Pioneering Pizzas

Pizza is popping up in all kinds of unexpected places and in nontraditional forms.

These days, it seems everyone wants a piece of the pie: Fresh pizza is not only rolling into non-pizzerias coast to coast (think quick-serve sandwich shops and grocery stores), it’s also taking on fresh toppers and sauces as part of a Renaissance in specialty pizza.

“At the end of the day, pizza is a food that everybody understands. It’s part of the American diet. It’s fun. And that’s why there’s interest in inventing and reinventing pizza,” says Scott Cohen, executive chef at two San Antonio, Texas, restaurants, Las Canarias at Omni La Mansion del Rio Hotel and Pesca on the River at the Watermark Hotel.

Quick-serve restaurants like Subway, Dunkin’ Donuts, Cosi, and Panera have launched or are testing pizzas—some are traditional while others are fancy or ethnic. Meanwhile, pizza chains are rolling out new dessert and specialty pizzas and installing high-speed ovens to compete more effectively with drive-thrus. “There are so many outlets selling fresh pizza, it’s becoming omnipresent,” says food expert Joyce Weinberg, president of New York Food Tours and Events.

Several trends have intersected to create this perfect little storm for the beloved pizza pie. For one, it’s an ideal artisan-style food, as well as a perfect host for trendy organic and local foods, from corn to eggplant. And for the health-conscious, as with sandwiches, diners can get protein, veggies, dairy, grains, and carbs all in one. And pizza works for a variety of diners—especially the pickiest of eaters, the kids, which is a big part of some chains’ decision to add it to menus. It’s economical, and it can be easily made with existing equipment and ingredients, in many cases. Pizza can dress up very easily with high-end meats, veggies, fruits, cheeses, and herbed crusts. And it can be topped in ways that work for people on special diets, like vegetarians.

“Americans crave carbs and as you know, we crave convenience above all else,” Weinburg says. “Pizza can be eaten sitting or standing up and even while walking (as every New Yorker knows.) Moms like to serve their families pizza because, unlike most sandwiches, it’s hot, so moms feel like they’re serving their family a relatively healthy square meal if they put a specialty pizza on the table. Most men and kids will eat cooked veggies on a pizza—not so if they’re on a plate by themselves.”

Weinburg—who gives restaurant and pizzeria tours in pizza-loving New York City—first noticed the specialty pizza resurgence about three years ago in The Big Apple, and now it’s full steam ahead. There’s even a Connecticut caterer who only does pizza, driving his Big Green Truck to parties and making pizzas on the spot in a wood-fired oven.

Part of what’s driving the specialty-pizza trend is the resurgence of artisan or handmade foods throughout the U.S., something that, applied to pizza, Weinburg calls pizza rustica, an industry in itself. “People are discovering that the old way of doing things—using premium fresh ingredients, hand tossing dough, using a real wood-fired or coal-fired oven—produces a warm, deliciously scented restaurant and the best pizza product,” she says.

New pizzerias, which are easier to open and require less staffing than fuller-menu restaurants, are cropping up everywhere in a town that’s already pizza-saturated, she says. Such New York restaurants as Pinch on Park Avenue sell pizza by the inch. Others sell by the pound (versus the slice or pie), following in the Italian tradition of pizza by the meter, a practice that delivers more rectangular or square (taglio) than triangular slices.

Others, like L’asso, are making thin-crust pizzas the Old World way, to strict Italian standards. Some of the traditional-style specialty pizzerias rely on simple traditions from Naples, Italy, “wonderful extra-virgin olive oil, using great flour specifically for pizza dough, using Santa Marzano tomato sauce, fresh basil, fresh pesto, and, of course, fresh mozzarella cheese,

preferably real buffalo mozzarella, made from the milk of water buffalos from Italy,” Weinburg says. Sullivan Street Bakery in Manhattan sells traditional Roman-style pizza: handmade dough covered with olive oil and fresh mushrooms, leeks or zucchini—and no cheese.

White pizzas—where pesto, butter, garlic and other sauces replace tomato sauce—are also becoming more prevalent. The use of non-tomato sauces frees up pizza’s taste range immensely. There’s teriyaki with smoked salmon and capers, garlic sauce and shrimp, barbecue sauce and chicken, and on and on.

Most men and kids will eat cooked veggies on a pizza.”

Toppings are becoming more creative, and pizzas are going ethnic and regional. “People want to try to put everything they can consume on a pizza,” Weinburg says. “One of the most important trends is using fresh, locally grown ingredients on pizzas. From local corn and eggplant to locally caught oysters and shrimp, this is what makes a pizza local, makes it belong to a region or town.”

Good bacon is reemerging as a popular topping, and Weinburg’s seeing grilled pizzas (charmarks and all) cropping up, too

Cohen, the Texas chef, makes a popular Pizza La Dier, featured in his upcoming Texas Hill Country Cookbook, that’s emblematic of one aspect of the pizza resurgence. With caramelized onions and Nicoise olives over leftover dough, usually from croissants, it’s rustic, specialized, and high end.

“Pizza’s just one of those things people like experimenting with,” Cohen says. “You can make it with whatever’s left over. Take steak and you’ve got Philly cheese-steak pizza. I’ve put foie gras on pizza, and rhubarb marmalade with a little shaved Mimolette-style cheese and duck confit. I can think of a million different things to make just out of leftovers.”

Cohen recently visited Argentina, and he’s predicting that we’ll soon be seeing pizzas that, for sauce, use that country’s beloved chimichurri sauce (a pesto-like marinade of parsley, garlic, paprika, and oregano) topped with asada (grilled beef), chorizo, or blood sausage.
Quick-serves are rushing into the pizza business because it’s a big, sure-fire market. People of all ages love pizza and most can afford it, even if it’s premium–price, Weinburg says. Plus, pizza doesn’t require fancy techniques or large kitchens.

“It’s obvious why bread and sandwich chains are getting into the specialty pizza biz; they want to use their existing revenue base, i.e. bread, and expand their product offerings to existing customers and attract new customers,” Weinburg says. “Dough is cheap and versatile. Money is made by putting specialty and premium ingredients on the dough.”

The specialty pizza craze really started in the early 1980s and is credited to California Pizza Kitchen, which is now No. 6 among pizza companies, with $25 million in gross sales in 2005. The company’s bestseller—then and now—is barbecued chicken pizza. “They proved that we’ll like anything delicious stuck on top of a freshly baked pizza dough,” Weinburg says. California Pizza Kitchen, however, has an eat-in concept, with takeout comprising only about 15 percent of business and delivery only 3 percent.

“It’s a ripe opportunity for other quick-service chains,” Weinburg says.
Panera launched its Crispani line of pizzas in August 2006, offering seven varieties of fresh-dough pizza cooked in the chains’ stone-deck ovens. The high-end pizzas are made with organic tomato sauce and include such standards as pepperoni and three cheese, along with barbecue chicken, sausage, roasted red and yellow peppers, and crimini and Shiitake mushrooms. The pizzas are large enough to share, and diners can add soup and salad to the side, “which makes for a good dinner meal,” says Andrew Carlson, spokesman for the Richmond Heights, Missouri, company.

Like other sandwich shops that have entered the pizza game, Panera already had ingredients and appropriate ovens on hand, and felt the pizza option went well with its other menu items. “For us, it’s just a natural extension of our lineup,” says Carlson.

New pizza lines are traditional and inventive. Some of them include:

Cosi, a high-end sandwich chain, launched a shareable flatbread pizza in such varieties as Margherita (mozzarella, basil, tomato), spinach and tomato, and four cheese (mozzarella, Asiago, Romano, gorgonzola).

Bear Rock Café, another high-end, fresh-sandwich concept, recently launched its hand-tossed Pizzeta gourmet flatbread pizzas, a $7.99 crispy-crust line that includes barbecue chicken as well as some creative combinations. The roasted vegetable Pizzeta, for instance, is topped with roasted eggplant, three cheeses (mozzarella, provolone, cheddar), roasted red peppers and onions, mushrooms, and tomatoes. The Greek Chicken Pizzeta uses a Kalamata olive spread beneath grilled chicken, roasted red peppers, spinach, three cheeses, and Feta sprinkles.
Einstein Brothers Bagels’ pizza bagel is available in five flavors, including cheesy garlic herb, andouille sausage, and spinach and mushroom, among others

The 70-unit Charlotte, North Carolina–based Salsarita’s Fresh Cantina earlier this year launched made-to-order Mexican pizzas on 10-inch tortilla shells in veggie, barbecue chicken, and white-pizza varieties. More variations are coming in 2008. The $4.99, 10-inch pizzas are cooked in high-speed forced-convection-heating ovens that bakes pizzas in as little as 25 seconds.

Traditional pizza is also, in some cases, becoming faster, a move that companies believe will position them to better compete with drive-thru window offerings, particularly at lunchtime. Little Caesar’s sells an immediately available Hot-N-Ready pepperoni pizza, and Papa John’s last spring rolled out high-speed ovens in a third of its stores, cutting cooking time from six-and-a-half minutes to four-and-a-half minutes. The timesavings allow Papa John’s to promise made-to-order pizzas in less than 10 minutes. Papa John’s also sells specialty pizzas periodically; in the fall, it offered Tuscan pizzas that included six cheeses spiced with Italian herbs on a thin crust or Roma meats like Italian sausage and salami. Coffee and doughnut chain Dunkin’ Donuts has been test-marketing a traditional pizza that’s out in 90 seconds. Subway’s new line of pizzas also joins the fast-feeder trend.

Dough is cheap and versatile. Money is made by putting specialty and premium ingredients on the dough.”

Local pizzerias don’t seem to be hurt by the influx of pizza at other quick-service restaurants. In fact, some are seeing business increase due to national advertising for specialty pizzas, including Papa John’s recurring specials, which are heavily publicized.

“Everyone’s trying to come up with something newer and fancier, and it’s actually good for business,” says Craig Greening, owner of Crusted Creations, a family-owned pizzeria in Traverse City, Michigan. “It’s generated more interest and more repeat sales.” In fact, Greening’s store is located three doors from a Subway shop in a strip mall, and he finds himself selling takeout slices to diners who then join friends for lunch at Subway.

Like pizza sellers everywhere, Gooding’s cooking up specialty varieties regularly. “When people think of pizza they think of pepperoni, but the trend is specialty pizza,” he says. “Everyone’s trying chicken barbecue, ranch, and the pesto pizzas. The higher-end pizzas are getting more popular. Papa John’s was the first to do a Philly steak pizza. Domino’s is doing that Oreo cookie thing. We won’t be doing that one.” Greening’s best-selling specialty pizzas are barbecue chicken and chicken Alfredo. His worst? The chicken Caesar with red onions and grated Parmesan. And the seasonal hit is taco pizza, but in summer only.

Chains that toast subs likely already have the equipment and most ingredients on hand to make pizzas, making it fairly easy to add it to the menu without adding to costs. These pizzas tend to be aimed at different customers, those who want a single serving, another menu option, or people with children who are normally nuts about pizza, but not so much about fancy or healthy sandwiches. Pizzerias, on the other hand, cater more to group dining, family occasions, and delivery.

Subway’s eight-inch pizza, for example, is personal size. It starts with a frozen crust, and then is topped with meatball sub sauce, cheese, veggies, and meats already on hand. The suggested price is $2.99, plus $1 for meat toppings, says spokesman Kevin Kane.

“The whole thing with us is the choice, offering the choice,” Kane says. “We had the ovens there. They have the vegetables in front of them, and the sauce, and it just seemed like, ‘Hey, let’s try pizza.’ It’s about options. If I’m thinking of a sandwich piled with vegetables and I have my kid with me, and they’re not thinking that, well, it’s one more thing that they will eat.”

Cell Advertising Strategies

Quick-serves are putting their ads right into young consumers’ hands by offering coupons through text messages.

With more than 200 million cell phones nestled in pockets across the U.S., it seems natural that marketers would figure out a way to get their messages onto flip screens everywhere.

That strategy has been in practice for at least a year, as marketers try to figure out how to advertise on the cell phones that not only replace landlines, but are becoming more like pint-size computers capable of displaying full-color graphics and connecting to the Internet.

The trend is gaining popularity, and quick-service establishments are part of the reason why.
JupiterResearch reports that from 2002 to 2006, the percentage of young adults and teens that use cell phones for more than calls rose from 50 percent to 90 percent. While mobile coupons are largely untested, that research also suggests that more people, particularly younger people, are open to using their cell phones in new ways.

While traditional coupons printed on paper have been an advertising mainstay for years, the distribution and redemption of them declined in 2006. CMS, a coupon industry marketing company, reported in February that while $331 billion in savings were distributed to 142 million people, distribution was down 12 percent and redemptions were down 13 percent.

Enter a 21st century solution: mobile coupons. Cellfire, a San Jose, California-based company founded in January 2005, offers a cell phone application that serves as a coupon vehicle. Potential quick-serve or fast-casual customers can open the Cellfire application on their phone and search for coupons.

Cellfire, says vice president of marketing Dwight Moore, is the only nationwide cell phone coupon provider. The service is available on all cell phone carriers and most phone models, he says.

Merchants who want to advertise pay Cellfire an initial setup fee that pays for a graphic design and management. The Cellfire application, which can be downloaded or viewed via mobile Web, works like a Web site, Moore says. So customers can see multiple, full-color coupon offers from one restaurant on their phone. A distribution fee applies to coupons, depending on the demographics reached.

The company announced in August that Papa John’s will use the service in 50 of its location in the Dallas-Forth Worth area.

“Partnering with Cellfire is a great way to reach our customers beyond traditional advertising and print couponing methods,” says Jim Ensign, vice president, marketing communications for Papa John’s. “As Dallas is home to many mobile-savvy consumers it was an obvious choice to include in our first mobile coupon promotion.”

One of the main aspects that Cellfire and WHAMtext, a newer cell phone coupon marketing company that was beta testing its service at four colleges in October, stress is that the coupons aren’t sent to phones without the user asking for the message.

WHAMtext offers a call and response type of service, where customers text a search keyword or specific restaurant name to WHAMtext and receive a text message response, explains Jeff Lerner, WHAMtext’s vice president of sales and marketing. Customers include their age and zip code or college code, and WHAMtext responds with which coupons are available in the area and where the restaurants are located.

With both services, customers bring up the coupon on their cell phone screen and present it to the clerk to redeem the coupon.

With cell phone coupons, restaurants can learn a lot more information about who is asking for and redeeming coupons and can follow the coupon process from start to finish, as opposed to only keeping track of how many coupons go out and how many come back.

Cellfire shares demographic information with its merchant clients. Moore says it gives merchants the ability to almost look over a customer’s shoulder.

Lerner says his company’s service is filling a need for restaurant customers who want to have an active conversation with the business. They tell the business what they want and they get a response.

Text coupons are riding a shift in advertising toward a consumer-driven environment, he claims. “Consumers don’t want to be bombarded with ads all the time,” Lerner says. “Companies are getting into the mobile space for a certain demographic and psychographic.”

Text coupons allow a marketer to reach a potential customer mere minutes before they make a purchase because the cell phone is usually in a pocket or purse, with the person wherever he goes. Television and online advertising can’t offer that type of access to a customer, Lerner says.
Although a price scheme has not been established yet, Lerner says WHAMtext is considering a $19.99 a month fee or a pay-per-click model.

Lisa Brooks, director of marketing for Taco Bueno, says her company is testing the Cellfire service because it is a new way to reach customers. While she does not have any official numbers on the 80-store trial, she reports that the initial redemption of Cellfire coupons has been positive.

“Receiving discounts via mobile phones is a growing trend among consumers,” says Scott Terraciano-Spence, vice president of marketing for Taco Bueno. “What makes Cellfire appealing is that it’s simple to navigate and provides our customers with the discounts they want, stored in a place that’s easy to find.”

While traditional methods of reaching customers decline, Moore says that Cellfire aims to tie television and other advertising methods into their service by asking customers, through those ads, to text a keyword to a number. Taco Bueno, for example, has advertisements in its stores telling customers to text “bueno” to a designated number to receive a discount.

Although the future of these coupons is unclear, it is obvious that several companies are willing to bet that they can get cell phone users to look for food deals by using their favorite gadget.


Capico International is presently in the negotiating stages with a company than can offer a better solution to couponing and much more with there program.


Please contact us directly for additional information. info [@] capico.net

Polish Babka Recipe for the Holidays

A Great Polish Babka Recipe

This is Robert Strydel’s (Warsaw correspondent for the Polish News) recipe for an easy yeast-raised Babka. We have tried it, and like the solid, yet airy, bread-like texture and lemony taste. It is a simple "single dough" Babka, unlike the ones made in a bakery, which are made up out of 5 (fruit-filled) rolls of dough, combined in one pan. Let’s get started. From start to finish, this may take up to 3-1/2 hours.

Ingredients

All purpose flour 4 cups
Compressed yeast 1 cake
Granulated white sugar 1 cup
Unsalted butter 3/4 cup
Milk (very hot) 1 cup
Raisins 1/2 cup
Grated lemon peel 2 tablespoons
Eggs (whole) 3
Vanilla extract 1 teaspoon

Ingredients for the icing

Lemon juice 2 tablespoons
Confectioner's sugar 2/3 cup
Water (boiling) 1 tablespoon

Preparations/ Baking

In a large bowl, mash the yeast cake with the sugar (note: the compressed yeast cake can be substituted with a package of active dry yeast; to activate, follow the directions on the package). Beat the 3 eggs and add to the yeast mixture. Heat the milk to very warm and dissolve the butter in it. Add to the mixture and add the flour, grated lemon rind, vanilla extract and the raisins. Mix well to blend all ingredients, but do not knead.Grease a 9-1/2 inch Babka pan, brioche mold, Bundt pan, or other tube pan and fill with the dough to about 1/3 full. Cover with cloth and let stand in warm place for about 2 hours (until the Babka dough has doubled in size).Towards the end of the rising, preheat the oven to 350 degrees Fahrenheit (177 degrees Celsius) place the Babka inside and bake it for about 45 minutes. Note, if you use bakeware that is dark or colored on the outside, set the oven at 325 deg Fahrenheit (162 deg Calsius). It is fully baked when a wooden pick comes out clean.After baking, remove the Babka from the oven and let it cool for a few minutes. Carefully remove from pan and dust it with confectioner’s sugar or glaze with icing.For the icing, combine the confectioner’s sugar, lemon juice, and boiling water in a small bowl and mix together.If you glaze to Babka with the icing, sprinkle it with chopped walnuts, slivered almonds, raisins or finely chopped candied orange rind, before the icing sets.Let it cool completely before serving. Wrap leftovers tightly with plastic wrap for storage at room temperature. For longer storage, you can freeze the Babka, tightly sealed in a plastic bag.
Enjoy your homemade Babka!

Chocolatetown meltdown

HERSHEY, Pa. - As globalization and outsourcing raged outside its corporate walls, the Hershey Co. seemed cozy and secure here in the "Sweetest Place on Earth."

The maker of Kisses and Kit Kats dominated the U.S. chocolate industry and manufactured its goodies in local factories.

Continuing a tradition of social good, the company funneled tens of million of dollars in stock dividends to the nearby Milton Hershey School for needy children, an 11,000-acre institution with a huge endowment built on chocolate. It was, says John Dunn, a local resident and former Hershey employee, a "utopic-type existence."

But reality crashed the party this year. A plunging Hershey stock price wiped out about $1 billion of the school's endowment.

No longer the patient investor, the school's financial overseer, referred to locally as The Trust, used its control of Hershey voting stock to shake up the company's corporate board last month.
Hershey chief executive officer Richard Lenny is out, saying he will resign by year's end. A new management team faces consumers who are buying more truffles and premium chocolates and a flattening market for traditional Hershey bars.

About 1,000 Pennsylvania employees are losing their jobs in a restructuring. A plant in Reading that manufactures 5th Avenue and Zagnut bars will close, the Chocolate Workers union says. Hershey plants in Connecticut and California are shutting down, too.

In the company's most controversial move, Hershey is outsourcing a good portion of its candy production to Mexico - which led to street protests at a Hershey plant in Canada.

For workers like Celso Torres, these are harrowing and sad times.

This fall, the union in Hershey negotiated an early-retirement package. About one-third of the workers at the main Hershey plant, or 600 of them, grabbed at it. Many thought the pension was more secure than the $21-an-hour job in the chocolate plant.

"It's not like we're making old-fashioned chocolate anymore," Torres, a 27-year Hershey employee, said in a tone that was more melancholy than angry on a recent morning as he ambled his stocky frame across a darkened parking lot toward one of the world's largest chocolate factories.

"You come to work every day and you don't know what's going to happen. . . . I got a good deal with my pension, and I thought I better take it."

Behind him, another longtime Hershey worker, a man in a baseball cap, said: "Nobody thinks there's a future. We say if they want to make the candy in Mexico, fine. Sell it down there. Don't bring it back."

Identity crisis

One of Pennsylvania's most recognized companies, Hershey still controls about 40 percent of the nation's mass-market sales for chocolate, according to industry estimates. The company also markets Jolly Rancher hard candies.

Its sales and profits have grown substantially this decade, driven partly by brand extensions, or limited editions, of core products, such as Elvis Reese's peanut-butter and banana-creme cups, pink Kisses and mint Kit Kats.

This strategy, critics say, sowed the seeds for the company's current crisis. As it was marketing these limited editions, Hershey slashed advertising in its big brands. Between 2001 and 2006, the company cut its advertising costs 42 percent, according to corporate documents. The company is now trying to latch onto the latest consumer trend - the boom in haute chocolates like truffles.

Over the last two years, according to market researcher Mintel International Group Ltd., the broad $15.8 billion U.S. chocolate market has been flat. But sales of premium chocolates grew 14.5 percent in 2006 to $2 billion and will grow an additional 13.7 percent this year.

Consumers are "trading up" to premium chocolate, said Joan Steuer, president of Chocolate Marketing, a consulting firm. Premium chocolate costs at least $8 a pound and as much as $100 a pound, according to experts.

Lifestyle plays a big role in the purchase of an item like chocolate. Partly driving the market shift has been recent medical research that suggests antioxidants in natural cocoa can improve the function of arteries, Steuer and others say.

In recent years, Hershey acquired organic- and dark-chocolate companies on the West Coast and launched the Cacao Reserve line of premium chocolates. But some question whether a brand like Hershey can command premium prices.

"They are getting into a smaller and smaller box. It's a mature, bordering on declining, industry," said William Madway, a marketing professor at Villanova University.

Hershey has to modernize how it markets its chocolate, taking into account parent concerns about obesity and high-sugar snacks, Madway said. In that vein, Hershey has developed and marketed Snack Barz and Smart Zone bars as alternatives to traditional candy.

"Hershey lives or dies on the U.S. market. They need to focus on their core brands," said the Bear Stearns Cos. Inc. equity analyst Terry Bivens. He said the company was "going to have to pump up marketing, and research and development. I don't see next year as a recovery year."
Mars Inc., Hershey's archrival and the maker of Snickers bars, "stirred to life" and has challenged Hershey in the U.S. market, Bivens said
.
Brad Reese, whose grandfather invented Reese's peanut butter cup but who does not work for Hershey, comments frequently on the company on a Yahoo.com chat board.

"You have had a whole generation of kids who haven't seen a good Reese's ad campaign," he griped.

Hershey officials declined to comment.

Dunn, a former Hershey director of marketing, summed up the issues facing his former employer.

"We're not a highfalutin Godiva-like company," Dunn said. "We're a blue-collar chocolate company."

Seeking solutions

The Hershey Trust, the shareholder with an 80 percent voting control of Hershey, reportedly held merger discussions with European candy giant Cadbury Schweppes P.L.C. this year. Some believe Cadbury would be a good fit because of its overseas candy-distribution network. The Hershey-Cadbury talks, however, did not appear to pan out.

But the trust remains worried. In October, it said in a statement: "The company is underperforming the market and its own stated expectations."

A month later, it installed eight new Hershey board members. They included former Pennsylvania Gov. Tom Ridge, former Hershey CEO Kenneth L. Wolfe, former Unilever North America CEO Charles Strauss, and Hershey Trust chairman LeRoy S. Zimmerman.
Zimmerman, the state's first elected attorney general, declined to comment for this article, said Hershey Trust spokesman Tim Reeves.

Company founder Milton S. Hershey created the trust to finance his school for needy children. In a statement, the trust, which also owns the Hershey amusement park, said it could use its strong U.S. position to grow both domestically and overseas.

Harvard University law professor Robert Sitkoff said he thought the Hershey Trust should sell the candy company. About half of the trust's $8 billion endowment is invested in Hershey, a "breathtaking lack of diversification" for the institution with a charitable mission, Sitkoff wrote in an article that will be published in 2008 in the Columbia Law Review.

Amendments to the Pennsylvania prudent-investor law in 2002 have made it harder for the Hershey Trust to sell the company, Sitkoff said in the paper. The changes were enacted after the Hershey Trust announced that it would negotiate to sell the candy company to diversify.
Those negotiations were halted after a public outcry and fears that a new corporate owner would close the local chocolate plants and relocate the headquarters.

"You can protect a company from a takeover market, but you can't protect it from the products market," Sitkoff said in a phone interview. "I think the current arrangement is bad for the trust and bad for the company."

At the union hall for Chocolate Workers Local 464 in downtown Hershey, a topic of conversation is which candy lines will relocate to Mexico.

The Hershey chocolate bar and Kisses should stay in Pennsylvania, union officials say. The union negotiated to keep chocolate syrup in the hometown plant, said Dennis Bomberger, the local union's business agent.

Hard candy, the miniature chocolate bars, Mr. Goodbar, Heath, York peppermint patties, the Reese's crunch bar and Zagnut could relocate south of the border, based on the production lines, Bomberger said.

"Of course people are upset that Hershey is moving to Mexico," Bomberger said. "We think it's a mistake going to Mexico. It's still a question: Will the American public buy a Hershey chocolate made in Mexico? This is the gamble they're taking."

Gourmet treats you can order online for the holidays

How often does it pay to be lazy? If you've got foodies on your Christmas list, consider some of these edible gifts ordered online. But, please note that these sites, nor the products, are not your typical Harry & David basket of goodies:

Frog Hollow Farms preserves. The tree-ripened fruit from Al Courchesne's 133 acres of peaches, plums, apricots, nectarines, cherries, pluots and pears is turned into thick, luscious conserves, jellies, marmalades and chutneys. The apricot conserve is made from the Northern California farm's organic Goldensweet apricots. In the cherry conserve are whole pitted sweet cherries. The peach conserve is delicious smeared on a knob of bread, maybe with a little cultured butter, or even without it. Cherry, peach and apricot conserve three-pack, $22 plus shipping at www.froghollow.com

Chocolates from Xuan. These are the perfect chocolates: refined, not too big, not overly sweet, expertly crafted, with clear flavors and great textures -- the delicate coatings snap and the melt-in-your-mouth ganaches are luscious. Pastry chef Xuan Ngo makes chocolates by hand in flavors such as Earl Grey, Madagascar vanilla, ginger, hazelnut praline, passion fruit and kalamansi lime; the "fleur de sel" caramel chocolates are out of this world. Ngo is just getting his business going; orders are available by e-mail through his Web site, www.xuanpatisserie.com. Box of 12 is $22; shipping is free until Christmas with orders of three or more boxes.

Lambda olive oil. For the cook who has everything, consider, if your pockets are deep, this ultra-premium olive oil from Greece. The bottle is gorgeous, and the olive oil, fresh and fruity, pressed from Koroneiki olives grown in the Kritsa region, is brilliant. You might want to have it sent to yourself, though -- there's a two-bottle minimum, and it comes in a wooden box that has to be pried open. (If you didn't know a glass bottle was inside, you might shatter it trying to open the box.) About $100 for two 500-milliliter bottles, plus shipping, from www.speironcompany.com

Madagascar Bourbon vanilla pods. These Euro Vanille brand vanilla pods -- more than half a pound of them -- are harvested by hand; the green pods (the fruit from an orchid) are cured and dried for several months, and what you end up with are beautiful black-brown pods. These are large and plump and moist, heady with the scent of vanilla. There are about 50 in a package, more than enough to get you through the holidays; as for the rest, keep them in an airtight container in the refrigerator or in the freezer until you need them. The cost is $48.25 for 8.8 ounces at www.lepicerie.com

Merry Christmas, Happy Hanukkah and a Very Prosperous New Year

From the staff at Capico International

McD's to pick up part of coffee tab

Company shares costs with franchisees

McDonald’s Corp. will help franchisees pay the $1 billion-plus cost of its bid to compete with Starbucks across the country next year.

The company told franchisees this week that it will pay up to 40% of the costs to remodel restaurants to accommodate the machines needed to make lattes, mocha drinks and other specialty beverages. McDonald’s USA President Don Thompson said last month said the remodeling could cost as much as $75,000 for each of the 13,800 U.S. restaurants.

The price McDonald’s pays per restaurant will vary depending on the amount of remodeling needed, but if the company pays $30,000 a restaurant, the total would exceed $400 million. In addition to the cost of remodeling, franchisees would have to pay about $25,000 per restaurant for the new beverage equipment.

“This contribution demonstrates the company’s conviction in its strategy,” says John Owens, an analyst in Chicago with Morningstar Inc.

McDonald’s officials have estimated specialty coffees could boost annual sales by an additional $125,000 per restaurant, or more than $1.7 billion across the chain. The restaurants now average about $2.2 million in annual sales.

McDonald’s executives say the launch of specialty coffees is the biggest expansion of its menu since the company added breakfast three decades ago. McDonald’s move is a direct attack on struggling Starbucks. McDonald’s has had success with the premium coffee it began offering last year. McDonald’s officials said in the coming years they want to begin offering smoothies and bottled soft drinks as well.

A major hurdle for McDonald’s is persuading franchisees, who would bear most of the cost of the cost of the new beverage plan, that it’s worth it. McDonald’s provided a statement late Thursday from franchisee Don Armstrong, chairman of a franchisee leadership group called the National Leadership Council, who said “McDonalds and the NLC continue to work together every step of the way in developing new beverage offerings for our customers.”

Human Metabolics Creates Chocoholics

Got a hankerin’ for a rich, creamy bite of chocolate? It might be a function of your metabolism, says a new study, “Human Metabolic Phenotypes Link Directly to Specific Dietary Preferences in Healthy Individuals” (Rezzi, et al, Journal of Proteome Research, ASAP Article 10.1021/pr070431h S1535-3893(07)00431-9).

The study, by Swiss and British scientists, has connected the preference for chocolate to a specific, chemical signature that might be programmed into the metabolic system and is detectable by laboratory tests. This discovery adds credence to a rapidly emerging discipline that could classify individuals based on their metabolic type, or metabotype. Metabolic status and food preferences can vary from person to person and even between different cultures. Proteome research, which focuses on characterizing the structure and function of the complete set of proteins produced by our genes, has allowed scientists to identify metabolic changes that occur when foods are digested. This could lead to methods to design healthier diets based on each individual’s needs.

Researchers studied 11 male volunteers who classified themselves as “chocolate desiring” and 11 volunteers who considered themselves “chocolate indifferent” in a controlled clinical study. Each subject ate chocolate or placebo over five days and had their blood and urine samples analyzed via using 1H NMR spectroscopy. The chocolate lovers exhibited a hallmark metabolic profile that involved low levels of low-density lipoprotein (LDL, “bad”) cholesterol and slightly elevated levels of albumin, a beneficial protein, whether or not they ate the chocolate samples. The researchers also found the behaviors and/or interactions of the gut microbes in the chocolate lovers were different from the other subjects, leading to a difference in the microbes’ functionality.

“Our study shows that food preferences, including chocolate, might be programmed or imprinted into our metabolic system in such a way that the body becomes attuned to a particular diet,” says Kochhar, study researcher and scientist with Nestlé Research Center in Switzerland. “We know that some people can eat a diet that is high in steak and carbs and generally remain healthy, while the same food in others is unhealthy. Knowing one’s metabolic profile could open the door to dietary or nutritional interventions that are customized to your type, so that your metabolism can be nudged to a healthier status.”

This approach can be applied to any population or diet, not just chocolate, and might lead to tests for determining a person’s metabolic type that could be performed as part of a blood or urine test during a regular visit to the doctor, Kochhar predicts. But, he notes, a reliable test of this type may be five years away, as more research is needed in this area.

NEW CONCEPT: MEALS AND DEALS

Targeting the wandering workforce.

A laptop, cell phone and a grande latte are all you need to set up a mobile office at any Starbucks. When it’s time for lunch, McDonald’s and Panera Bread offer burgers and paninis along with wi-fi hot spots. But most professionals in search of a quieter, more business-like setting—perhaps with meeting space and classier food—have to settle for hotels or pricey executive centers.

Enter the Corporate Café. “It’s a niche no one else was filling,” says Brian Boeger, founder of the Olathe, Kansas-based concept, “kind of a merge between Starbucks and Applebee’s, complete with full business services.”

Corporate Café’s business theme includes TVs displaying streaming stock quotes and business news programming. Patrons can hook up laptops to plasma screens at every booth and view polished Powerpoint presentations while they enjoy NYSE Biscuits and Gravy or AmEx Steak. A private room offers space for large meetings and an on-site business center features free computer stations, copying, printing, faxing, mail and even notarizing services so contracts can be signed and sealed on the spot. While there’s a full bar on the premises, customers also come for the “executive blend” coffee roasted by a local company and a chef-driven menu at breakfast, lunch and dinner.

These perks are music to the ears of the work-from-home crowd, which numbered 20.7 million at last count, according to 2004 figures from the Bureau of Labor Statistics. Add to that the throngs of road warriors who carry their offices with them, and you have a solid customer base.

Boeger says that groups are now booking meetings five days a week months in advance and a second Corporate Café is under construction in Kansas City, Missouri. It will feature more private meeting rooms.

What’s next? “I hope to develop six to nine more locations in the near future and eventually reach 20 to 25 operational restaurants in the next three to five years,” says Boeger. With a flexible prototype that can vary from 1,000 to 9,000 square feet, he can target locations as diverse as airports, urban business districts and suburban lots. That means more choices for hungry workers to meet and eat—wherever their travels take them.

HHS Unveils Plan to Strengthen, Update Food Safety Efforts

HHS Secretary Mike Leavitt has announced a comprehensive initiative by FDA designed to bolster efforts to better protect the nation’s food supply. The Food Protection Plan proposes the use of science and a risk-based approach to ensure the safety of domestic and imported foods eaten by American consumers.

“America’s food supply is among the safest in the world, and we enjoy unprecedented choice and convenience in filling the cupboard. Yet, we face new challenges to meet both the changing demands of a global economy and consumers’ expectations,” Secretary Leavitt said. “This Food Protection Plan will implement a strategy of prevention, intervention and response to build safety into every step of the food supply chain.”

HHS Deputy Secretary Tevi Troy and FDA Commissioner Dr. Andrew von Eschenbach, presented the Food Protection Plan at a press conference in Washington, D.C.
“FDA must keep pace with this transformation so that the safety of the nation’s food supply remains second to none,” said von Eschenbach. “The Food Protection Plan calls for effective action before an outbreak occurs.”

The Food Protection Plan, which focuses on both domestic and imported food, complements the Import Safety Action Plan delivered by Secretary Leavitt to the President earlier today that recommends how the U.S. can improve the safety of all imported products. This year, $2 trillion worth of goods will be imported into the U.S., and experts predict that amount will triple by 2015. The Import Safety Action Plan lays out a road map with short- and long-term recommendations to enhance product safety at every step of the import life cycle. Taken together, the two plans will improve efforts by the public and private sector to enhance the safety of a wide array of products used by American consumers.

Advances in food production technology, rapid methods of food distribution, and globalization have transformed supermarket shelves and restaurant menus, broadened the tastes of consumers, and challenged the existing food protection framework.

“Although our agency clearly needs to maintain and enhance its response capacity, the primary goal is to prevent contaminated food from ever reaching the consumer,” said von Eschenbach.
The plan is premised on preventing harm before it can occur, intervening at key points in the food production system, and responding immediately when problems are identified. Within these three overarching areas of protection, the plan contains a number of action steps as well as a set of legislative proposals. Taken together, these efforts will provide a food protection framework that ensures that the U.S. food supply remains safe.

To strengthen its efforts to prevent contamination, FDA plans to strengthen support of food industry efforts to build safety into products manufactured either domestically or imported. The FDA will work with industry, state, local, and foreign governments to identify vulnerabilities and will look to industry to mitigate those vulnerabilities, using effective methods such as preventive controls.

The plan’s intervention element emphasizes focusing inspections and sampling based on risk at the manufacturer and processor level, for both domestic and imported products, that will help verify the preventive controls. This approach is complemented by targeted, risk-based inspections at the points where foreign food products enter the United States, including ports.
The plan calls for enhancing FDA’s information systems related to both domestic and imported foods to better respond to food safety threats and communicate during an emergency.

The Food Protection Plan’s three core elements—prevention, intervention and response—incorporate four cross-cutting principles for comprehensive food protection along the entire production chain:

• Focus on risks over a product’s life cycle from production to consumption;
• Target resources to achieve greatest risk reduction;
• Use interventions that address both food safety (unintentional contamination) and food defense (deliberate contamination);
• Use science and employ modern technology, including enhanced information technology systems.

Times Change, Breakfast Doesn’t

According to a recent press release from The NPD Group, Port Washington, NY, the top-10 foods given to children under the age of six by new parents are almost identical to those given 20 years ago. This information comes from NPD’s 22nd annual “Eating Patterns in America” report.

The top-3 foods from both March 1985 through Feb. 1987 and March 2005 through Feb. 2007 are:

1. Cold cereal;
2. Glass of milk;
3. Fruit juice.

Although some rankings have shifted over the last 20 years, other items common to both eras include toast, eggs, fruit, pancakes, hot cereal and bacon. One item new to the 2005 to 2007 rankings is waffles, coming in at No. 7 (offered 36% of the time today, according to the report, up from 17% in 1985 to 1987).

In the press release, Harry Balzer, vice president, The NPD Group, and author of the “Eating Patterns in America” report, notes: “New moms today are asking the same question their moms asked when deciding what to feed the kids, ‘What is the easiest way to get this job done?’ Oftentimes, it’s the way their mom did it.

“Based on what we’ve seen over the past 20 years,” Balzer contines, “it is pretty clear what kids will be eating for breakfast in the year 2027.”

Food inspectors overwhelmed by workload

As alarm bells sounded for the second-largest hamburger recall in history, the nation's top food safety officials were in Miami setting the "course for the next 100 years of food safety."

The fact that so many U.S. Department of Agriculture executives were in Florida studying the future when New Jersey-based Topps Meat Co. was scrambling, very much in the present, to recall 21.7 million pounds of hamburger patties -- a full year's production run--has rankled some USDA inspectors and food safety advocates, who see it as a symbol of the department's attitude toward food safety enforcement.

Several USDA inspectors said in interviews that their workloads are doubling or tripling as they take on the duties of inspectors who have left the department, not to be replaced. The force has been reduced dramatically in recent years as vacancies are left unfilled.

"We've been short the whole time I've been in," said one veteran inspector who asked not to be named. "We don't have enough inspectors, but we have too much management. The inspectors are short all the time and getting spread thinner and thinner."

The crisis began last month, when three consumers in New York and Florida fell ill from E. coli poisoning. Soon at least 32 people were sick. The Topps recall, though, began a full 18 days after the USDA's Food Safety and Inspection Service (FSIS) first confirmed E. coli bacteria in a Topps hamburger.

The undersecretary of agriculture for food safety, Richard Raymond, later said, "We can do better."

FSIS--which regulates meat, poultry and egg production -- says it had 7,200 inspectors in 1992 and 7,450 today. But Stan Painter, an inspector and a union representative for the American Federation of Government Employees, which represents the inspectors, said the actual number is closer to 6,500.

The difference, he said, are unfilled vacancies that FSIS permanently carries. "There are about 1,000 vacancies," Painter said. "It's steadily gotten worse."

FSIS did not respond to written questions submitted by this article. In an Oct. 4 teleconference with reporters, Raymond said, "We are looking into the FSIS inspection activities in this plant in order to ensure that our inspection workforce has the tools, the training, the data and the oversight to ensure public health protection."

Under the federal Meat Inspection Act, USDA inspectors are required to examine animals that are "prepared at any slaughtering, meat-canning, salting, packing, rendering, or similar establishment," and intended for use as food. Inspectors put a USDA stamp on products that pass inspection, and reject items that don't pass.

USDA inspectors visit about 6,000 food production facilities, but some are so large that they require several inspectors. From April to June of this year, inspectors examined 34 million "livestock carcasses" and condemned 54,546 of them, according to FSIS records. For poultry the numbers jump to an astounding 2.3 billion carcasses inspected and 11 million condemned animals.

Inspectors: Goals not met

The legal requirements for inspections, combined with a reduced force, mean that the inspection goals have not been met for years, according to inspectors.

They say the workload is unrealistic, reducing their duties to cursory checks of company records, not the physical examination of meat, poultry and eggs.

"Inspectors are not ... in the vast majority of processing plants full time," said Felicia Nestor, a senior policy analyst for Food & Water Watch, a Washington-based food safety group. "For the most part, inspectors at processing plants are on patrols, meaning they cover a number of plants." Thus, she said, the patrols are counted as an inspection because of the possibility that inspectors could show up.

Questions about the size of the inspection force have come amid a sharp increase in E. coli-related ground beef recalls over previous years, a phenomenon that has baffled USDA officials. In the wake of the Topps case, they are devising a food safety checklist that each of the nation's estimated 1,500 meatpacking plants must complete.

Industry representatives point out that incidents of E. coli had declined for several years before increasing this year. E. coli has actually "declined something in the order of 72 percent over the last five years," said Jim Hodges, president of the American Meat Institute Foundation. "It's still at a very low rate, statistically."

Hodges said the meat industry has adopted safety measures, such as steam and vinegar washes, to rid carcasses of E. coli.

Topps had 1 inspector

At Topps, a single USDA inspector was assigned to the Elizabeth, N.J., plant, which produced more ground beef patties than any other U.S. meat processor.

But that inspector in recent years has also been given responsibility for five meat processing plants, according to Nestor. That means spending one hour and 36 minutes each day in each plant, she said.

"This is a problem we've been pointing out to them forever," Nestor said. "There are vacancies and shortages all over the country. In a lot of places, the patrol assignments are doubled and tripled up."

For FSIS, the problem isn't a new one. Following the E. coli contamination and recall of 19 million pounds of ground beef made by ConAgra in 2002, the Department of Agriculture's inspector general conducted an investigation at the request of Congress.

The resulting September 2003 report concluded that it was "FSIS policies that effectively limited the documents the inspectors could review and the enforcement actions they were allowed to take." The agency, the inspector general found, "needs to be more proactive in its oversight."

It was a tragic case of E. coli contamination in 1993 that led to reforms that inspectors today say their agency is reluctant to enforce. The regulatory changes occurred after E. coli poisoning in Jack in the Box restaurant hamburgers killed four children and sickened many others.
Escherichia coli, a bacterium that lives in some cattle's intestines, can find its way into meat during the slaughter process, usually when fecal material comes in contact with a meat carcass. In humans, poisoning of this strain of E. coli can cause bloody diarrhea and urine, severe stomach cramps, and kidney damage and failure that can lead to death.

After the Jack in the Box case, the USDA required each meat plant to adopt a Hazard Analysis and Critical Control Point plan. The plans allowed companies to design their own food safety measures, usually around the need to process beef quickly.

The hope was that meatpacking plants would adopt better practices. But inspectors today say their jobs have been reduced to monitoring a company's hazard analysis plan, instead of enforcing USDA's own inspection regulations.

"They [meatpacking companies] write their own plan," said one inspector, who asked to remain anonymous. "They write everything for themselves. We're 'monitoring' that now.
"It's just a joke. We mostly check paper now. You can put anything you want on paper."

McD thirsts for $1B in new beverage sales

QSR leader reportedly poised to take on coffeehouses with chainwide espresso rollout

Eyeing $1 billion in incremental sales that would be siphoned largely from the Starbucks-dominated coffee-house sector, McDonald’s is poised to pursue a massive espresso beverage rollout requiring chainwide remodelings and equipment upgrades, according to a published report quoting internal planning documents.

However, until meetings scheduled for later this month, McDonald’s Corp. isn’t expected to clarify its role in helping finance what could be $100,000 in typical per-location overhaul costs for the mostly franchised chain of nearly 14,000 U.S. units, the report in Crain’s Chicago Business stated.

The nearly $1.3 billion price tag, for a rollout that McDonald’s reportedly wants to complete by late 2008, apparently would pay for more than automated espresso machines. The plan to tap what McDonald’s estimates is a $60 billion market in beverages also entails drive-thru modifications and installations of smoothie machines and wall-mounted refrigerators to sell bottled beverages and energy drinks, the planning memos are said to indicate.

The chain already has taken aim at Starbucks Coffee and other espresso specialists by test marketing such drinks as hazelnut caramel lattes and cappuccinos at hundreds of McDonald’s units in at least six states. Those tests were launched after the chain scored a 15-percent surge in coffee sales following an upgrade of its standard brew to a darker, richer beverage.

The Crain’s report said leaked McDonald’s memos envision sales of specialty beverages growing by 90 percent in the next five years to an average of $125,000 annually per location, yielding per-store profit ranging from $15,000 to $60,000.

Some 1,500 McDonald’s outlets reportedly would get the espresso makeovers by the end of 2007.

However, a McDonald’s spokeswoman denied that the company had decided to broaden its current beverage testing, which also includes bottled drinks being sold at some locations. Though the company has said it is eyeing a possible launch of smoothies, it would not comment on the leaked memos’ purported reference to energy drinks—presumably like those sold at Jamba Juice and other smoothie chains.

“We’re testing a variety of beverage options, including specialty coffee,” spokeswoman Danya Proud said. “It is far too early, however, to speculate about test results or specific product offerings. No final decisions have been made.”

Nonetheless, analysts say McDonald’s could easily take market share away from the burgeoning coffeehouse sector, especially by targeting consumers who are seeking lower-priced beverage alternatives.

“McDonald’s will steal value customers away from Starbucks,” said Darren Tristano, a vice president of Chicago-based restaurant consulting firm Technomic Inc. “In the past, Starbucks hadn’t perceived QSR to be competition. They may have to now.”

There is a proven market for specialty coffee in QSR,” said Dennis Lombardi, a foodservice consultant with WD Partners in Columbus, Ohio. “Dunkin’ Donuts has proved that, and McDonald’s will make that happen.”

Dunkin’ Donuts has sold lattes and other espresso-based drinks since 2004.

Each item from McDonald’s espresso menu would be “another snack for the growing snack day-part, and it will build morning sales,” Lombardi observed.

“It also will complement the Wi-Fi stoppers who may not be hungry enough to get a sandwich,” Lombardi said, referring to laptop-toting users of wireless-Internet services who frequent the thousands of McDonald’s that offer Web access.

Coffee has grown to 11.4 percent of all snack occasions so far this year, from 10.9 percent in 2006, said Harry Balzer, vice president of the consumer research firm the NPD Group of Port Washington, N.Y. He credited increased convenience and novelty for the surge.

The number of consumers who buy a coffee drink during a quick-service visit has jumped to 6.6 percent so far this year, from 3.5 percent for 2006, according to the latest Quick-Track consumer survey from Sandelman & Associates of San Clemente, Calif. In the third quarter of 2007 ended Sept. 30, that percentage was 8.9 percent, the Sandelman group said.

McDonald’s tests of espressos, cappuccinos, lattes, mochas, hot chocolate, iced coffees and sweet tea have spread to include the markets of Grand Rapids, Mich.; California’s Central Coast; Kansas City, Mo.; and parts of Georgia, North Carolina and Texas.

McDonald’s franchisee John Jelinek of Kansas City said sales have surged “like gangbusters” since two of his three restaurants began selling the specialty coffee items a few months ago. Most of the additional sales are in the morning, he said.

Jelinek expects to add an extra employee in each restaurant, primarily to handle the coffee service. Making the new beverages “does take more time,” he said.

However, a manager for a five-unit McDonald’s franchisee in the Grand Rapids, Mich., area that has been testing specialty coffees for the past year said most of the preparation process is automated, except for stirring in optional syrup toward the end. Now that crew members are used to the procedure, it has become second nature, she said.

Prices for the hot or iced lattes, cappuccinos, and mochas range from about $2 to $3, depending on size. Customers can choose whole, nonfat or 2-percent milk, and can opt for vanilla, chocolate, caramel and other syrup flavors.

Jelinek said he is not testing bottled soft drinks, as are some other franchisees, and he does not know of anyone in the chain currently testing smoothies. So far, he said, McDonald’s has not charged him anything for the new coffee equipment.

Whatever the cost, “there will be a payback later,” the 25-year franchisee said. “Nobody knows what it will be. McDonald’s has always been very reasonable.”

Crain’s said notes from an August meeting of McDonald’s operators indicated that one franchisee who had installed new beverage gear had pegged the cost of revamping an individual location at $100,000. Crain’s also noted that some franchisees had been angered when the chain’s last major equipment overhaul, the Made For You kitchen upgrades begun in the late 1990s, exceeded the estimated $25,000 per-location cost, of which McDonald’s had agreed to pay half.

U.S. Consumers Feel the Pinch as Wheat Prices Soar

Anthony Ippolito visits the Breadsmith bakery on Chicago's Near-North Side once or twice a week for coffee and a pastry, a rare indulgence in his otherwise healthy diet.

"I don't buy these things that much, so it's sort of a treat when I do," said Ippolito, a biology professor at nearby DePaul University.

But like many consumers paying close attention to food prices that have been creeping higher, Ippolito said he might deny himself the pastries if he has to pay much more for them.

Wheat prices are at record highs, with futures at the Chicago Board of Trade surging amid tight global supplies and strong demand from importing nations.

U.S. food companies, already struggling with higher energy, transportation, packaging and labor costs, have adjusted some of their prices or reduced package sizes to cope with the rising input costs, industry analysts said.

Sara Lee Corp, which raised prices by 5 percent in its U.S. bakery business this month, has said it may need to raise bread prices again if wheat remains near historic highs.

Many bakeries, including Breadsmith, have not yet fully passed on the rising cost of ingredients such as wheat flour, milk, and cooking oil to customers, possibly fearing sales would slow.

But as higher costs keep squeezing bakery margins, price increases across the board may be inevitable.Jill Rodriguez, a personal trainer having coffee with Ippolito on Thursday morning, agreed she also would curb her spending if prices became unreasonable.

"It's kind of like with gas prices, we don't drive as much now that gas prices are higher," she said.

Food industry analysts expect sales of staple bakery items such as bread to remain consistent even if prices rise, but purchases of nonessential goods such as cakes, pies, and pastries peobably would slow.

"It really depends on the consumer. The wealthy are not going to blink. They'll maybe complain about it, but in the end they'll pay," said Len Steiner, principal at Steiner Consulting Group, food industry consultants.

"Lower-income people will buy the staples and give up on some of the fringe items. They'll buy the bread but they won't have the pie," he said.

Any slowdown in consumer food purchases could be short lived.

"In the short term, consumers can fight it and they can walk away from the bread counter for a while," Steiner said.

"But eating habits are tough to turn around so in the longer run they're going to come back and pay what they have to to get the product," he said.

A fruitful market

Smoothie operators find abundant opportunities as consumers slurp up blended beverages

“I see smoothies where the specialty coffee industry was just 10 years ago,” says Sheri Miksa, the former chief operating officer of Seattle’s Best Coffee. Miksa now heads up the 118-unit Robeks’ chain, which serves made-to-order smoothies in 15 states and the District of Columbia.

Citing a recent report by Mintel International Group Ltd., a London-based consumer and market research firm, Miksa says Americans are buying about $2 billion worth of puréed fruit drinks a year and are expected to buy 10 percent more than that next year.

“We are at an exciting time,” she says of the burgeoning smoothie world.

“Every half-dozen years or so, chain restaurants respond to demands from public health advocates and others to add more healthful items to their menus. Traditionally those items sell badly and are soon dropped, but this time groups ranging from aging baby boomers to working mothers to high school and college students are sipping and slurping their way through satisfying drinks that are targeted as being good for them. If they can buy those options quickly and drink them with one hand while driving a car, all the better.

But, of course, some smoothie buyers just want a tasty pick-me-up, and rich, indulgent frozen beverages are selling well, too, such as Godiva Chocolatier’s “Chocolixir” line, which was just expanded with dark chocolate raspberry and white chocolate raspberry flavors.

“It’s for someone who really wants to enjoy that chocolate decadence,” says Erica Lapidus, Godiva’s head of public relations and promotion, noting that the $4.75 drinks have succeeded at bringing in younger and more frequent customers

On the lighter side, Robeks recently launched a line of “naturallylight” smoothies with one third fewer calories, on average, and no artificial sweeteners. The new smoothies eliminate the frozen yogurt and sherbet in Robeks’ other beverages, replacing them with more fruit and fruit juice along with a fiber and protein additive.

“They are really in response to what our guests are asking for,” Miksa says, pointing to a desire both for fewer calories—and fewer carbohydrates and sugar—but also for food that does not have sugar substitutes and seems natural.

Even when customers want sugar and sugar substitutes in their smoothies, the more natural they seem the better: Barbara Valentino, director of marketing and communications for Tropical Smoothie Café, a 10-year-old chain based in Destin, Fla., with 245 units in 31 states, says the chain’s smoothies contain either turbinado sugar or, in the case of their “Splendid Smoothies,” a sugar substitute that’s marketed as “natural.”

The convenience of smoothies isn’t lost on patrons of higher end restaurants, either.
“People who want to eat their breakfast on the go… They order it at the bar on the way out instead of grabbing, like, a yogurt,” says Kristine Subido, chef of Wave at the W Chicago Lakeshore hotel, noting that they sell them in clear plastic cups there.

Her most popular smoothie is the “Peacharific,” made with peaches, banana, vanilla yogurt and orange juice, which is $6 for eight ounces.

Although most of her smoothies are bought during breakfast, they sell reasonably well all the way until noon, and then kids like to get them for afternoon pick-me-ups.
“I know a lot of parents order them for their children,” she adds.

Efrem Cutler, corporate executive chef and vice president of food production for UFood—a Massachusetts-based chain formerly known as KnowFat Lifestyle Grill—also sees kids ordering his fruit-based “Smuuthies” as afternoon snacks, often with the chain’s air-fries, while active college students and others will drink protein-enriched “Prolatta” drinks before or after working out. The Prolattas are “a little bit fluffier” in texture, owing to the added protein that’s beaten into them, he says.

Jim Baskett, vice president of business development for Emerald City Smoothie, a 48-unit chain based in Seattle, says he also sees a demand for functional foods from his customers and has noticed police officers, firefighters and emergency medical technicians using his protein-enriched smoothies as meal replacements.

James Boyce of Studio in Laguna Beach, Calif., has jumped on the antioxidant trend with his gojiberry-açaí smoothie. Both goji and açaí are fruits that are praised for their high antioxidant content.

“Açaí is sort of gritty,” Boyce says, noting that the purée he buys is about 95 percent pit and 5 percent flesh. “So I thought we’d smooth it out by adding the chewy gojis.”

He describes the flavor of açaí as being similar to boysenberry. Gojis are tart, he says, “almost between a cranberry and a raspberry.” He purées them with a banana, apple juice, soy milk and ice.

Boyce also makes seasonal smoothies, so now he is making one of peach and other stone fruit. “Sometimes we’ll throw a cherry in there,” he says.

Starbucks also jumped on the antioxidant bandwagon with the recent release of its Blueberries & Crème Frappuccino.

For David Guas, executive pastry chef of Acadiana, Ceiba, DC Coast and TenPenh restaurants in Washington, D.C., the idea of smoothies didn’t come from health or indulgence, or even convenience, but as a way to deliver an intense berry flavor without much fuss.

He makes blueberry shooters by mixing blueberries with limoncello, light corn syrup and salt, macerating them at room temperature for an hour and then refrigerating the mixture. To serve he pours it all into a blender, adds ice cream and blends it until smooth, then puts it in a 1.5- to 2-ounce shot glass and serves it on the side of fruit desserts.

“Customers think it’s fun and cute,” he says, noting that he will add a shot of bourbon to peach smoothies for a more adult drink.

Sometime he will add egg white powder and froth it a bit to make it reminiscent of an Orange Julius.

“There’s something about a blended drink, for whatever reason, whether it’s a daiquiri, a shake, or a smoothie, that touches the child in people,” he says. “There’s some kind of recognition and comfort level with it.”

But some studies have indicated that when people drink liquids, they don’t feel as full as when they eat solid food. That, some scientists have suggested, could lead to overeating.

Jamba Juice is launching a “chunky smoothie” to address two issues, says Paul Coletta, senior vice president of marketing and brand development: the fact that more smoothies are being used as meal replacements, and the trend in smoothies toward more texture and, as a result, satiety.

“We started playing in the lab with bringing [textured] ingredients into the smoothie,” he says.
So drinks with fruit and granola pulsed into it are being tested in Jamba’s home market, the San Francisco Bay area, and plans are under way to roll it out systemwide to its 577 units in 2008.

“We are looking at it to be a significant driver of our comp store sales,” he adds, noting that the new line of smoothies will be available all day but are being positioned as breakfast items.
Coletta adds that Jamba Juice already does 18 percent of its business at breakfast, compared with 11 percent on average in the quick-service segment.

The chain also launched this month a smoothie category called Jamba “Functionals,” which focuses on specific health issues that its customers are looking to address. Coletta said the company’s research found that its customers’ top demand in food was taste—but functionality was No. 2.

So the new line includes a Nike Protein Berry Workout Smoothie, developed with Jamba Juice’s shoe-producing marketing allies, with 19 grams of protein in a 24-ounce serving.

The Heart Defender includes a “Happy Heart Boost,” one of many supplements available at this and other smoothie chains. This particular “boost” is made with a heart-healthy plant sterol.
The other three new items are the Açaí “Super-Antioxidant,” the Cold Buster and, for people looking to lose weight, the Fit and Fruitful.

Jamba Juice is also adding a new “boost” to its offerings—the Green Caffeine, which is derived from green tea and engineered to be high in antioxidants and caffeine, but nearly neutral in color and flavor.

Smoothies also can fit into a nonsmoothie restaurant’s brand positioning, such as at Pico’s Mex-Mex in Houston, where avocado, yogurt, agave syrup, ground almonds, vanilla and nutmeg are blended into a smoothie. “The yogurt gives it a very nice texture, and so do the almonds,” says restaurant owner Arnaldo Richards.

But he admits that more people order daiquiris.

The Nutrition-Conscious Are Taking a Bite Out of Fast Food

So, maybe you'll have a side order of fruit instead of fries with that cheeseburger.

After a decades-long fast-food binge, the notion of watching what you eat seems to be hitting more Americans -- but certainly not all -- as they approach the counter of their favorite "quick-service" outlet, experts say.

Changing tastes -- along with some regulatory prodding -- means the nation's fast-food industry is also getting the message. Citywide bans on tasty but heart-clogging trans-fat cooking oils, legal moves to mandate calorie counts on menus, and even an effort to outlaw new fast-food franchises in obesity-plagued south Los Angeles have grabbed headlines this year.

One industry representative believes fast-food businesses are responding to consumers' changing tastes and health concerns -- and the obesity epidemic.

"I think that quick-service restaurants have done a great job of offering and highlighting [healthier] items," said Sheila Weiss, a registered dietitian and director of nutrition policy at the National Restaurant Association, which describes itself as the leading business association for the restaurant industry. "A lot of their campaigns recently have focused on the elimination of trans fat oils, on offering more entree salads and better options for side dishes like fruits and low-fat skim milk."

Last week, Burger King pledged to offer kids healthier food options, such as apples cut to resemble French fries and a kids meal with low-fat, flame-broiled chicken tenders, unsweetened applesauce and low-fat milk. McDonald's already offers children apple slices in a low-fat caramel dip, while adults can snack on the chain's Paul Newman salads or fruit parfaits. Wendy's is offering up salads, or yogurt laden with granola and mandarin oranges.

One independent nutritionist agreed that, 67 years after the first McDonald's opened in San Bernardino, Calif., fast-food menus may be finally changing for the better.

It's been tried before, but this time the changes might stick, said David Grotto, a Chicago dietitian and national spokesman for the American Dietetic Association.

"We have seen healthier offerings now because there is a market for it," Grotto said. "If we think back to McDonald's, when they first offered the McLean burger [in 1991], that was a disaster. But there wasn't a market for it then -- people were not going to burger joints to get healthy, they just wanted a good burger."

Times and trends have changed, Grotto said. "What is happening now is that you are starting to see Paul Newman salads, apple dippers, etcetera, and they are selling because there is a market for it," he said.

That doesn't mean fast-food menus are necessarily causing Americans to eat better, however.
"The healthier options that are offered at quick-serve restaurants are for a very specific demographic," Grotto contended. "They walk into the restaurant already knowing that they are going to make a healthier choice. On the other hand, if you go into a burger joint and you have your mind set on a burger, you are not going to get the Paul Newman salad."

For similar reasons, Grotto is dubious that proposals to mandate calorie counts on fast-food menus will get people eating healthier diets. One such law proposed for New York City was shot down by a judge last week.

"I firmly believe that the consumer who goes in and wants the burger already knows that it may not be the healthiest thing in the world," Grotto said. "So beating him over the head about [calories] isn't necessarily going to change things."

Weiss agreed, adding that information on the calorie content of fast foods is already offered to consumers in other ways, such as brochures, tray liners and Web sites. And she wonders whether the average consumer can easily interpret calorie counts, anyway.

"When the International Food Information Council asked people how many calories they needed per day to maintain their weight, only 12 percent of respondents were able to give the correct answer," Weiss said. "That shows that people do not understand the context of calories in their diet and lifestyle."

According to Weiss, what consumers really want is choice.

"This is not a charity, it is a business," she said. "Restaurants are providing foods that their customers want and are going to eat." For some of today's customers, that now means healthier foods, Weiss said, and "if people didn't want them and they weren't selling, they wouldn't stay on the menu."

Weiss said her association supports recent moves in New York City, Seattle and elsewhere to limit trans fat cooking oils in restaurant fare. But she worries that deadlines for the changeover are being set too tightly to allow businesses to find reliable substitutes in time.

Grotto, author of the forthcoming book 101 Foods That Can Change Your Life, cautioned that McDonald's, Wendy's and other fast-food retailers haven't turned into health food havens quite yet.

"The bread-and-butter of the quick-service industry is not healthy foods," he said. "It's still very much driven by what the consumer wants," and for most consumers, that's high-calorie, fatty fare, he said.

So, what efforts can work to change people's dining preferences for the better?
"I'm old school on this," Grotto said. "I think that starts in the home." When parents model good nutrition and exercise, healthier kids will follow, he said, and those children typically grow into health-conscious adults.

"If we are ever to tackle this huge problem of obesity, it's not about any one smoking gun," Grotto said. "Everybody has got to play a role in turning this around."

McDonald's challenging Starbucks with cheaper coffee drinks

When Charles Ruppert has a yen for a white-chocolate latte, he doesn't head to a Starbucks shop. He goes to a McCafe located in a McDonald's restaurant and pays 26 percent less.

"McDonald's got a real winner," said Ruppert, 55, a car-repair shop owner in Greensboro, N.C. Analysts think so, too: McDonald's shares will rise 18 percent in the coming year, UBS Securities estimates.

McDonald's, the world's biggest restaurant chain, has added the frothy drinks at two-thirds of its 13,794 U.S. stores since introducing a stronger brew in 2006.

Shares of Starbucks are down 24 percent in 2007, on track for their worst annual performance amid the slowest sales growth in more than five years at stores open at least 13 months.

McDonald's is "being extremely aggressive," said Peter Kwiatkowski, who helps manage $21.9 billion, including 1.3 million McDonald's shares, at Fifth Third Asset Management in Cincinnati.

"They're a lot cheaper than Starbucks coffee in general, and they have the high quality to go with it."

Ruppert paid $3.31 for a 20- ounce cup of latte at the McDonald's in Oak Ridge, N.C., compared with the $4.48 cost for the same size at Starbucks

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McDonald's coffee is drawing new customers and spurring food sales, especially at breakfast, President Ralph Alvarez said.

"Coffee, by itself, is a very high-margin business," said Alvarez, 52. "But it doesn't compare to what we get selling a full meal."

McDonald's said Tuesday that August same-store sales climbed 8.1 percent, helped by coffee and breakfast items. Sales on that basis have advanced 7 percent in the first eight months of the year. Alvarez declined to disclose breakfast results.

The chain offers lattes, cappuccinos and iced brews in 9,000 U.S. restaurants where consumers order coffee primarily at drive-through windows, Alvarez said.

U.S. coffee sales through restaurants, cafes and other outlets may reach $29 billion by 2011, 50 percent more than last year, according to New York-based National Coffee Association. About six in 10 adults drink coffee, making it the second most popular beverage after water.

Starbucks controls 52 percent of the global specialty coffee market, Euromonitor International Plc said. McCafe is the fifth-largest, with 1.7 percent.

Word is getting out about McDonald's coffee. In March, Consumer Reports magazine reported a taste test of basic black coffee found McDonald's stronger blend beat brew from Starbucks, Burger King and Dunkin' Donuts.

Consumer Reports' "trained tasters" visited two stores of each company. McDonald's coffee was "decent and moderately strong," whereas Starbucks was "strong, but burnt and bitter enough to make your eyes water," the magazine said.

In the U.S., McDonald's coffee sales climbed 20 percent through June from the February 2006 debut of the stronger blend. Sales that include hot, iced and specialty blends are up 34 percent this year, it said.

Sales at Starbucks stores open at least 13 months rose 4 percent in both the second and third quarters this year, the slowest growth rates since 2002. Total revenue jumped 20 percent to $4.61 billion from January through June of this year.

Rising sales of McDonald's coffee prompted Marc Greenberg, a Deutsche Bank Securities Inc. analyst in New York, in June to reduce his Starbucks stock-target price by 14 percent to $32.

"The golden arches are doing coffee better," Greenberg wrote in an investors' note. He rates Starbucks as "hold."

Starbucks has set a goal of 40,000 locations. The company had 14,396 outlets as of July 1. In the U.S., it has 10,295, compared with almost 13,800 for McDonald's.

Starbucks Chairman Howard Schultz has acknowledged the threat of fast-food chains, even though his company has 87 percent of the U.S. specialty coffee-shop market, whereas McCafe has less than 1 percent, according to Euromonitor.

Fast expansion and similar designs made Starbucks cafes lose the "warm feeling of a neighborhood store," Schultz wrote in a memorandum to top executives in February.
Starbucks now sells warm breakfast sandwiches such as eggs Florentine with spinach and Havarti cheese. It offers gourmet salads, including Asian sesame-noodle that cost $6.
Alvarez said McDonald's has no plans to offer the breadth of Starbucks beverages such as raspberry latte with soy milk and half the caffeine.

"If your only business is coffee, you better have all those options," Alvarez said.
"But we don't need 31 flavors, just enough variety to be considered a destination for coffee."

California Passes Nation’s First Statewide Menu Labeling Law

By a vote of 42 to 31, the California Assembly tonight made California the first state in the nation to pass statewide legislation requiring fast-food outlets and chain restaurants to provide nutrition information at the point of purchase – a move favored by 84 percent of Californians in a statewide poll last April. Commonly known as the menu-labeling law, Senate Bill 120 (Padilla/Migden) is seen as landmark legislation to help Californians make healthier choices.

“The Assembly vote confirms that 35 million Californians have a right to know what they are eating before they order it,” explained Dr. Harold Goldstein of the California Center for Public Health Advocacy (CCPHA), a sponsor of the legislation. “This is solid, well-thought-out legislation that recognizes that consumers can’t possibly make a healthy choice without basic nutrition information on menus and menu boards.”

The challenge to understand chain restaurant menus was highlighted earlier this year when a statewide Field Research Corporation poll was released showing that only 10 percent of Californians could pick the healthiest item from a short list of common fast foods. Restaurants and fast-food outlets are a key concern because Americans spend nearly half their food dollars away from home.

When signed by the Governor, SB 120 will make California the first state to require chain restaurants and fast-food outlets to provide nutritional information for standard menu items. Specifically, the bill requires the number of calories to be posted on menu boards. Printed menus would provide the amount of calories, grams of saturated fat, trans fats, sodium and carbohydrates.

Earlier this year, New York City and Washington’s King County mandated similar menu labeling requirements, part of a growing national trend to help consumers beat America’s growing obesity crisis. California’s SB 120, however, marks the first time that a state legislature has passed this policy (New York and King County adopted the policy through regulation).

CCPHA is an independent, nonpartisan, nonprofit organization leading efforts in California to understand and address the state’s growing obesity crisis. The American Heart Association, American Cancer Society and California Optometric Association are also sponsors of the bill. For more information on this legislation, visit the CCPHA site at: www.publichealthadvocacy.org.

FDA Endorses Strategic Framework Document on Food Import Safety

Michael O. Leavitt, secretary, U.S. Department of Health and Human Services (HHS), today delivered a strategic framework on import safety to President Bush. The framework was developed by the Interagency Working Group on Import Safety, established by the President July 18 to examine our nation’s system for assuring that all of our imported products are safe.

"I strongly endorse the release of the Strategic Framework developed by the Interagency Working Group on Import Safety and commend Secretary Leavitt for leading this comprehensive effort,” said Dr. Andrew C. von Eschenbach, commissioner, FDA. “Recent recalls of imported products have caused Americans to question the safety of imports. Americans rightly expect to purchase food and medical products without having to worry about their safety; and assuring the safety of these products is a core part of our mission at the FDA.”

The Interagency Working Group on Import Safety, made up of senior Administration officials, was established by executive order on July 18, 2007, to conduct a comprehensive review of current import safety practices and determine where improvements can be made.

“The three organizing principles that form the keystones of the Strategic Framework—Prevention, Intervention and Response—are ones we embrace strongly here at FDA and are principles we know will guide us towards better and smarter import safety strategies,” says von Eschenbach. “We know that in the 21st century's global economy, our efforts to assure product safety for Americans cannot just begin at our borders, they must begin at the time the products are produced in other countries. I am excited about the fact that these principles have been embraced by the Framework, and I look forward to working with the Group on the Action Plan to be released in November. Together, we will further integrate and enhance our processes relating to the safety of imports."

China declares 'special war' on shoddy goods

LETS STOP BUYING OUR FOOD PRODUCTS FROM CHINA!

China has stepped up its campaign to restore confidence in the "Made in China" label over the past week while also striking back at critics who have called its goods shoddy or dangerous.
Responding to a series of high-profile recalls and product safety scandals this year, Beijing introduced a new food and toy recall system last week and also announced what it called a "special war" to crack down on poor quality products and unlicensed manufacturers.

Moving swiftly with an army of inspectors, the government said it had begun nationwide inspections of farms, groceries, restaurants and other manufacturing operations in an effort to root out fake and substandard goods.

Regulators claim that in recent months, they have busted up scores of counterfeit drug makers and unlicensed toy producers, and criminal networks that make everything from fake bird flu medicine and sham Viagra to counterfeit toothpaste.

Indeed, beginning last weekend, regulators here also said food packages that did not contain a quarantine label certifying them as safe were blocked from being exported.

"This is a special war to protect the safety and interests of the general public, as well as a war to safeguard the Made in China label and the country's image," Deputy Prime Minister Wu Yi said at a news conference Friday.

Trying to persuade the international community of its commitment to improving consumer product safety after a series of scandals involving everything from tainted pet food ingredients and toxic toothpaste to toys coated with lead paint, the government even offered foreign journalists escorted tours Tuesday of a toy factory and toy testing lab in southern China's Guangdong Province, where most of the country's toys are produced.

The government hoped the tour would demonstrate that safeguards had been put into place.
The bold moves and tough rhetoric suggest that China is growing increasingly worried about the possibility of trade sanctions or further damage to its international profile heading into 2008, when Beijing is host to the Summer Olympics.

But the government has also shown its resolve to fight back against critics of its booming exports, many of whom Beijing has labeled trade protectionists.

Last week, for instance, China said it had blocked imports of American wood packaging material after finding them contaminated with what inspectors said were "worms and other creatures."
Earlier this year, Chinese regulators rejected imports of American meat, Indonesian seafood and other products from the Philippines, South Korea, Germany, France and Spain, saying those countries also shipped shoddy and tainted goods, even Evian water tainted with high levels of bacteria.

Experts said that not since the SARS, or Severe Acute Respiratory Syndrome, hit China in 2003, has the government moved so aggressively to respond to critics with such a forceful global public relations campaign.

But experts say regulators here are facing daunting challenges in trying to overhaul a corrupt and ineffective regulatory system that is ill equipped to control a marketplace teeming with unlicensed operations and entrepreneurs willing to cut corners to make a fatter profit.

"They're very concerned about the reputational damage to the China brand," said Arthur Kroeber, a longtime China observer and publisher of China Economic Quarterly, an economics research outfit based in Beijing. "But the reality is this is a vast problem, involving hundreds of thousands of factories, which are hard to police."

The government has also begun a campaign aimed at the domestic market or Chinese citizens who face the greatest risk of being exposed to substandard goods.

In recent weeks, Beijing's largest state-run television network has been broadcasting a special called "Believe in Made in China," which features interviews with regulators, in-depth reports on China's biggest companies and segments on "foreigners who buy Chinese goods."

A promotion for one special called it "fighting to save the reputation of Made in China."
Still, most of China's efforts have been aimed at the international community. And so in recent weeks, government officials and diplomats have called news conferences, held high-level talks with Western officials and also briefed foreign reporters on the drastic changes they say are under way here.

"The government is really, really serious, and you will see concrete results by the end of this year," Kuang Weilin, China's deputy consul general in New York said at a U.S. news conference last Thursday. "Officials will be held accountable for what happens."

Chinese officials are likely to take such a threat seriously, given the execution in July of China's former top food and drug regulator for taking bribes to approve untested medicine.

Beijing insists that improvements are already being seen. And while China has long insisted that 99 percent of the country's exports to the United States, Europe and Japan are safe, the government has at times acknowledged huge problems in product safety.

After government investigators found that Chinese companies had exported tainted pet food ingredients and toys coated with lead paint, they closed factories and even detained managers.
But the recalls continue to come, not just from the United States but from a growing number of other countries around the world.

Two weeks ago, for instance, New Zealand said it was investigating reports about what some called "chemical pajamas," Chinese made clothing that some scientists said contained dangerous levels of toxic formaldehyde.

And late last week, Canada announced it was recalling thousands of pencils made in China because of fears they were coated with too much lead.

Beijing, however, has made food safety one of its first initiatives. The government says it plans to spend $1.1 billion to improve food and drug safety supervision by 2010. The government also said that under the new recall system announced last week producers would be held accountable for products that posed a danger to public safety.

The government even issued a lengthy "white paper" on food safety last month and said it would begin offering rewards to those who blow the whistle on bad producers.
Regulators have unleashed a flood of new regulations and initiatives in recent months, including a promise to create national standards to govern things like cooking oils and the fillings of moon cakes.

And if anyone has doubts about food safety during the Olympics, Beijing said it was already acting: White mice will be used to test most foods served to athletes, and pigs are already being bred organically, in secret locations. Global position system, or GPS, technology is being employed to track the whereabouts of some animals.

At home, however, consumers seem to be suggesting they have heard it all before. When China Daily, the country's English language newspaper, recently asked consumers whether they believed most food in China was safe, 41 percent answered: "No."