"Green" & Health News

• The fragile seafood ecosystem is generating action among food retailers. Readers and subscribers to Food Business Newsletter already know that Wegmans has joined the “Take Marlin off the Menu” movement designed to get retailers and shoppers to stop eating swordfish. Now Canadian retailer The Overwaitea Food Group (OFG) has become the first major retailer to support a policy of sustainable seafood. The company has 117 stores in Western Canada, and has promised to no longer sell yellowfin tuna, Chilean sea bass, and orange roughy among other threatened species. SeaChoice is providing consulting to grocers on implementing a sustainability protocol with backing from the David Suzuki Foundation, Sierra Club British Columbia, and the Canadian Parks and Wilderness Society. The retailer recognizes that some of the fish under pressure are inexpensive and replacements will likely cost more and drive off business, but believes “doing the right thing always pays off.”

• Another company pushing green and sustainability is Unilever through an online advertising campaign with National Geographic. Photos and video of its Lipton tea farms in Kenya are complimented by a Facebook fan page and Twitter alerts. Geographic has already partnered with Dow Chemical and Frito Lay, though the Society says it will not work with just any company. Lipton is looking for “rainforest certification” for its tea in an effort to borrow some of the magic that rainforest coffee has brought to companies like Starbucks. They currently purchase from approximately 500K farms, and plan on having all of them certified by 2015.

• Meat gets a bad rap. But there is another school of thought (probably financed secretly by the meat industry) that says eating meat has health benefits. It contains many important nutrients, including compounds like taurine, L-carnitine, creatine, conjugated linoleic acid (CLA) and endogenous antioxidants, according to Dr. Yeonhwa Park at the Institute of Food Technologists (IFT), a non-profit scientific group. Dr. Park says meat contains other important nutrients like iron and zinc that are hard to find or lacking in the average diet, as well as vitamin B-12. The key may be adding probiotics, fiber or omega-3 fatty acids may help improve meat's functionality as a food. Breeding and changing meat types could reduce cholesterol levels, one of the drivers in the rise of grass-fed beef. The "tough" stringiness of free range beef and its much-higher price have both limited the appeal of the concept with retailers and consumers so far. Probiotics added to fermented meats like sausage could offset the health concerns about nitrosamines, though there's skepticism it could fully counter those potential ills. In addition, the probiotic strains chosen would have to be able to overcome the salts used in their preparation. Omega-3 enriched meats could help offset the pressure on wild salmon stocks and the environmental concerns about fish farms and allegations such farms are encouraging the growth of disease and parasites in the wild varieties.

• The importance of inflammation and other conditions that previously were seen as symptoms unrelated to mortality have been changing, and the latest focus is psoriasis: people who have it suffer a 78% higher incidence of heart disease, 70% higher risk for stroke and a 98% higher incidence of peripheral arterial disease. According to a researcher, “psoriasis imposes the same level of risk as high blood lipids and smoking.”

This blog includes excerpts from a weekly round-up of food industry & food licensing news provided free to Broad Street Licensing Group's clients, and as a paid subscription service (6 months $695; 1 year $1,125). Too busy to keep up with the news wires & publications about the food business? If you or your company would like to subscribe to our news service, call Danielle Foley at Broad Street Licensing Group (tel. 973-655-0598) and ask for your free sample or click on our website.

How Beneficial Are Functional Foods?

Today is Black Friday, traditionally the biggest retailing day of the year, and the start of the Christmas buying season.

Functional foods— food that contains added vitamins, minerals, anti-oxidants, etc.— are big business.

According to the research giant Packaged Facts, they already comprise a $30.7bn market with predictions of 40% growth during the next five years. Mintel’s Global New Products Database tracked 68% new products over the past two years that were fortified with omega-3 (over 1,550 items). The products included orange juice, cereal, bread and peanut butter.

But these so-called “Frankenfoods” are raising concerns among scientists and dieticians over their true effectiveness. After all, most doctors will tell you that vitamin and mineral supplements, despite their popularity, rarely deliver anything approaching the benefits derived from naturally-occurring ones that come from eating a balanced diet. There is also concern about the cost-benefit ratio in fortified foods: a two-tablespoon serving of Hearts and Minds Peanut Butter with Omega-3 and Olive Oil has 100 mg of the beneficial omega-3, while a 3.5 oz. portion of salmon or other oily fish has 1,500 mg. A single slice of Wonder Classic Calcium Fortified Enriched Bread has only 10% of the daily recommended value, whereas a cup of milk has 30%.

The concept of using foods to deliver health additives began in 1924 when iodine was added to salt in the state of Michigan to fight goiter. The experiment spread to the rest of the country, and led to other additives, including niacin thiamin, riboflavin and iron in 1943 for breads and grains, which stamped out pellagra, a disease that ravaged the brain and skin, but which is unknown now. In 1998, the U.S. Food and Drug Administration (FDA) required adding folic acid to enriched grains in breads and cereals hoping to fight neural-tube defects in the unborn. A 25% reduction in infants born with the condition has been credited to the move, though some researchers are concerned too much folic acid can be toxic.

One advantage of dispensing additives in food over taking supplements is many are fat-soluble, meaning the body digests them better taken with food. There is also the fact that ¾ of Americans don’t reach the U.S. recommended daily allowance for vitamins and nutrients. Including them in food insures they are ingested, though processing destroys nutrients, so eating food in an unprocessed form is preferable. Protein-fortified pasta, for example, contains as much protein as meat, though they have higher simple carbohydrates, which contribute to obesity.

Additives may provide “cover,” too, for unhealthy foods. Is a bag of potato chips containing fiber mean it’s more than empty calories? Sports drinks provide nutrients but are overloaded with sugar, something the beverage industry plays down and most consumers ignore. Since the FDA does not regulate probiotics, omega-3 or other nutrients, manufacturers are not required to tell consumers the amount contained in their foods or whether it’s a lot or a little. Yet in the end, researchers concede fortified processed food is generally better than unfortified processed food.

This blog includes excerpts from a weekly round-up of food industry & food licensing news provided free to Broad Street Licensing Group's clients, and as a paid subscription service (6 months $695; 1 year $1,125). Too busy to keep up with the news wires & publications about the food business? If you or your company would like to subscribe to our news service, call Danielle Foley at Broad Street Licensing Group (tel. 973-655-0598) and ask for your free sample or click on our website.

No Posts for Thanksgiving

There will be no posts today, as it's Thanksgiving in the US. Tomorrow is Black Friday, traditionally the biggest retailing day of the year, and the start of the Christmas buying season.

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Non-Grocery Retailers Moving to Food

Regular subscribers to our subscription service Food Industry Newsletter already know that non-food retailers, especially Target, are looking to emulate Wal-Mart’s success during the Great Recession by selling more food (currently 40% of Target’s sales).

Now Family Dollar Stores (FDO) is ramping up its food sales with national brands like Jif peanut butter and Triscuits driving its recent 6.4% surge in sales. Even Toys R Us is pleased with its food offerings aimed at parents. In the past, these same retailers turned up their noses at the thin margins in the food category, but hard times are making foodies of them, especially as cost-cutting regimes put into place in past years to compete with Wal-Mart are paying dividends in efficiency.


Groceries and health & wellness products sold $243 billion last year making up 60% of Wal-Mart’s total revenue $405.6bn. With shoppers spending less, frequent repeats are key, something Family Dollar Stores has discovered by upping its food offerings. Overall, without Wal-Mart’s food sales, same store sales across the retailing sector would have fallen 4% in 2008 compared to the actual decline of just 0.5%. Profits were off 12% across the board, but would have tumbled 17%. The gap between the Bentonville Behemoth and the rest of the retail industry has closed as everyone has learned to cut costs from suppliers and in stores. The stock prices for retail have swung 180 degrees during the interim as Wall Street has lost its enthusiasm for discounters and are betting on discretionary retailers like Macy’s and Target once the economy recovers.


Wal-Mart’s customer base is also more vulnerable to tight credit and the soft job market, but the company insists new customers will make the difference. So far 17% of its increased traffic came from new customers, with new shoppers spending 40% more per visit than the company’s average transaction.

This blog includes excerpts from a weekly round-up of food industry & food licensing news provided free to Broad Street Licensing Group's clients, and as a paid subscription service (6 months $695; 1 year $1,125). Too busy to keep up with the news wires & publications about the food business? If you or your company would like to subscribe to our news service, call Danielle Foley at Broad Street Licensing Group (tel. 973-655-0598) and ask for your free sample or click on our website.

The Changing Demographics of Today’s Grocery Shopper

A new study tells us the typical shopper is changing:

For the past two decades, the composition of the “principal shopper” in the United States has shifted dramatically from a predominantly-female demographic. The male principal shopper has become more common, due partly to the many variations in the family structure, including more single-parent homes. Additionally, Americans are postponing marriage according to the U.S. Census Bureau: in 2008, the median age at first marriage was 27.4 for men and 25.6 for women vs. 25.9 for men and 23.6 for women for the 1988 census. Finally, with Americans living longer and large numbers of Baby Boomers retiring, men are shopping more than their fathers or grandfathers. Almost 1/3 of men are now the principal shopper, posing challenges for grocery retailers, manufacturers and brands.

According to one observer, “men buy, women shop: the sexes have different priorities when walking down the aisles.” Data from several analyses by the A.C. Nielsen Co. show females dominating all shopping channels except convenience/gas stores, but their share of shopping trips has fallen over the past four years especially. Channels where men have shown important increases in influence include convenience/gas outlets, warehouse clubs and grocery stores.

In terms of dollar amount, women continue to dominate, though the difference is not as large as one might expect, and is largely explained by the fact that female shoppers plan their trips while men traditionally are impulse buyers. But men have increased their average dollar basket size across all channels, especially in grocery where they have increased spending by 56% over the past 5 years. In the grocery channel, men’s share of dollars increased from 30% to 38%—a 27% increase versus women’s decline of 11%.

In a study commissioned by ESPN, there has been an upward trend in both the amount of dollars spent by men and their shopping frequency, with males as the primary or primary/secondary shopper rising by 4% and 3%. Total dollars spent has increased by 8% and 7% respectively.

Not surprisingly, a large portion of the purchases by men are in the usual, predictable categories of grooming care and alcoholic beverages: hair coloring (86%); depilatories (84%); gin (83%); scotch (81%); and pre-shave cosmetics (80%). But some surprising results showed:

• Men’s External Breathing Aids (61%)
• Canned Seafood (61%)
• Refrigerated Juices, Drinks (61%)
• Prepared Food-Ready-to Serve Stew (59%)
• Herbal Package Tea (57%)
• Prepared Food-Ready-to Serve Lasagna (55%)
• Health Bars & Sticks (54%)
• Non-Sliced Refrigerated Lunch Meat (53%)
• Refrigerated Yogurt and Shakes (52%)
• Dishwasher Rinsing Aids (52%)

Traditional media ad buys fall into three categories:

1. Programming aimed primarily at females (network soap operas and female-targeted cable networks like Lifetime and Oxygen)

2. Programming aimed at both genders evenly (network prime time, broad-based cable networks like USA Network)

3. Programming that skews males (primarily sports networks)

The new shopper will mean marketers must reassess their ad buys and strategies. A study of media scheduling for a leading cold remedy and how that schedule delivered both male and female buyers found that men made up 48% of the brand’s users and 48% of sales occurred during shopping trips where the male head of the house was the primary/secondary shopper. The brand’s ad buy schedule included a wide mix of broadcast and cable networks, but focused primarily on women. Sports networks accounted for only 2% where only 38% of the brand target impressions fell against men, far below their share of the spend. Despite 20 years of trying to figure out the male shopper, marketers clearly have a ways to go.

This blog includes excerpts from a weekly round-up of food industry & food licensing news provided free to Broad Street Licensing Group's clients, and as a paid subscription service (6 months $695; 1 year $1,125). Too busy to keep up with the news wires & publications about the food business? If you or your company would like to subscribe to our news service, call Danielle Foley at Broad Street Licensing Group (tel. 973-655-0598) and ask for your free sample or click on our website.

I Need a New Drug

One of the holy grails for food companies is nutraceuticals: food that improve health.

General Mills thought it had a breakthrough with the cholesterol-lowering claims for its Cheerios brand of cereal. Unfortunately for them, the U.S. Food and Drug Administration (FDA) has a different idea. It has told the food giant to change its packaging or risk an injunction and even seizure of product. The FDA specifically took issue with claims on the box that say “you can Lower Your Cholesterol 4% in 6 weeks” and “Did you know that in just 6 weeks Cheerios can reduce bad cholesterol by an average of 4 percent? Cheerios is ... clinically proven to lower cholesterol. A clinical study showed that eating two 1 1/2 cup servings daily of Cheerios cereal reduced bad cholesterol when eaten as part of a diet low in saturated fat and cholesterol.”

These claims classify the cereal as a drug according to section 201(g)(1)(B) of the Federal Food, Drug and Cosmetic Act. Additionally, it falls under the “new drug” section 201(p) of the Act because it is not GRAS (generally recognized as safe) and effective in treating or preventing hypercholesterolemia and coronary heart disease. General Mills is basing its claim on FDA-approved science for soluble fiber, not on any specific studies.

The FDA says it was upset about the Cheerios claim being unsupported by any specific studies, as well as claims for a specific percentage reduction (not allowed under FDA guidelines). The agency also includes the company’s website as part of the “labelling” issue. The allowable health claims for soluble fiber can say “diets low in saturated fat and cholesterol and high in fiber-containing fruit, vegetable, and grain products may reduce the risk of heart disease.” General Mills omitted any reference to fruits and vegetables, implying that Cheerios alone would reduce cholesterol significantly.

The company says it will work with the FDA to resolve the issue, which is sort of like saying you’ll work with a truck bearing down on you to prevent an accident.

This blog includes excerpts from a weekly round-up of food industry & food licensing news provided free to Broad Street Licensing Group's clients, and as a paid subscription service (6 months $695; 1 year $1,125). Too busy to keep up with the news wires & publications about the food business? If you or your company would like to subscribe to our news service, call Danielle Foley at Broad Street Licensing Group (tel. 973-655-0598) and ask for your free sample or click on our website.

Tasty Tidbits

• Somebody’s lying: 56% of consumers who regularly frequent Starbucks claim they also buy coffee from McDonald’s regularly. The figure is up from 51% last August, according to a Morgan Stanley & Co. survey. Nearly 47% of Starbucks customers claim to purchase McDonald’s coffee at least 1x/month, while 42% of the Mickey D customers insist they go to Starbucks the same amount.

• The US convenience store channel is expected to grow 5% annually over the next five years according to a report by research firm RNCOS.

• Organic dairy producer Stonyfield Farm claims adjusting its cows’ diets with more omega-3 feed like flax and grasses has cut greenhouse gas methane emissions from burping by 12-18%. I kid you not.

• With the EU set to ban most synthetic dyes in foods, the rush is on to find natural substitutes. Many food dyes are petroleum-based, and even though they are approved by the FDA, the EU ban is prompting even US companies to find substitutes. The current leading contender? Purple carrots.

• Six German states have banned Red Bull Cola (made in Austria) for minute traces of cocaine. The company denies the charge, saying it uses decocainized cocoa leaves that are safe and a common flavor ingredient.

• Those in the know understand Chinese restaurants offering to prepare dishes without MSG (monosodium glutamate) are really just telling diners what they want to hear. Now those diners can relax and stop worrying after a new study says the flavor enhancer does not cause nor contribute to allergic reactions (the so-called “Chinese restaurant syndrome”).

• A German research team reports finding a genetic link between gum disease (periodontitis) and coronary heart disease (CHD). The University of Kiel group found both diseases showed a common genetic variant on chromosome 9. This digest reported earlier that scientists were unsure why gum disease and heart disease seemed to occur in common, with theories that inflammation in the gums either introduced bacteria into the system, or that inflammation signaled an underlying health problem. The team reports that obesity, smoking and diabetes will all worsen the problem, and that dentists should take more aggressive treatment courses with much younger patients than previously thought. In a related study, Cincinnati Children’s Hospital Medical Center has done ultrasound measures of the carotid arteries of young people and found a link between a thickening of the walls and possible later heart disease, especially for those who are obese or have diabetes.

• Krispy Kreme continues to flounder, posting dismal stats for the first quarter: income off 54%, down to $1.868MM (3¢/share) from $4.034MM (6¢/share) this time last year. The huge drop was explained as due to $2.357,000 in impairment charges and lease termination costs. Sales were off 10% to $93.42MM, though company-owned locations reported a modest 2.1% increase.

• Mountain Dew is licensing the names and artwork for two new flavors from the hugely-popular “World of Warcraft” online role-playing game (11.5 million players estimated worldwide). Limited-edition line extension for the Game Fuel sub-brand will feature flavors Horde Red and Alliance Blue (opposing factions of the subscription-based game).

• Whole Foods Market has signed an agreement with Lady Moon Farms and Alderman Farms of Florida in support of the Coalition of Immokalee Workers’ (CIW) "penny-per-pound" program which claims it will improve wages for tomato harvesters.

• And celebrity chef Gordon Ramsey has admitted his ego got in the way and nearly cost him his culinary empire (not to mention the bagged prepared meals he was serving in place of fresh-made).

Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)

Health Updates

• New research seems to show women who have their children later in life live longer. But the benefit seems to be good genes and not related to the childbearing itself. In a sample of 14,123 Utah women, those who had their last child between age 41-44 were 6% less likely to die after 50 than women who had children earlier. For those who had a child at 45 or later, the risk was 14% lower. The advantage did not apply to women who had fertility treatments, and seemed to carry over to their brothers (though not their brothers’ wives).

• In other news relating to women’s health, A study of 120,755 postmenopausal women found no increased risk of breast cancer among those who are meat. The study took into account all kinds of meat (red vs. white), levels of doneness and cooking temperature.

• According to a new study from the Spanish National Research Council, a gluten-free diet may be detrimental to “gut health,” a worrisome development for the body’s immune system. Allergic reactions to wheat and what by-products have fueled the growth of the gluten-free market, which has grown at an average annual rate of 28% for the past four years, reaching $1.56bn in 2008 (estimates show sales topping $2.6bn by 2012)but loss of the beneficial Bifidobacterium and Lactobacillus, along with increases in the problematical Enterobacteriaceae and Escherichia coli (e.Coli) have scientists concerned. Coeliac disease, an intolerance to gluten in wheat, reportedly troubles 1% of children and 1.2% of adults. There is no known solution to the intolerance other than avoiding wheat in the diet. Probiotics and other “gut enhancing” products have been popular in Europe for some time, and are just catching on in the U.S. (e.g., Danone’s Activia yogurt).

• Meanwhile concerns about the nutritional shortcomings of gluten-free products have been voiced by Harvard Medical School. Gluten substitutes typically derive their starch from rice, corn or potatoes. The gluten-free market, currently at $1.56bn, is estimated to reach $2.6bn by 2012 and is growing at an annual rate of 28%. Statistics show only 40-60K Americans have been diagnosed with celiac disease, the auto-immune condition triggered by gluten in the diet, but the U.S. government projects up to 3MM are undiagnosed (1% of the total populace).

• Bad news—according to a study in the Journal of the American Dietetic Association, only 7.9% of adult Americans are eating dry beans or peas on any day. Eating ½ cup of dry beans or peas not only assures higher intake of fiber, but also protein, folate (important to pregnant women), zinc, iron and magnesium. The beans and peas also lower the intake of saturated fats and total fats. Now, if they could just find a way to eat the damn things without a ½ gallon of water…

• Another nail in the coffin for the chemical bisphenol A or BPA has come from a Harvard School of Public Health (HSPH) study confirming it can leach from polycarbonate drinking bottles into humans. The chemical industry has either denied this or insisted the amounts were trivial. Participants who drank for a week from a polycarbonate bottle showed a 2/3 increase of BPA in their urine. BPA is used to make polycarbonate and other plastics, and has been mentioned as a possible contributor to heart disease, diabetes and disruption of the reproductive organs in animals and humans. It is used in reusable drinking bottles, baby bottles and sipper cups, as well as dentistry composites and sealants, and in the lining of aluminum food and beverage cans. The leader of the study expressed concern that heating baby bottles would increase the level of leaching. In 2008 Canada banned the use of BPA in polycarbonate baby bottles, and some manufacturers have voluntarily eliminated BPA.

• The furor over BPA is getting ugly as a Milwaukee Sentinel article published a memorandum from a closed-door meeting of manufacturers, metal industry trade association members and lobbyists where it was suggested a “pregnant woman” be chosen as the spokesperson for BPA. Those in favor of finding a reputable scientist to act as a spokesperson for the chemical’s use in assuring a sterile can lining were told no scientists would agree to speak up for BPA. The North American Metal Packaging Alliance (NAMPA) insisted after the article’s publication that they had not attended in order to “whitewash” the chemical, and claimed the vital service BPA provides in assuring the safety of canned foods & beverages is being overlooked by an “hysterical” media. In addition to choosing a pregnant woman to front pro-BPA media ads, the group suggested claiming the poor and ethnic minorities would feel the greatest impact from a BPA ban since they eat more canned foods. Meanwhile in response to growing Congressional pressure and the passage of BPA bans in Chicago and by the Minnesota state legislature, the FDA announced it will rule shortly on whether its ruling of “safe” last year for the substance would stand. Critics have insisted the agency was overly influenced by chemicals industry-financed research and did not take into account neutral studies showing potential impact on humans.

• Walgreen and the State of Delaware are heading for a confrontation following the chain’s vow to end filling state Medicaid prescriptions. The chain claims it handles over 60% of Medicaid prescriptions, and is losing money on every one, especially given Delaware’s low usage of generic alternatives (63%, among the worst in the nation). But with Delaware’s House and Senate health committees threatening to end Walgreen’s $44.4MM in state employee health-plan prescription business, things could get ugly quickly.

Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)

Swine Flu Fallout in the Food Biz

Swine flu is making U.S. hog farmers sick thanks to bans on pork imports by China, Russia and a dozen other counties.

Over the past months, a fall in hog prices attributed to groundless fears about swine flu have costs producers over $81MM. There is no connection between pork products and the disease, which can only be spread by human-to-human contact. Up to 20% of U.S. pork goes for export, with China and Russia big purchasers: last year China bought $700MM ranking 3rd behind Japan and Mexico; Russia ranked 5th at $476MM. Pork industry observers see politics and the chance to grab market share for its domestic producers as the real reason behind the bans. China had already refused to buy any U.S. pork from hogs given the drug ractopamine designed to produce leaner meat, despite the drug’s having been approved by the Federal Drug Administration and 26 other countries.

That's likely because the outbreak of SARS in 2003 left China smarting over criticism it hid the extent of the epidemic, and it has reacted with unusual speed and obstinacy this time. Russia insists on inspections of all U.S. pork facilities, but has banned imports from over 30 plants without much explanation. The plants make up 50% of the U.S. export capacity to the Russian market. Russia’s actions are in violation of the World Trade Organization rules, but it isn’t a member. Russia has made no secret of its desire to become self-sufficient in both pork and chicken, yet denies any commercial motives for the bans. Other countries with bans on U.S. pork are Ukraine, Azerbaijan, Kazakhstan, St. Lucia, Indonesia, Thailand, Bahrain, Uzbekistan, Kyrgyzstan, Jordan, Macedonia, South Korea and Malaysia.

Domestic demand for pork has recovered after an initial drop following the outbreak of swine flu. Industry sales topped $97bn in 2008. Information geeks will appreciate that 1/3 of American hog production comes from Iowa with North Carolina, Illinois and Minnesota making up the lion’s share of the remainder. A fall in commodity prices had seemed like good news for pork producers.

Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)

My mother always warned me against extremes, so it’s no wonder some casual dining chains are feeling uncomfortable: it’s time for the Xtreme Eating Awards.

The Center for Science in the Public Interest, a gadfly non-profit consumer group, named six of them for “shattering the barrier of caloric decency.” The Cheesecake Factory got three of the nine “citations” that exceeded the recommended daily allowances for sodium, saturated fats and calories. Jayne Hurley, the nutritionist who conducted the study, used to think of fettuccine Alfredo as “a heart attack on a plate,” but finds that dish almost healthful in comparison. Below are the “winners” and their reasons for making the list:

• The Cheesecake Factory’s Philly Style Flat Iron Steak: 2,320 calories, 47 grams saturated fat, 5,340 milligrams sodium

• Olive Garden’s Tour of Italy: 1,450 calories, 33 grams saturated fat, 3,830 milligrams sodium

• Chili’s Big Mouth Bites: 1,580 calories, 28 grams saturated fat, 2,930 milligrams sodium

• Applebee’s Quesadilla Burger (with fries): 1,820 calories, 46 grams saturated fat, 4,410 milligrams sodium

• Chili’s Baby Back Ribs (half rack): 490 calories, 12 grams saturated fat, 2,050 milligrams sodium

• The Cheesecake Factory’s Fried Macaroni and Cheese: 1,570 calories, 69 grams saturated fat, 1,860 milligrams sodium

• Uno Chicago Grill’s Mega-Sized Deep Dish Sundae: 2,800 calories, 72 grams saturated fat

• Red Lobster’s Ultimate Fondue: 1,490 calories, 40 grams saturated fat, 3,580 milligrams sodium (plus 150 calories for each biscuit)

• The Cheesecake Factory’s Chicken and Biscuits: approximately 2,500 calories

Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)

Retail World-Beaters

According to Supermarket News, the top 25 retailers in the world are:

1. Wal-Mart Stores— U.S. (sales in billions: $401.1; # of stores: 7,873 stores)
2. Carrefour— France (S117.3; 15,430)
3. Tesco— U.K. ($99.7; 4,300)
4. Metro Group— Germany ($98.6; 2.195)
5. Schwarz Group— Germany ($80.9; 9,300)
6. Kroger— U.S. ($76; 3,637)
7. Rewe— Germany ($73.4; 13,000)
8. Costco— U.S. ($71; 544)
9. Aldi— Germany ($65.7; 9,000)
10. Auchan— France ($57.8; 2,777)
11. Seven & I— Japan ($54.6; 25,137)
12. AEON— Japan ($50.6; 15,824)
13. Edeka— Germany ($49.1; 13,028)
14. Leclerc— France ($47.3; 980)
15. SuperValu— U.S. ($44.6; 2,421)
16. ITM (Intermarché)— France ($44.3; 4,075)
17. Safeway (USA)— U.S, ($44.1; 1,739)
18. Woolworths (AUS)— Australia ($44.2; 1,739)
19. Casino— France ($42.0; 9,967)
20. Ahold— The Netherlands ($37.6; 2,897)
21. Sainsbury— U.K. ($34.7; 792)
22. Tengelmann— Germany ($32.7; 7,450)
23. Coles Group— Australia ($30.9; 3,370)
24. Loblaw— Canada ($28.9; 1,036)
25. Delhaize Group— Belgium ($27.8; 2,673)


Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)

Another GM Under Fire

General Motors isn’t the only “GM” under fire.

A group of food activist organizations from the US, Canada and Australia has been formed to oppose the wheat industry’s plan to push ahead rapidly with the commercialization of genetically modified (GM) wheat. While there are no GM varieties of wheat commercially available, the industry is looking at the chance to control pests and disease through genetic modification. The group insists the plan will centralize the seed supply in the hands of a few multinational companies, some of which (e.g., Monsanto) have mixed records as corporate citizens.

According to the group, local varieties of wheat are crucial for coping with disease, drought and other stresses on the wheat gene pool, and they’re concerned a small number of wheat varietals would make the world’s food supply dangerously vulnerable to a new pest or disease. Since cross-contamination from GM wheat is virtually impossible to stop, large scale commercialization could threaten the varieties adapted for local conditions. The seed companies counter by saying wheat acreage is down as farmers turn to other GM crops.

The high cost of GM crops has resulted in a decline in Canada. Additional argument against GM wheat (also referred to as GE or “genetically engineered”) includes resistance from consumers who don’t yet trust GM crops and meats. The anti-GM group consists of the Center for Food Safety, National Family Farm Coalition, Western Organization of Resource Councils, Organic Consumers Association (all US-based), the National Farmers Union, Canadian Biotechnology Action Network, Union Paysanne, Union Biologique Paysanne, Réseau Québécois contre les OGM, and Saskatchewan Organic Directorate (Canada), and the Network of Concerned Farmers, Organic Federation of Australia, Biological Farmers of Australia, and Gene Ethics (Australia). Given the resistance to GM foods, it’s not surprising some companies are developing alternatives that will increase yields, be more resistant to pests, yet not involve genetic modifications. Dow AgroSciences and World Wide Wheat (W3) have announced a partnership aimed at combining Dow’s strength in commercializing seed traits and W3’s experience in plant breeding research to bring the “next generation” of wheat to market.

Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)

Supermarkets Innovate

With margins in the retail grocery business thin despite soaring sales as consumers eat more at home (1.84% in the $547.1bn channel according to the Food Marketing Institute), it’s no surprise the chains are looking to innovate, mostly as a means of attracting and keeping the other’s guys customers.

With an average supermarket carrying almost 47K items, offering unique products remains a challenge. Analysts say the average grocery store loses or gains 10% of its customer base in the course of 12 months, so turnover is key. New ideas for wowing shoppers without just cutting prices include “smart” shopping carts that help them find what they want or flash a product review, mobile coupons beamed to your email or cell phone, and self-checkout lanes that give shoppers a sense of empowerment for doing what traditionally a pimply-faced teenager was paid to do for them. let consumers help themselves. Smaller “footprint” stores may be a thing of the future, though so far neither Wal-Mart’s “Marketside” nor Tesco’s “Fresh & Easy” have exactly torn up the channel. In fact, Wal-Mart is rebranding its small footprint operations in Arizona with a new name (“Marketside by Wal-Mart) and a new logo.

Despite the lack of a breakthrough in that format, imitators are poised in the wings, including, Safeway’s “Market,” and Supervalu’s “Urban Fresh.” Not just smaller than the full-sized supermarket, the smaller stores offer more ready-made meals, along with extras like in-store baby-sitting. Profits are supposed to come from repeat business over large bulk buying, though Tesco especially is still struggling to find a winning combination of products and marketing. Minority shoppers are attracting more attention, too, with Wal-Mart’s “Supermercado” and Publix’s “Sabor” catering to Latinos, the largest American minority. Other potential innovations are less about helping the shopper and more for the store’s bottom line: Wal-Mart invested $10MM whipping up “Smart Network,” an in-store television system providing product information and ads on the viewing screens of carts, and Kroger is painting its black checkout conveyor belts with ads. The back-of-the-store hasn’t escaped the innovation trend, either. Wal-Mart was an early adaptor to RFID technology for tracking inventory, and is now using embedded microchips in goods to alert employees when supplies on the shelves are running low, or to tip off the in-store ads to work in tandem with the right products, especially when supported by national TV campaigns. A recent test of the system with Proctor & Gamble kicked sales up almost 20%. Future projects include more private label products (especially in organics) and in-store restaurants at Whole Foods and Wegmans.

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Russ Klein to leave Burger King

This breaking news says that Russ Klein, CMO of Burger King, is leaving effective December 15th.

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Coffee Heats Up by Chilling Out

Iced coffee has shown double-digit jumps for years, up 20% this year already, which is good news for 7-Eleven, Inc.

The company intends to go head-to-head with Dunkin’ and McDonald’s by debuting a new iced coffee that will be supported by a major marketing campaign stressing value (i.e., a lot), price and— love. The new flavors of (what else?) French Vanilla and Mocha will be available at 4,500 U.S. locations from machines that let customers dispense the drink over ice in clear cups. The month-long ad campaign will include radio spots, outdoor, metro rail & bus transit buys, in-store signage, and POP displays. Online viral marketing will include a new iced coffee website with email couponing.

The ads are aimed at the “traditional iced coffee consumer,” typically young adults 18-34 (at 39% the largest group of iced coffee consumers). Ad lines include some serious double-entendres, including “I've never been this cheap before” and “You have expensive taste.” Taglines for print ad and online tout the theme “I look good in any cup size” and “Trust me, I'm a handful.” The campaign comes from FreshWorks, a consortium of Omnicom shops set up specially for 7-Eleven’s ad needs.

While the flavor profile is the same nationally, one exception is Long Island, NY, the birthplace of coffee-to-go four decades ago (thanks to 7-Eleven). Long Island tastes require a stronger flavor and less sweetness, and with 30% of all cold coffee sold in the Northeast, the company doesn’t intend to rock the java boat. The iced coffee will help the company move its demographics away from the usual (male) since more females prefer the iced version. The iced-coffee category already drinks up 15-20% of sales in QSRs and coffeehouses, and Nielsen AdViews Competitive Tracking estimates the category could top 1 trillion cups in 2009.

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Getting Mall'ed

A joint study by Scarborough Research & Arbitron shows that teenagers have an intimate connection to shopping malls. No, really. They tend to spend more than 2 hours per visit and over half of them spend at least $50 with nearly 1/3 (29%) topping $100. And in a result that will warm the hearts of ad men and women everywhere, 95% of teenage shoppers notice some kind of mall advertising.

91% notice poster display ads at the mall
85% notice hanging ad banners
77% notice sampling
58% notice promotional events
57% notice TV/video screens (duh)
48% notice interactive displays/kiosks
31% notice moving images projected on the floor or walls

The study grouped their activities into four categories: shopping, eating, socializing and entertainment. Over 70% shop, 57% eat, 49% socialize and 40% are at the mall to be entertained (movies, video games, etc.). Yet spending sprees don’t mean they’re not concerned about the current economy: 77% worry how it will impact their families and their future, and 66% look for ads that feature sale items. Three fourths (75%) said sales and discounts are more important to them now than in the past. A significant group (37%) go to the mall less often, though nearly twice as many (62%) are going more often or at least as much as in the past. Spending for over half the group surveyed has increased or stayed the same. A free webinar can be viewed at www.scarborough.com/teenwebinar/.

This study was attached to the newsletter version of this provided to our clients and subscribers.

Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)

Brands Still Pull

Despite recent gains by Private Label products, brands continue to hold their value. Research firm Harris Interactive has released the results of their EquiTrend® annual brand equity study measuring more than 1,000 brands across 39 categories. The top ten food brands are ranked below:

Rank - Brand - Overall Equity Score
1. M&M’s Plain Chocolate Candy 79.54
2. Hershey's Kisses Chocolate Candy 79.45
3. Arm & Hammer Baking Soda 78.30
4. Reese's Peanut Butter Cups Chocolate Candy 78.14
5. Hershey's Milk Chocolate Candy Bars 78.06
6. Kleenex Facial Tissues 77.47
7. Campbell's Soups 77.35
8. Google 76.70
9. M&M’s Peanut Chocolate Candy 76.61
10. Crayola Crayons 76.61

In the restaurant category, Subway finished first.

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Dueling Bombast

Did you know your local fast food restaurant is knowingly selling cancer-laced chicken?

That's the claim of a lawsuit by the Washington-based Cancer Project. The shadowy group has filed a lawsuit in Hartford, CT claiming McDonald's, Burger King and others are peddling chicken that contains PhIP, and they want a warning on the products. While the group claims they aren't interested in stopping the sale of fast food chicken, the restaurant industry is claiming the lawsuit is part of the "animal rights movement" and its goal of ending the consumption of meat.

Their solution? Bring out their own flacks. The preposterously-named Center for Consumer Freedom (CCF) has issued its own press release charging this is all part of a "conspiracy." The Center is also Washington-based, and is funded by the restaurant, food manufacturing and supermarket industries.

Regular readers of this blog know I've talked about the hazards of meat. Americans especially eat too much meat, and the natural resources expended on meat production are a huge drain on the planet, as well as the cause of extra greenhouse gases from the methane in cow, pig and chicken scat, the fertilizer used to grow the corn that fattens up beef, or the gasoline burned up bringing the meat to market.

But is the answer a lawsuit to require restaurants to notify patrons that eating a grilled chicken (considered a "better for you" alternative to red meat!) is a toxic threat? Cooking meat releases chemicals that can be carcinogenic, though medical researchers aren't entirely sure in what amounts they constitute a threat. The current controversy about cooking potatoes at high heat (which produces a potentially-carcinogenic chemical called Acrylamide) is another example.

The animal rights and vegan groups would have us only eat plants. Is that a better alternative? Maybe. But shouldn't that be my choice?

Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)

More World News

• Japan remains a prime focus of all companies doing business internationally, and its supermarket industry has been undergoing a major restructuring. Large retail groups (both domestic and foreign) are taking over the mom & pop stores that used to dominate the Japanese grocery business. Among the new players are Wal-Mart Stores Inc. and the U.K.’s Tesco PLC, but also Germany’s Metro AG. The key advantage the foreigners have is the strength of their enormous supply chains, which favor large footprints. Merging with some of the regional players may allow either one or both to take market share rapidly. The attraction of the Japanese market might puzzle observers, since its overall size has declined every year since hitting their peak in 1998 of ¥16.8 trillion. By last year, sales had shrunk to ¥13.3 trillion according to the Japan Chain Stores Association. In contrast, domestic companies have no growth options other than consolidation and improving their supply chain efficiencies. The Japanese population is aging more rapidly than almost any other industrialized power, and the bursting of the country’s real estate bubble has tarnished many businesses, so much so that not all international retailers are looking to play the game: France’s Carrefour S.A. left in 2005 after selling its operations to Aeon Co. (Japan’s #2 supermarket chain by revenue). Even Wal-Mart has found it harder to turn around its local subsidiary Seiyu Ltd. Tesco is working its way into the local market through a Tokyo chain Tsurukame, and is now bringing its convenience store-sized Tesco Express concept to the country. The supermarket channel is led by Seven & I Holdings Co. with sales of ¥5.8 trillion.

• While Carrefour may have fled Japan, it is looking to enter the Russian market in a big way by acquiring 75% of the supermarket chain Sedmoi Kontinent for $1.25bn (938 million Euros).

• A fight is looming with China over U.S. bans on the importing of cooked chicken products. China has already filed a complaint with the World Trade Organization (WTO). Chicken products were blocked in 2004 following concerns about avian flu. China imported $442MM worth of American poultry products in 2008, including chicken feet, which are a delicacy in Chinese cuisine, but are considered offal by most Americans.

• A German administrative court has upheld a ban on Monsanto Co.’s genetically engineered MON810 corn as a threat to the environment. Monsanto currently is suing to have the ban overturned, and had sought a temporary lifting prior to the outcome of the lawsuit. Although the EU authorized the sale of the seeds in 2004, Germany’s Agriculture Minister, Ilse Aigner, banned both the sale and planting of MON810 seeds. The company touts the corn’s ability to produce toxins that ward off insects, but critics worry about the spread of the corn’s DNA to other strains or to the wild, and potentially might harm beneficial insects.

• In another regulatory matter, a minor trade war was averted when the U.S. agreed to shelve a proposed 300% tariff on Roquefort cheese from the EU as both sides worked to settle their differences. It’s about time….

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Health News

• Regular readers of our Food Business Newsletter know that bisphenol-A (BPA) has been under fire over concern about the chemical leaching into foods in the containers lined with films or made from the plastic hardener. Now Minnesota has become the first US state to ban the use of the controversial substance in baby bottles. Look for action from Connecticut and California to follow. Now Consumers Union (the publishers of Consumer Reports) has found BPA in a cross-section of canned goods in levels that are disturbing for small children.

• A new study from Duke University Medical Center in North Carolina of 5,888 men and women older than 65 has found that women are more-likely to suffer from obesity and arthritis than men. The gap between the two genders in these areas can be as much as 45%. Not surprisingly given the problems of osteoporosis, women are much more likely to have bone fractures. Additionally they are more prone to vision problems and bronchitis, while men have more emphysema, heart disease, congestive heart failure, stroke, diabetes and hearing loss. Most surprisingly, they were more likely have problems walking because of constrictions in the arteries of their legs.

• A study of over 452K adults from the European Prospective Investigation into Cancer and Nutrition (EPIC) has shown those who ate the highest amounts of fruits and vegetables had a 14% reduction in rates of colorectal cancer, along with a 24% reduction in the risk of colon cancer.

• While there is some skepticism about the value of probiotics, a Finnish study has uncovered some cosmetic advantage for pregnant moms: women who were given probiotics and dietary counseling during their pregnancies were less likely to be obese afterward than those who were given counseling alone.

• The craze for antioxidants may be turning out to be another wild goose chase: new research is showing they undermine the healing process in muscles after exercise, reducing the benefits.

• With most women believing they already dash through life, there’s new evidence they need to DASH as well: “The Dietary Approaches to Stop Hypertension” (DASH) diet is known to lower blood pressure may also help prevent heart attacks in women by reducing blood pressure and lowering low-density lipoprotein (LDL, or "bad") cholesterol levels. A research team from Beth Israel Deaconess Medical Center in Boston analyzed data from 36,019 Swedish women aged 48-83, and found during a seven-year monitoring program that the 25% with the highest DASH diet scores had a 37% lower rate of heart failure than the 25% with the lowest DASH diet scores. Those within the top 10% of DASH scores had a heart failure rate half that of the women with lowest DASH scores. The diet includes a high intake of fruits, vegetables, low-fat dairy products and whole grains with only moderately high protein consumption, with low total fat and saturated fat. Scientists speculate the lower levels of LDL cholesterol, the estrogen-like benefits of some of the nutrients, and less oxygen-related cell damage are behind the diet’s benefits.

• India is a market getting more attention than just for its call centers. Retail chain Reliance Retail’s Fresh stores are lowering prices to strengthen their “value” positioning to compete better with the local mom & pop grocers. The company may be cutting back on some perks associated with big stores, though the chain denies it will be retracting services. Reliance Retail tried the club store format under the brand name Ranger Farms without noticeable success. Value positioning requires a sophisticated supply chain, something Reliance has over its smaller competition. Food is one of India’s fastest-growing retail segments (more than 25% growth annually), so the chain’s 900 stores (in 80 cities and 14 States) is looking to try different footprints and to stress its private label business.

• While still just a possible link, the notion that childhood obesity may be contributing to the rise in food allergies has been advanced by a recent study. Scientists call the evidence “tantalizing,” and theorize that inflammation from the stress of obesity may be the contributing factor. If this line of study yields more evidence to support this theory, pressure on the QSR and food manufacturing sectors will likely grow more intense.

Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)

Marketing to the Millennial Consumer

Market researchers like buzz words and they’ve divided consumers into clever groups ever since the Baby Boom generation, following with Generations X & Y (also called the Millennials for those consumers born between 1982-2001).

Analysts claim Millennials are more important for restaurants and food marketers than Boomers or Gen Xers because they make up the largest segment of the quick-service and fast-casual restaurant market. Marketing to them will offer new challenges, since they are the first “digital natives” in history: they have grown up in a world of computers and the Web, in contrast to older consumers who watched the new technologies deploy.

And because of the rise of so many food options, Millennials have a more sophisticated palate and demand higher quality, as well as natural and organic options. While the term “digital native” might seem like hot air, Millennials are the largest users of social media, cell phones and phone texting, resulting in greater social orientation and a “team” mentality. One manifestation of this team orientation is the popularity of lounge areas like those in Starbucks. Wi-Fi is becoming a major selling point for restaurants.

The rise of social media also offers restaurants and food marketers new outlets for their messages, though there is disagreement whether the group will reject overt advertising content on company-owned Facebook and Twitter sites. Most analysts agree the social media interaction with consumers must add value, and those marketers who have used the new channel for interacting with their consumer base are having the greatest success (e.g., restaurants offering specials via Twitter or text message). Millennials also display a “drive thru” mentality that demands fast service, convenient payment options and space for social interaction (Panera Bread, for example, with its ample public areas).

One reason for the rise of the fast-casual segment is the desire of Millennials to have a quality meal on limited budgets, a by-product of the experiences gained from their parents, the Boomers (once the largest restaurant-dining demographic in the country). The environmental and social consciousness of this group has begun to be reflected in college foodservice establishments, where composting, recycling, biodegradable serveware and utensils, and biofuels are now increasingly common (and demanded). Both restaurants and grocery retailers will be feeling the pressure to implement green practices as these consumers enter the workforce in larger numbers.

Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)

Panera Shows Its Brains

This article in Advertising Age shows the way that restaurant companies have to go.

Panera Bread Co. is smart and successful. Their bottom line is up, openings of new restaurants are up, and now they've hired Michael Simon, a smart CPG marketer from Pepperidge Farm (a division of Campbell Soup), to handle their marketing. He's not just the EVP of Marketing, he's the CMO. With a really solid understanding of the retail channel, you can bet Panera will begin looking at alternative delivery mechanisms for gaining a greater "share of stomach" (as opposed to the old-think "market share").

That's because today's consumer doesn't think in segmented channels like we do in business. When you're hungry, you look for meal solutions. Those solutions might be away-from-home, snacking, vending, at work, at home. Some of these choices are dictated by circumstance: vending consumers are often stuck in places where they can't leave (factories, offices, colleges). Breakfast as a daypart is often determined by scheduling ("I have to get the hell out of here fast and don't have time to stop off and eat a good breakfast").

Sadly, most restaurants are looking at the future by scouring the past, offering $$$-off coupons or specials that drain their bottom lines while doing little or nothing to boost consumer loyalty (I'll go to your restaurant for the special, but that doesn't mean I'll come back when I have to pay full-price). You can bet that Panera will be looking at ways to leverage its brand to retail now that Simon is on board. Too bad other chains aren't as forward-thinking.

Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)