Tuesday, March 31, 2009

Salmonella in Pistachios Spurs Recall

Barely two months after a huge recall of peanut-related products, federal officials said late Monday that a California processor would recall about one million pounds of pistachio products because of concerns about salmonella contamination.

The company, Setton Pistachio of Terra Bella, based in Terra Bella, Calif., decided to recall its 2008 crop after one of its customers, Kraft Foods, found several types of salmonella during routine analysis of the product. Kraft Foods alerted the Food and Drug Administration of its findings on March 24.

So far, no illnesses have been tied to the contaminated pistachios, though authorities were investigating at least two consumer complaints. F.D.A. officials warned consumers not to eat pistachios until the scope of the contamination was clear.

The pistachios were sent in 1,000- or 2,000-pound bags to about three dozen wholesalers, who repackaged them and resold them to other customers, said Dr. David Acheson, the F.D.A.’s associate commissioner for foods. As a result, authorities said the recall was likely to expand as the pistachios were traced to processed foods like ice cream and cake mixes.

The salmonella contamination of pistachios is not related to the recent salmonella outbreak tied to peanut products, which sickened hundreds and led to the recall of more than 3,800 products.

A spokesman for Setton declined to comment, saying the company’s own inquiry into the cause of the contamination was continuing. Setton says on its Web site that the California plant is the second-largest pistachio processor in the United States.

Kraft Foods said its inspectors visited the California plant where the pistachios were processed, and found that the plant was not keeping its roasted pistachios separate from the incoming flow of raw nuts. Like other nuts, raw pistachios can carry pathogens that are killed in the roasting process.

Kraft Foods on Wednesday recalled a trail mix containing pistachios marketed by its Back to Nature Foods unit.

Bargain-hunters buying groceries at auction

Out of toilet paper? Need to pick up a few things for dinner? Take a number and start bidding.

Many bargain hunters these days are trading supermarket aisles for the auction circuit in search of deep discounts on everything from cereal to spare ribs. Past the sell-by date? Bidders are happy to ignore that detail if they're getting a good deal.

As consumers seek relief from the recession and spiraling food prices, grocery auctions are gaining in popularity as an easy way to cut costs. The sales operate like regular auctions, but with bidders vying for dry goods and frozen foods instead of antiques and collectibles. Some auctioneers even accept food stamps.

When Kirk Williams held his first grocery auction in rural Pennsylvania last month, nearly 300 people showed up. Astonished by the turnout, he's scheduling auctions at locations throughout northeastern Pennsylvania.

"Right now, people don't have a lot of spare pocket change," said Williams, 50, operator of Col. Kirk'sAuction Gallery near Bloomsburg, Pa. "They're looking to save money."

Rich Harris, 28, who was recently laid off from his welding job, showed up at Williams' auction in Dallas earlier this month looking for meat for his freezer and snacks for his kids. With his wife pregnant with their third child, "I'm basically trying to expand my dollar right now," he said. "The deals, they seem to be fairly good."

Grocery sales make sense for auctioneers, too. Sales of baseball cards, estate jewelry and other auction staples have "fallen off a cliff," Williams said. He hopes to average about $12,000 in sales per auction, which would net him a profit of about $1,000.

The popularity of the auctions — which sell leftover or damaged goods from supermarkets, distribution centers and restaurant suppliers — comes at a time when people are stretching their grocery budgets by using more coupons, buying inferior cuts of meat, and choosing store brands over national brands.

The economic downturn, paired with the worst food inflation in nearly 20 years (grocery prices spiked in 2008 before easing in January and February), has caused a "seismic shift" in consumer behavior, said Brian Todd, president of The Food Institute, an industry information service.

"Food is one area where they can save," he said.

The increased interest has fueled growth in the auctions, which can be found in at least nine states from Oklahoma to New York.

Banana Box Wholesale Grocery, a Kutztown, Pa.-based food brokerage that supplies salvage grocery stores around the nation, has seen a marked increase in calls from auctioneers getting into the food business, said manager Greg Martin.

At Steve Schleeter's groceryauction in St. Mary, Ohio — where attendance has swelled in recent months — some regulars have told him they now do most of their shopping at the auction and only go to the store for milk and lunch meat. He estimates his customers can knock 50 percent off their grocery bills.

Cherish Francik, 42, who works for the Social Security Administration, said she wouldn't have been caught dead at a grocery auction or even a discount food store a few months ago. But the tough economy has turned her into a tightwad.

Now she brags to her co-workers about her frugality.

"Most of my life, I've been a brand-name shopper. It was a quick change for me, a real quick change," said Francik, whose haul from the Williams auction included trail mix, honey-barbecue chicken nuggets and a spiral-cut ham. "I guess it's sort of a thrill now to find something that tastes good and is the right price."

Inside the auction hall in Dallas, a small town north of Wilkes-Barre, Pa., Williams uses a singsong, rapid-fire delivery to sell everything from frozen broccoli (six boxes for $2) to pork ribs ($20 for a 14-pound hunk) to candy bars (10 Baby Ruths for $2). Especially popular are the frozen foods — pies, bratwursts, chicken breasts, popcorn shrimp, whole hams, french fries.

Displaying an 11-ounce bag of cheese curls that retails for $1.99, the veteran auctioneer chants: "Dollar and a quarter, dollar and a half. Dollar and a quarter, buck and a half. Buck and a half, buck seventy-five."

His colleague, Roger Naugle, stops the bidding at $1.50.

"Who wants the cheese curls?" Williams says. "Down there, No. 17 wants two. No. 7 wants one. No. 33 takes two. Guys, who else? These are so good. Anybody else on the cheese curls? Anybody, anybody, anybody else? All fresh and in date."

As workers fan out with armloads of bags, Williams tees up the next item. And on it goes, for hours. Customers head to their cars balancing precariously overloaded boxes of food.

Some of the goodies have wound up here because they're out-of-date. But the auctioneers stress that they're still OK to eat. The Food and Drug Administration does not generally prohibit the sale of food past its sell-by or use-by date — manufacturers' terms that help guide the rotation of shelf stock or indicate the period of best flavor or quality.

"There is not one thing in this sale today that Kirk or myself will sell you, that we would not, do not, will not, or have not taken home to our own families!" Naugle tells the crowd.

Linda Dennis, a group home manager from Wilkes-Barre, said she wasn't fazed by the Feb. 9 sell-by date on a bag of frozen pizza bites.

"The quality and taste may go down, but that doesn't mean you can't eat it," she said.

The same kinds of goods sold at grocery auctions also find their way to salvage stores, flee markets, closeout sales and food banks, though Williams said he avoids merchandise that is severely damaged or well past expiration.

Like any auction, grocery auctions aren't automatically a bargain. Savvy bidders should know what things cost at the supermarket to make sure they're truly saving money. The excitement sometimes leads bidders to overpay.

"Every once in a while, a customer bids it, and you're going, 'I'm pretty sure that's cheaper in the store,'" said Schleeter, the Ohio auctioneer.

For the most part, though, the auctions pair food that needs a home with consumers who want to save a buck.

Marvin Mason, who runs grocery auctions in Indiana, Michigan and Ohio, said the percentage of shoppers who use credit cards and food stamps instead of cash has increased, indicating more people are showing up out of necessity.

"We've had more people who are needy, who have to watch their money," he said.

Monday, March 30, 2009

Global Crisis Brewing for Cocoa Growers

Crop disease, aging trees and resulting lower yields will prevent significant cocoa production growth in the biggest producing countries Ivory Coast, Ghana and Indonesia, experts said Saturday.

Cocoa yields have fallen in Indonesia's top growing region Sulawesi due to the disease cocoa pod borer and aging trees, said Peter Petersen of the Olam Group, speaking on a panel at the Cocoa Merchants' Association of America International Cocoa Conference.

Lower household income has also forced farmers to redirect funds to their basic needs instead of improving crop production, Petersen said on the gathering's last day.

Production in Sulawesi fell 45 percent in the 2007/08 crop year, from 2005/06, and has shown no sign of recovery in 2008/09, he said.

On the other hand, cocoa production in Indonesia's Sumatra, the second biggest cocoa producer in the region, has doubled in the last four years amid low pest pressure. But Petersen did not see the area growing enough to make up for Sulawesi's fall.

The world's biggest producer Ivory Coast faces a flood of problems ranging from aging trees to poor farming that could hinder production, said Frederic Wenger of Noble Resources.

Wenger sees the Ivorian 2008/09 crop at 1.28 million tonnes, on a botanical crop basis that does not look at bean arrival figures. An adjusted trend suggests a 68 percent chance that the 2009/10 crop will stand between 1.115 million tonnes and 1.343 million tonnes, he said.

Many farmers are also growing "turn-key" rubber farms, growing rubber trees amid their other crop to either harvest both crops or switch to rubber production when the trees mature.

Managing director for London-based Primary Commodity Research Robert Fish projected the world's second biggest producer Ghana will harvest 730,000 tonnes in 2008/09, up from 717,000 tonnes the year before.

It will be difficult to sustain growth, he said, partly because the expansion in the western region appeared to be slowing.

Sunday, March 29, 2009

Derivative Markets...an understandable explanation

I am breaking away from our usual blog and for my readers this is a great understanding why we are in this mess today! Have fun reading but boy does it make sense.

Heidi is the proprietor of a bar in Detroit. In order to increase sales, she decides to allow her loyal customers - most of whom are unemployed alcoholics - to drink now but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

Word gets around about Heidi's drink now pay later marketing strategy and as a result, increasing numbers of customers flood into Heidi's bar and soon she has the largest sale volume for any bar in Detroit . By providing her customers' freedom from immediate payment demands, Heidi gets no resistance when she substantially increases her prices for wine and beer, the most consumed beverages. Her sales volume increases massively.

A young and dynamic vice-president at the local bank recognizes these customer debts as valuable future assets and increases Heidi's borrowing limit. He sees no reason for undue concern since he has the debts of the alcoholics as collateral. At the bank's corporate headquarters, expert traders transform these customer loans into DRINKBONDS, ALKIBONDS and PUKEBONDS. These securities are then traded on security markets worldwide. Naive investors don't really understand the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics. Nevertheless, their prices continuously climb, and the securities become the top-selling items for some of the nation's leading brokerage houses who collect enormous fees on their sales, pay extravagant bonuses to their sales force, and who in turn purchase exotic sports cars and multimillion dollar condominiums.

One day, although the bond prices are still climbing, a risk manager at the bank (subsequently fired due his negativity), decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi's bar. Heidi demands payment from her alcoholic patrons, but being unemployed they they cannot pay back their drinking debts. Therefore, Heidi cannot fulfill her loan obligations and claims bankruptcy. DRINKBOND and ALKIBOND drop in price by 90 %. PUKEBOND performs better, stabilizing in price after dropping by 80 %. The decreased bond asset value destroys the banks liquidity and prevents it from issuing new loans.

The suppliers of Heidi's bar, having granted her generous payment extensions and having invested in the securities are faced with writing off her debt and losing over 80% on her bonds. Her wine supplier claims bankruptcy, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 50 workers.

The bank and brokerage houses are saved by the Government following dramatic round-the-clock negotiations by leaders from both political parties. The funds required for this bailout are obtained by a tax levied on employed middle-class non-drinkers.

Finally an explanation in language I can understand ...

Saturday, March 28, 2009

A hint of success -- and looking for more

Kara Goldin used to get frustrated by the lack of healthy drinks available on supermarket shelves for her growing family.

She searched high and low, conducting her own informal research on every so-called enhanced or vitamin-enriched water she could find. None of them passed muster, she says, as they contained a ton of additives or worse yet, sugar.

"Any place that was selling beverages, I grabbed things," recalls Goldin, founder and chief executive of the small, but fast-growing flavored water company Hint Inc., during a recent telephone interview. "Everything had sweeteners in them."

So in 2004 the former AOL executive and mother of three decided to do something about it. She put in motion plans to commercially produce a drink akin to a home-made concoction of water infused with a touch of fruit - her own beverage of choice after weaning herself off Diet Coke. It was a drink that her friends and children (she now has four) also found appealing.

Goldin, 41, convinced her husband, an intellectual property attorney who had worked for Netscape and been involved with startups, to back her decision to pull $50,000 from their savings account for the production of the first batch of this new form of bottled water.

She had no background developing consumer products, but instead relied heavily on prior retail experience as former vice president of shopping and e-commerce for AOL, a business that Goldin grew from a startup to one with more than $1 billion in revenue in seven years.

"It cost a lot more than $50,000," jokes Goldin, who a year ago raised Hint's first round of financing from a venture capital group, adding roughly $2 million to an initial $500,000 from friends and family.

"I was going to load up my Grand Cherokee and go to Whole Foods and tell them that they needed this product," she says. "It was a lot more complicated than that."

Today, San Francisco-based Hint, which is backed by the slogan "drink water, not sugar," is betting on 2009 sales of about $6 million - roughly double those of last year. Goldin's husband now has a formal role in the company as chief operating officer, one of some 20 employees working to carve out a niche for Hint in the estimated $12.1 billion U.S. bottled water market.

Austin-based Whole Foods Market Inc. is now among Hint's largest customers. The company also sells all 13 flavors of its 16-ounce purified additive-free waters, including honeydew hibiscus, pomegranate-tangerine and cucumber, on its web site, drinkhint.com, at $44 for a 24-pack case. At retail, the drinks sell for $1.39 to $1.99, depending largely on the region.


"Shopping is all about convenience," says Goldin, who is trying to build multiple outlets for her additive-free water. In addition to the organic channel, Hint is pushing into mainstream and mass groceries such as Ralphs, Kroger and Costco. The company is also working with a distributor to canvas independent sandwich shops, college campuses and mom-and-pop stores, with a primary emphasis on large markets such as Los Angeles and New York.

"The hardest thing for us - a lot of the stores are not keeping enough inventory on hand because they're nervous," says Goldin, acknowledging just one of the difficulties of building a brand during a recession.

Garima Goel Lal, a senior beverage analyst for market research firm Mintel, says that other hurdles include an increasing sense of consumer frugality and a growing environmental backlash targeted at plain bottled waters that could eventually spill over into the enhanced water category. Also working against Hint is the ability of big brands controlled by beverage giants to run heavy price promotions.

"Companies like Coke and Pepsi have quite a bit of leverage," says Goel Lal. Even so, she says Hint has some positive trends working on its behalf. According to Mintel, enhanced waters were the fast-growing part of the bottled water market between 2006 and 2008. Glaceau, the leading brand in the category, grew 156 percent during this period, with $500 million in sales in 2008.

Hint also has a no-fee licensing deal with the Walt Disney Co. that Goldin says helps to increase brand awareness for some of its products; it is preparing to introduce children's packaging for the product- complete with the addition of fluoride - in coming months. And while Hint has no traditional advertising budget to speak of, it has managed to create a buzz with the backing of celebrities such as Victoria Beckham, Miley Cyrus, and Sarah Michelle Geller as well as media coverage on national television such as CNN. According to Goldin, director Steven Spielberg is a big fan.

Goldin, who recognizes that competition in the water market is filled with choices, attributes much of her success to grass roots efforts to stay in close touch with the groups that influence products on store shelves - buyers and consumers.

"We're pretty aggressive about going into the buyers and showing them everything that's in the category," she says. "And at the store level, sampling is so critical."

Friday, March 27, 2009

A vending machine entitled "Let's Pizza" will debut in Italy in a few weeks

What Next???

A vending machine that bakes fresh pizza in minutes for a few euros has got Italian chefs in a whirl before it hits the streets in the coming weeks.

The bright-red "Let's Pizza" machine uses infra-red rays and technology developed at the University of Bologna to knead flour and water into dough, spread it with tomato sauce and a choice of topping, and cook it -- all in less than three minutes.

Its developer, Claudio Torghele, says the machine has proved popular in trials in two Italian regions, but gourmets say it is an affront to traditional methods of cooking the classic dish.

"This is not just a vending machine, it's a mini-pizzeria," said Torghele, 56. "It has windows where you can watch the pizza-making process. Kids, including my own, love it: when the machine is working, there's always a crowd."

The device was developed with help from Anglo-Dutch group Unilever, which tested it in Germany, Torghele said. He hopes to launch the machines across Europe and in the United States, with ingredients varying according to local tastes.

At present it offers four toppings -- cheese and tomato, bacon, ham and fresh vegetables -- at an average cost of 4 euros. Torghele thinks "Let's Pizza" will appeal to Europeans looking for cheap options as a recession hits their pockets. "If I want to eat a great pizza, I go to a pizzeria. But our product is satisfactory, low cost and available 24-hours a day," he said. "This is crisis proof ... McDonald's is increasing its sales. Low cost, fast food is in demand."

Italy is famed for its cuisine and has seen a movement develop against fast food, called "Slow Food." But it has more vending machines than any other country in Europe, according to an industry body, mostly doling out hot coffee drinks.

Purists say the Italian pizza -- invented in the 18th century in the southern city of Naples -- cannot be rushed: the dough must be mixed and left for 12 hours, the ingredients kept fresh, and the oven pre-heated to around 300 degrees.

"This machine is a toy," Pino Morelli of the Association of Italian Pizzerias said. "Perhaps it will find a niche overseas, but Italians are born with pizza: their mothers feed it to them as babies. They understand it."

In Pizzeria Brandi, nestling near the center of ramshackle Naples, the reaction to Torghele's invention was cool.

The restaurant invented the pizza Margherita in 1889 in honor of the queen of the newly unified country, its tomato, mozzarella and basil toppings mimicking Italy's flag.

"Unfortunately, today people invent many things, but you can't make any comparison, especially in terms of quality," said chef Marcello, taking a break from sliding pizzas on a wooden pole into the dome-shaped oven. "The only benefit is the price."

"We should scrap this 'pizza machine' and bring back the old jukeboxes: at least they were charming," said Paolo Pagnani, who owns the historic restaurant.

Thursday, March 26, 2009

Congress Grills Food Manufacturers on Safety

Major food manufacturers, including Kellogg Co., King Nut Corp. and Vitamin Cottage Natural Food Markets, Inc., were grilled by members of Congress March 19 about their lack of oversight on food-safety measures.

In particular, Henry Waxman, chairman of the House of Representatives Energy and Commerce Committee, questioned the decision to rely on third-party audits from a company with links to the now-bankrupt Peanut Corporation of America (PCA), Blakely, Ga.

PCA is the source of the Salmonella outbreak that has sickened 691 people in 46 states and been linked to nine deaths.

As reported by FLEXNEWS, David Mackay, chief executive of Kellogg, told lawmakers his company relied on an independent audit report from AIB International, had safety tests conducted on the product and required PCA to provide evidence of its safety plans.

Internal documents released by lawmakers showed PCA was notified when an inspection was planned by AIB, the audit firm it hired, and told how to prepare for the audit.

However, a 2002 internal audit of PCA’s plant paid for by NestlĂ© USA found rodent droppings and dead insects and determined it was "not in compliance" with housekeeping, sanitation or pest control standards. A 2006 audit reached the same conclusion and NestlĂ© never hired PCA as a supplier.

Yogurt Trends

For a food that’s pushing 4,500 years old, yogurt sure keeps up with the times. “The great thing about yogurt is that it provides significant opportunities for innovation, particularly around fruit combinations, as well as enhancement to support low-fat or low-sugar and functional applications,” says Minerva Calatayud, global product manager, sweet goods, cheese, and dairy, Givaudan Flavors, Cincinnati.

A constellation of trends brings new life to yogurt. Developmental milestones from the past include fruit-on-the-bottom, nonfat and sugar-free, as well as drinkable and kid-friendly squeeze packs. But today’s pace of innovation is in overdrive. “What we see as we add benefits,” says Alan Reed, senior vice president, U.S. manufacturing and ingredient marketing, Dairy Management Inc.™ (DMI), Rosemont, IL, “is that the more compelling the benefit, the more likely it is to increase overall yogurt category growth.”

If any trend promises to shape yogurt’s future, it’s the headlong dive into enhanced wellness benefits.

A functional future

“For many reasons, we’ve recently seen an increase in personal accountability by consumers in the area of health and wellness,” explains Pete Budde, business development manager, probiotics, Cargill Texturizing Solutions, Wayzata, MN. “I believe that we will continue to see the consumption of yogurt increase with market support for products supplemented with value-added ingredients like probiotics.”

Probiotics have found a natural home in yogurt. “Yogurts were not chosen as probiotic delivery vehicles; yogurt and fermented milks are the natural habitat of lactic acid bacteria,” says Mirjana Curic-Bawden, Ph.D., senior scientist, Chr. Hansen, Inc., Milwaukee. “For centuries, fermented milks have been traditionally made and consumed in Europe, the Middle East and Asia. But it was not until the 20th century that we learned about different species and strains, and that some of the strains, such as Lactobacillus acidophilus, Lactobacillus casei/paracasei, Bifidobacteria and Lactobacillus rhamnosus, are able to confer additional beneficial effects.”

Probiotics’ documented benefits stand out in the area of gastrointestinal health. “Clinical documentation exists for regulation of intestinal transit; improvement of infant diarrhea and rotavirus status; reduced incidence of antibiotic-associated diarrhea; positive effect on constipation in the elderly and traveler’s diarrhea; improved status of natural defense and immune-system response; and positive effects on atopic eczema in infants,” Curic-Bawden says. “Some strains have possible effects on irritable bowel syndrome or cholesterol level, but these still need further clinical substantiation.”

Benefits are highly strain-specific. “Not every Bifidobacterium lactis or Lactobacillus casei is the same,” says Curic-Bawden. “In spite of the wide range of products on the market—in both supplements and food—only limited numbers of strains have substantial documentation that qualify them as probiotic.” These strains carry a specific alphanumeric designation, such as BB-12, LGG or CRL-431, which identifies them as probiotic. For a consumer to realize any benefits, however, probiotic organisms must survive passage through the gastrointestinal tract, where low-pH conditions, bile salts and digestive enzymes all threaten survival. Furthermore, Curic-Bawden notes, “a strain has to be able to adhere to mucosal tissue and temporarily colonize the GI tract, thus re-establishing a healthy and balanced microflora.”

They also must also remain viable for the duration of yogurt processing and storage. “Processing steps that can improve probiotic cell counts include inoculation of the proper dose; following yogurt-making procedures with regard to incubation temperature, time and pH; avoiding harmful ingredients—the addition of preservatives like potassium sorbate in a milk base before incubation will slow yogurt cultures and potentially harm probiotics—and the use of proper storage conditions along the cold chain,” Curic-Bawden says.

Even these parameters are strain-sensitive. Some show sensitivity to high sugar concentrations, especially fructose. “Sensitivity is strain-dependant,” says Curic-Bawden. “Some yogurt cultures and probiotics can be slowed down with 10% sucrose or 6% to 7% fructose, but 14% high fructose corn syrup can also do the ‘trick.’ This is relevant only if sugar is part of the milk base; yogurt cultures are not affected if sugar is added after the fermentation through the fruit prep.” Others have a very narrow temperature and pH range for optimum growth. “And even though most of the probiotic strains are anaerobic organisms,” she says, “some of them are more tolerant to oxygen, which makes them more suitable for dairy applications.”

No matter the strain, a yogurt will contain live and active cultures only if it undergoes heat treatment before acidification. The criteria of the National Yogurt Association, McLean, VA, for live and active cultures state that a finished yogurt must contain at least 1 billion live lactic acid bacteria per gram at the time of manufacture, and those cultures must remain active for the stated shelf life. Some research suggests that prebiotics—nondigestible fibers that serve as sources of carbohydrates for probiotics in the GI tract—enhance survival of probiotics in fermented milk and yogurt, and also during passage through the GI tract. “Besides ingredients like inulin, fructooligosaccharides and polydextrose,” Curic-Bawden says, “we’ve witnessed the rapid extension of the range of natural ingredients that have potential prebiotics effects.” Again, those effects are unique to each pro- and prebiotic—or synbiotic—pair. To achieve a synbiotic effect, she says, “a specific prebiotic should selectively favor the probiotic strain. The effect has to be tested in vitro and in vivo.”

Friendly fats

In addition to probiotic cultures, other, less-intuitive functionals are finding their way into yogurt. Among the more popular is the omega-3 fatty acid docosahexaenoic acid (DHA), associated with everything from healthy infant neural development to reduced heart disease risk.

As a long-chain polyunsaturate, DHA is prone to oxidation from prolonged exposure to oxygen, high temperatures and transition metals like copper and iron. Yogurt’s refrigerated storage and short shelf life makes it an ideal medium for omega-3 stability.

Experts offer several tips for working with omega-3s: If a yogurt undergoes high-shear mixing, limit its exposure to the atmosphere by shortening mixing times, keeping temperatures low and covering the mixing vessel. Add the DHA as close to the end of production as possible, such as prior to homogenization. Blend the oil with other ingredients to thermally stabilize it and to reduce its surface area. Better yet, work with encapsulated oils, and take advantage of chelating agents like citric acid and EDTA to sequester pro-oxidant metals. Nonfat applications are harder to fortify than their fat-containing cousins, but even so, some manufacturers have packed as much as 32 mg of DHA into a single 6-oz. serving, qualifying the product for an “excellent source” of DHA claim.

Another healthful fat is conjugated linoleic acid (CLA), a natural constituent of ruminant meat and dairy products with demonstrated weight-management benefits that have prompted some manufacturers to add it to yogurt. “Clinical evidence supports the role of CLA in many aspects of reducing body fat, increasing lean muscle and enhancing healthy, active living,” says Patrick Luchsinger, marketing manager, North America, Lipid Nutrition, Channahon, IL. “This means that products can be positioned not only to help dieters, but also those who want to maintain weight and certainly those who wish to enhance their exercise program for optimal body composition. This increases consumer interest in yogurt at a time when health and wellness is paramount.”

His company markets a form of CLA that “is appropriate for use in all types of yogurt,” Luchsinger says. CLA particularly shines in drinkable applications because the proteins in the beverages double as emulsifiers for it. To establish that emulsion, he suggests adding the CLA to yogurt under continuous mixing and at a temperature around 140°F. After homogenization, applying a heat treatment can extend the product shelf life. The ingredient can withstand UHT and standard pasteurization, and can be added before or after fermentation. “In the case of a fermentation step,” he says, “the CLA can be emulsified in the milk, after which a standard process and fermentation can follow.”

CLA is also a polyunsaturated fatty acid liable to oxidation. Avoiding the usual triggers—oxygen, heat, light, transition metals—is standard, but as with DHA, “other factors may help avoid oxidation, like antioxidants and the chelators citric acid and EDTA,” Luchsinger says. As for the levels that yield a health benefit, clinical trials of his company’s product have pointed to 3 grams as effective. “This can be split into different doses or consumed at one time,” he says, “so manufacturers may choose to add 1.5 grams per serving and note that it contains one half the effective daily dose.”

Protein power

Like CLA, whey protein is a natural component of dairy products that manufacturers are adding to yogurt. According to Reed, the reason for doing so is elementary: “Protein, overall, is a huge trend.” But while health-minded consumers want more protein, they don’t want more chalky, protein-powder shakes. “They’re looking for a comfortable medium that’s familiar to them and that delivers nutrition benefit,” he says. Enter yogurt. “It’s portable, it’s convenient, it’s a reasonably sized serving, and it’s really targeting those active, exercise-involved individuals.”

Why whey? Research suggests that it might help build and maintain lean muscle mass, as well as help people lose more unhealthy abdominal fat than other proteins or carbohydrates. “Whey protein may be uniquely positioned to deliver better results because of its amino acids,” says Brian Sambor, vice president, operations and technology, Tula Foods, Inc., Evanston, IL. “Whey protein is the richest source of branched-chain amino acids like leucine. Compared to traditional diets, reduced-calorie diets rich in leucine have led to greater fat loss and muscle retention, particularly when combined with exercise. When consumed after exercise, whey protein helps tone muscle, stimulates muscle recovery, and allows people to get more from their workouts.”

In yogurt, the proteins are compatible with the typical yogurt-processing heat treatments, as well as with the typical yogurt pH and flavor profile. Whey’s practical benefits go beyond stability to actual textural improvement. “It can be added to achieve specific mouthfeel characteristics,” says Michelle Ludtke, senior food technologist, Grande Custom Ingredients Group, Lomira, WI. And whey “has some water-binding properties for stability purposes. It has a clean flavor, and it’s a natural ingredient that is dairy-based and low in fat. Also, whey proteins contain some natural emulsifying properties.”

Sambor notes that “with our levels of whey protein use and processing, our nonfat yogurt is richer and creamier than many other nonfat yogurts on the market.” Further, a 6-oz. serving delivers 15 grams of protein, 10 grams of which are whey; by contrast, only about 0 to 2 grams of the protein in a standard yogurt comes from whey.

Packing this much protein in a yogurt isn’t easy. Such a heavily whey-fortified formulation “poses significant manufacturing challenges,” Sambor says. “At these levels, the heat denaturation that occurs under typical yogurt production conditions would form unwanted aggregates and an unacceptable product that is often characterized by a grainy texture and flavor defects, such as powdery and burnt notes.”

When flavoring yogurts fortified for wellness, manufacturers may encounter off notes, “sometimes bitter, but otherwise variable,” says Kim Gray, senior application scientist, global application technologies, Givaudan Flavors. “Developers of applications, as well as flavorists, must understand the interactions that can occur with functional ingredients.” Take the substitution of soy proteins for dairy. “These proteins will interact differently with flavor compounds,” she says, “and this needs to be understood or optimized to develop high-impact and high-quality flavors.” Similarly, the instability of long-chain fatty acids like omega-3s, as well as CLA, can lead to off notes. “Antioxidants can help,” she says, “but will not solve the issue.”

Not all functional ingredients pose sensory hurdles. “Actually, some of those products can bring positive attributes to a yogurt,” says Declan Roche, commercial director at Kerry Food Ingredients, Beloit, WI. “Sterols, for example, are very much like waxy, high-melting-point fats. So they can actually bring enhanced richness and mouthfeel to a reduced-fat yogurt if they’re incorporated correctly.”

That’s just what consumers want. “We believe that the good-for-you yogurts will continue to drive yogurt-category growth,” says Daphne Mazarakis, founder and president, Tula Foods. But what “good for you” means will continue to evolve. “In the past,” she continues, “it was about taking out fat and replacing it with simple sugars or artificial sweeteners. We believe that, increasingly, good-for-you yogurts will be more about positive nutrient density. You can find nutrient-dense yogurts in simple, back-to-basics products, as well as in yogurts that have added functional nutrients, such as whey proteins, probiotics or omega-3s. Consumers already associate yogurt with health, so the idea that we can bring them a yogurt with another promising health benefit is credible.”

Wednesday, March 25, 2009

Easter candy sales are estimated to total $1.77 billion in 2009, down 10.2%

The Easter Bunny will have less in its basket this year as holiday expenditure is expected to decline eight percent, according to industry research firm IBISWorld. Total sales from Easter clothing, candy, flowers, decorations, food and greeting cards are expected to fall from $14.8 billion in 2008 to $13.6 in 2009.

Holiday gift giving will take a hit because many households are continuing to tighten purse strings due to the financial climate. Candy sales in particular are estimated to reach only $1.77 billion, down by 10.2 percent from Easter 2008. Interestingly, the forecast for candy sales could have been much worse had it not been for the holiday's calendar date.

"Easter falls on April 12, compared to March 23 of last year, so candy producers and marketers have 20 additional days to merchandise their products and entice the public to spend," explained George Van Horn, senior analyst with IBISWorld. "This will cushion some of the inevitable blow on spending."

Businesses still expected to perform well this Easter are supermarkets. This industry will experience a 3.5 percent rise in food sales as families prepare their holiday meals at home, rather than dining out. Though these meals will be on a budget, the nation will spend about $4.6 billion on food this Easter.

Tuesday, March 24, 2009

Americans making more coffee at home

Daily coffee consumption in the United States was steady this year compared to 2008, while the number of people making their coffee at home rose, the National Coffee Association of U.S.A. said on Saturday.

Data from the 2009 National Coffee Drinking Trends survey, which polled more than 3,000 adults in the United States by telephone in January and February, was released at the NCA's annual convention in Boca Raton, Florida.

"Consumers still see coffee as an integral part of their everyday lives," NCA chief Robert Nelson said.

"Even if economic conditions cause some to alter their coffee choices, they are nonetheless continuing to enjoy coffee at levels very much on par with recent years," he said in a release.

Preliminary data showed 54 percent of adults drank coffee beverages daily, compared to 55 percent a year ago. With the margin of error plus or minus 1.6 percentage points, the NCA viewed consumption as statistically flat.

Of the people who said they had drunk coffee the previous day, 83 percent said they had made it at home -- up 5 points compared with year-ago figures.

"The coffee industry as a whole doesn't seem to be suffering at all, seems to be recession resilient," said Mark DiDomenico, director of Customer and Consumer Insights for Sara Lee Foodservice.

"Gourmet coffee is where we saw some of the decline," said DiDomenico, who presented the survey results on the convention's final day.

Daily consumption of gourmet coffee, which includes espresso-based drinks, fell to 14 percent, back to levels seen in 2007, he said. In 2008, this category was at 17 percent.

Another area of decline was from people who said they had drunk coffee within the past week or year. Coffee consumption in these groups fell 3 points to 63 percent and 77 percent respectively.

Those numbers suggest some of the less-frequent coffee drinkers might have stopped, the study said.

The NCA survey has been conducted since 1950 and is the longest available statistical series of consumer coffee drinking patterns, DiDomenico said.

Monday, March 23, 2009

UI study suggests salt might be 'nature's antidepressant

Most people consume far too much salt, and a University of Iowa researcher has discovered one potential reason we crave it: it might put us in a better mood.

UI psychologist Kim Johnson and colleagues found in their research that when rats are deficient in sodium chloride, common table salt, they shy away from activities they normally enjoy, like drinking a sugary substance or pressing a bar that stimulates a pleasant sensation in their brains.

"Things that normally would be pleasurable for rats didn't elicit the same degree of relish, which leads us to believe that a salt deficit and the craving associated with it can induce one of the key symptoms associated with depression," Johnson said.

The UI researchers can't say it is full-blown depression because several criteria factor into such a diagnosis, but a loss of pleasure in normally pleasing activities is one of the most important features of psychological depression. And, the idea that salt is a natural mood-elevating substance could help explain why we're so tempted to over-ingest it, even though it's known to contribute to high blood pressure, heart disease and other health problems.

Past research has shown that the worldwide average for salt intake per individual is about 10 grams per day, which is greater than the U.S. Food and Drug Administration recommended intake by about 4 grams, and may exceed what the body actually needs by more than 8 grams.

Johnson, who holds appointments in psychology and integrative physiology in the College of Liberal Arts and Sciences and in pharmacology in the Carver College of Medicine, published a review of these findings in the July issue of the journal "Physiology & Behavior" with Michael J. Morris and Elisa S. Na, UI graduate students. In addition to reporting their own findings, the authors reviewed others' research on the reasons behind salt appetite.

High levels of salt are contained in everything from pancakes to pasta these days, but once upon a time, it was hard to come by. Salt consumption and its price skyrocketed around 2000 B.C. when it was discovered as a food preservative. Roman soldiers were paid in salt; the word salary is derived from the Latin for salt. Even when mechanical refrigeration lessened the need for salt in the 19th century, consumption continued in excess because people liked the taste and it had become fairly inexpensive. Today, 77 percent of our salt intake comes from processed and restaurant foods, like frozen dinners and fast food.

Evolution might have played an important part in the human hankering for salt. Humans evolved from creatures that lived in salty ocean water. Once on land, the body continued to need sodium and chloride because minerals play key roles in allowing fluids to pass in and out of cells, and in helping nerve cells transfer information throughout the brain and body. But as man evolved in the hot climate of Africa, perspiration robbed the body of sodium. Salt was scarce because our early ancestors ate a veggie-rich diet and lived far from the ocean.

"Most of our biological systems require sodium to function properly, but as a species that didn't have ready access to it, our kidneys evolved to become salt misers," Johnson said.

Behavior also came to play a key role in making sure we have enough salt on board. Animals like us come equipped with a taste system designed to detect salt and a brain that remembers the location of salt sources -- like salt licks in a pasture. A pleasure mechanism in the brain is activated when salt is consumed.

So the body needs salt and knows how to find it and how to conserve it. But today scientists are finding evidence that it's an abused, addictive substance -- almost like a drug.

One sign of addiction is using a substance even when it's known to be harmful. Many people are told to reduce sodium due to health concerns, but they have trouble doing so because they like the taste and find low-sodium foods bland.

Another strong aspect of addiction is the development of intense cravings when drugs are withheld. Experiments by Johnson and colleagues indicate similar changes in brain activity whether rats are exposed to drugs or salt deficiency.

"This suggests that salt need and cravings may be linked to the same brain pathways as those related to drug addiction and abuse," Johnson said.

Sunday, March 22, 2009

Starbucks Faces Existential Crisis In Downturn

Most years, Howard Schultz, chairman and chief executive of Starbucks, uses the annual shareholders meeting to introduce a major new product or a cool new piece of coffee-making equipment. Something buzzworthy.

At this year's meeting, held in Seattle on Wednesday, there was nothing in the way of buzz, and Schultz introduced nothing new, except for a focus on "value" and a fresh effort to squash the "myth" that "there is a $4 cup of coffee at Starbucks."

Problem is, it's not really a myth. Some of Starbucks' coffee drinks do cost $4 and even more. But even when they cost less, they are still an extravagance. And in a recession, extravagances are the first thing to go.

These are tough times for Starbucks. It's been closing stores by the hundreds and laying off workers by the thousands. People started skipping Starbucks even before the recession got really bad. Fewer people are going to Starbucks. Same-store sales dropped by 3 percent in 2008. Before that, of course, Starbucks drove its business through expansion. It went way too far, "watering down the Starbucks experience," as Schultz himself once put it, and turning off customers. Now, the recession has thrust Starbucks into an existential crisis -- one that is largely of its own making.

But the company can't afford to stay angsty. It has to work hard to stop customers from fleeing, it has to cut costs, and, to placate shareholders, it has to find new areas of growth.

A major problem for Starbucks is that, these days, you can get a good cup of coffee at a Chevron station. Starbucks' astounding growth -- it was opening eight new stores a day just a couple of years ago -- was possible because of the dearth of good coffee elsewhere.

That's no longer true, and the "Starbucks experience" that Schultz constantly refers to is really all he has to offer. But "experience" (store ambience, personalized service, etc.) is a tough sell during a deep recession, so Schultz is now trying to make the Starbucks experience a "value" proposition. Those two concepts might seem at odds, but so far, anyway, Schultz seems to be pulling it off.

The chain, Schultz promised, will now work to convince people that its coffee drinks aren't so expensive after all. He noted, for example, that half of Starbucks' coffee drinks cost less than $3, and one-third of them cost less than $2. He's right, but that's still a pricey cup of coffee. The mission here is to retain existing customers -- and stop them from fleeing to McDonald's McCafe bars.

The recent introduction of a $3.95 breakfast combo doesn't, as some critics have said, put Starbucks at the level of McDonald's. It's the same stuff Starbucks was already selling but for about a buck less. It does nothing to harm the brand.

Similarly, Via, the chain's "breakthrough" instant coffee product, isn't an example of Starbucks going downscale but of making instant coffee seem upscale. The product is just two weeks old, but the consensus seems to be that while it's not as good as the real thing, it's a lot better than most instant coffees. Via is also clearly a major part of Starbucks' international strategy. People around the world don't look down on instant coffee like Americans do. Globally, instant coffee makes up about 40 percent of the coffee market. Starbucks says it intends to take a big chunk of the $17 billion spent on instant coffee every year.

Indeed, the only way for Starbucks to grow is through international expansion. The company says it plans to open 170 stores in foreign markets this year, particularly in China, Brazil and Russia. Just one-fifth of the chain's sales come from outside the United States.

Chief financial officer Troy Alstead told reporters on Wednesday that the company sees the potential for "much more" growth in China, where it operates 400 stores. As much as Alstead talked up international expansion, the chain's plans have been cut back. Its expansion into India was dropped, he said, after talks with potential partners and franchisees "didn't come together."

Starbucks also was planning to open stores in other new markets, such as Eastern Europe. Now, it is focusing on markets where it already has stores.

Expansion overseas might be a lot easier if Starbucks were to close more stores in the United States. But here, the company's former strength -- growth -- is now its greatest weakness. Starbucks is planning to open 140 new stores in the United States (while closing an additional 200). The trouble is, Schultz isn't about closing stores; he's all about opening them. He may have complained about overexpansion a few years ago, but he was, after all, the company chairman, and a very involved one at that. And the company still hasn't backed off its goal of someday operating 40,000 stores worldwide. If the ubiquity of Starbucks' stateside stores is a major cause of the company's problems, it's hard to figure why Schultz isn't closing a lot more of them.

For Schultz, the next year, at least, will be a balancing act. He'll need to recast Starbucks as affordable without harming its brand of "specialness." He'll need to cut costs while still investing in growth. He'll need to fend off gigantic competitors like McDonald's and Dunkin' Donuts without directly competing on price. And, perhaps most challenging of all, he'll need to persuade people to drink instant coffee.

Casual-dining chains should close a net of 1,200 locations, or about 7%

Casual-dining chains should close a net of 1,200 locations, or about 7 percent of the segment’s capacity, to restore a supply and demand equilibrium with restaurant consumers, said John Glass, a securities analyst at Morgan Stanley.

Glass said Monday that because total traffic counts to casual-dining chain restaurants rose 2.5 percent between 2005 and 2008, while same-store traffic fell 4 percent, and the total number of locations increased by 9 percent, supply had outstripped demand. The segment must shrink from its current 18,000-plus locations to 2005 levels, which was the last time the nearly 17,000 units experienced positive aggregate same-store traffic counts, Glass said.

Closures already have started, he said, but more is needed.

“2008 was the first year in many in which there was no net unit growth in the industry,” Glass said, referring to the casual-dining segment. “That’s a good start, but given that industrywide same-restaurant traffic has been running negative since 2006, it probably isn’t enough.”

He forecast that casual-dining chains would close about 450 locations this year, with no material number of new unit openings, but that the segment still would need to close at least another 750 restaurants in 2010 and beyond. The capacity reduction would improve profitability to near 8.5-percent margins, based on earnings before interest and taxes, he added.

Casual-dining chains have been the hardest hit within the restaurant industry during this economic downswing, as the segment's higher price points and much older brands contributed to declining sales. The largest failure in the sector came when Bennigan’s owners filed for Chapter 7 liquidation last summer. Brinker International Inc., parent to 1,500 restaurants under the Chili’s Grill & Bar and other casual-dining brands, closed 47 restaurants in the fourth quarter of last year and said it would close an additional 35 locations this month. Ruby Tuesday Inc. said it would close nearly 10 percent of its 714 domestic corporate restaurants, with about 40 locations closed during its February-ended third quarter and another 30 units slated to close. Including franchised and international locations, the Ruby Tuesday system totaled about 942 locations.

For the fourth quarter of last year, average domestic same-store sales fell 7 percent among casual-dining chains operated by public restaurant companies, according to Nation’s Restaurant News research.

Glass’ study did not include independent casual-dining restaurants. It used population growth and expected changes in per-capita consumption to figure excess capacity and the number of closures that would be required to restore equilibrium. Two best- and worst-case scenarios also were built.

The worst case assumed that per-capita consumption falls to 20 times per year in 2009 and 2010, leading to a needed unit-count reduction of 2,358 units, or 13 percent of the sector. Conversely, the best-case scenario assumes that per-capita consumption increases to 23 times per year, which would require little to no capacity reduction. Glass noted that per-capita annual consumption during the past six years has ranged from a high of 22.5 in 2006 to a low of 21.8 in 2003, according to NPD Foodservice data.