA on Oct 1. However, implementation will probably take a few more years. This rule will require national brands and private label brands to be tested for the level of trans fats in each product. Trans fatty acids are liquid vegetable oils that have been processed to be firm at room temperature and can be found in many processed foods as they extend shelf life. They are not truly saturated fat, but have been shown to raise the LDL or "bad" cholesterol while lowering the HDL "good" cholesterol. "Food manufacturers thought they were doing something good," said Jane Andrews, corporate nutritionist for Wegmans Food Markets, Rochester, N.Y. "They thought that if they altered them to behave like shortening or lard, it would be healthier than either of those fats." A new report issued by the Institute of Medicine, part of the National Academy of Sciences, on July 1, 2002, "claims that about 2% of the calories in the American diet is supplied by trans fats."
(Extracted from Supermarket News 5 Aug 2002)
Business Steps Up Campaign Against European Food Rules
Companies in North American and some North American governments are stepping up their efforts to persuade European Union officials to loosen up their labeling proposals for genetically modified foods. Currently the E.U. plans to place strict regulations on all GM foods and animal feed beginning next year. Foods or products with more than 0.5% of a GM ingredient must have a warning label. The current regulation allows 1%. European say they will not approve any new GM crops unless stricter labeling rules are in force. These rules will be virtually unworkable for many U.S. manufacturers who may not even be able to detect GMOs in their finished products. The U.S. government sees this move as protecting the EU from accepting imports from the U.S. and Canada and thus providing an unfair trade advantage.
(Extracted from Dow Jones International 16 September 2002)
Monsanto Battles Effort to Require Labeling of Genetically Modified Food; Industry Opposes Oregon Ballot Initiative
Monsanto and other players in the biotech industry, The Coalition Against the Costly Labeling Law, are planning to spend roughly $6 million to campaign against the Oregon ballot proposition to require labeling of genetically modified food. Their budget is 40 times the $150,000 being spent by the pro-labeling lobby. This is the first proposed legislation to appear on a state ballot regarding the labeling of GM foods. However, many policy analysts do not believe that this is only the beginning. The proponents of biotech say that labeling of this nature will mean higher food costs for the consumer. It is estimated that at least 70% of the processed food in the U.S. contains some engineered ingredients. Labeling supporters claim the industry is inflating the costs and consumers have the right to know what is in their food. Oregon Measure 27 would require that the packaging of any food or drink that contains as little as 0.1 percent of GM ingredients includes information telling consumers the nature of the altered contents. This measure includes the labeling of food prepared with genetically engineered enzymes and livestock fed GM grains. CACLL argues the labeling law would cost an average Oregon family $550 a year, because of the need to set up a system for inspecting, tracking and segregating food. Donna Harris, who is leading the effort to require labeling in Oregon, feels "as consumers, we should have a choice in the food eat."
(Extracted from the St Louis Post-Dispatch 19 September 2002)
Corn growers seek biotech investigation ACGA wants to know if GMOs are hurting corn exports
The American Corn Growers Association is asking the General Accounting Office to investigate the impacts of GMOs on corn exports. The ACGA saw a $40 million loss in exports last year and expect to see the same next year. This year the U.S. is exporting wheat for animal feed, but not corn. China has begun to export corn to markets once supplied by the U.S. While the ACGA believes some of the changes could be explained by transportation costs. They believe some of the changes are driven by the use of GM crops in the U.S. The corn growers want to know what the introduction of GM crops have cost in loss of customers and price to farmers and what it has cost taxpayers. The association believes there should be a system of segregation and identity preservation to allow the separation of GM from Non-GM crops.
(Extracted from the Grand Forks Herald 16 September 2002)
