IFDA's Daily Update

July 02, 2008

The industry needs to implement a system for tracking fruits and vegetables from the field to the table.

Agree - 70%
Disagree - 30%

Operator News

The restaurant industry's performance improved in May, according to the National Restaurant Association's comprehensive index of restaurant activity, which rose for the second consecutive month. The Restaurant Performance Index stood at 98.6 in May, up 0.2% from April's level. Full Story

Starbucks Corporation will close approximately 600 underperforming company-operated stores in the U.S. The store closures will occur during the remainder of fiscal 2008 and the first half of fiscal 2009. The company also expects to open fewer than 200 new U.S. company-operated stores in fiscal 2009. Full Story, Letter to Shareholders

A backlash is brewing against Starbucks over its Pike Place Roast coffee, which attracted new business, but alienated a small yet vocal group of longtime patrons, according to The Wall Street Journal. The new, milder brew offered a more approachable cup of coffee, which played down the company's more-established robust roasts. The debate is now over what customers think Starbucks should stand for, either bold coffee for connoisseurs or a tamer brew for the general public, reported AZCentral.com. Full Story (Free Registration Required)

MGL Asset Management Group LLC offered to buy Krispy Kreme Doughnuts Inc. for more than $477.5 million, reported Forbes. Full Story

DineEquity, Inc. completed the sale of 26 company-operated Applebee's restaurants in Southern California to Apple American Group LLC, generating approximately $27 million in after-tax cash proceeds. Full Story

Shells Seafood Restaurants, Inc. will introduce a new menu that emphasizes value and variety with lower prices and over 20 new offerings. Full Story

The Cereal Bowl will "go green" with a new store design and a partnership with The Sugar Cane Paper Company. The new location, which is expected to open in July, will be the first of three new stores expected to open late this summer, reported QSR Magazine. Full Story

Retail News

Although the retail climate changed dramatically over the last year, the top retailers have not, according to STORES' Top 100 Retailers List. In 2007, Wal-Mart was ranked number one with sales of $379 billion, followed by The Home Depot; CVS Caremark; Kroger; and Costco. Full Release, Full Article, Full List

Ahold completed the sale of its 73.2% interest in Schuitema N.V. to private equity firm CVC Capital Partners. Full Story

BI-LO will offer paperless coupons in its 220 stores this summer. Full Story

NEW FROM THE FOOD INSTITUTE
Foodservice Price Trend Handbook 2007
Featuring Five Years of Monthly Pricing for 59 Items in 12 Major Food Categories

Exclusive to The Food Institute, this publication is valuable for anyone selling or buying foodservice products. Updated through 2006, the handbook provides historic five year price trends in categories such as Fresh Vegetables, Tomato Products, Frozen Vegetables, Canned Fruits, Boxed Beef, and Chicken, enabling you to better budget for foodservice product sales and purchases. Click here for details.

Industry News

The emergence of a new consumer concept called "my economy" was noted in Euromonitor International's 25 Global Consumer Trends for 2008 report. Troubled by economic uncertainty, consumers are becoming anxious and are focusing on ways to secure financial stability. Specifically, "with food, drinks and personal care products, the chances are that people will trade down particularly in areas that are less important to them," noted Gina Westbrook, research manager at Euromonitor International. Full Story

Campbell Soup Company outlined plans for the company's U.S. Soup business for the upcoming fiscal year, with a focus on the introduction of new products. For example, it will introduce Campbell's V8 soups, new Swanson all-natural cooking stocks in both beef and chicken varieties, and a new line of Campbell's Select Harvest ready-to-serve soups. Meanwhile, the company also detailed its plans for expansion in Russia and China. Full Story

Latest sales & earnings for food related companies (Updated Daily)

Bunge Limited agreed to acquire the international sugar trading and marketing division of Tate & Lyle PLC, expanding its international trading and marketing activities and creating a stronger network for sugar origination in Brazil, Thailand and other geographies. Full Story

The UK Takeover Panel notified The Manitowoc Company, Inc. that Enodis plc intends to recommend its offer following completion of an auction process with Illinois Tool Works Inc. Manitowoc's successful bid was approximately $2.7 billion, including the assumption of Enodis' net debt. The transaction is expected to close in the fourth quarter of 2008. Full Story

SAFC Supply Solutions added an additional 200 Halal certified food-grade products to its Flavors & Fragrances aroma chemicals product line. This addition expands SAFC Supply Solution's Halal offering to over 550 products. Full Story

SABMiller plc and Molson Coors Brewing Company closed on the transaction to combine their U.S. and Puerto Rico operations to create MillerCoors, which began operating as a combined entity on July 1. Full Story

Widmer Brothers Brewing Company and Redhook Ale Brewery, Incorporated completed their merger, renaming the combined company Craft Brewers Alliance, Inc. Full Story

Dawn Food Products, Inc. will increase prices for orders placed on and after July 1, reported AMOnline. Dawn supplies a complete line of mixes, bases, icings, glazes, fillings, frozen dough, par-baked and fully baked products and equipment to the food industry worldwide. Full Story

U.S. beef is now being sold in South Korea; however, some supermarket chains will not sell American beef and several restaurants will not serve it due to negative public sentiment. McDonald's is advertising that they use Australian beef, not American, reported The Associated Press. Full Story

Smithfield Foods, Inc.'s 50/50 joint venture with funds controlled by Oaktree Capital Management LLC, Groupe Smithfield Holdings, S.L., agreed to merge with Campofrio Alimentacion, S.A. Smithfield, which currently owns 24% of Campofrio, will own 36% of the combined company after the merger. Full Story

Royal Wessanen reached an agreement to acquire So Good International Limited, a UK-based producer of dairy-alternatives, including a range soy based beverages. Full Story

Health News

Smaller packages may lead consumers to eat more by decreasing their wariness about how much they consume, according to a study published in Journal of Consumer Research. Study participants ate nearly twice as many chips when given nine small bags as when given two large ones and hesitated less before opening the small bags, reported The New York Times on the Web. Full Story (Free Registration Required)

A few more portions of broccoli each week may protect men from prostate cancer, according to British researchers. A chemical in the food sparks hundreds of genetic changes, activating some genes that fight cancer and switching off others that fuel tumors, stated Richard Mithen, a biologist at Britain's Institute of Food Research, reported Reuters. Full Story

Mice given the equivalent of six to eight cups of coffee a day were less likely to develop a disease similar to multiple sclerosis, according to a study. Caffeine appears to prevent nervous system damage; however, experts recommend no more than five cups a day, amid evidence higher doses can worsen diabetes, reported BBC News. Full Story

Washington News

The government is about to start testing numerous other types of fresh produce to determine the source of the nation's salmonella outbreak. However, officials will not say what will be tested, reported The Associated Press. Full Story

A Minnesota judge ruled that Wal-Mart Stores Inc. violated state wage and hour laws, requiring employees to work off the clock. The retailer must pay $6.5 million to thousands of current and former employees and could face a fine of up to $1,000 for each violation of the Minnesota wage and hour rules, reported Reuters. Full Story

Agricultural Research Service scientists developed a hide-washing tool that significantly improved the safety of U.S. beef while saving the industry millions of dollars each year. An estimated 50% of U.S. feedlot-raised beef cattle undergo the washing treatment, which reduced the national incidence of E. coli in ground beef samples by about 43%. Full Story

Market News

Midwest farmers are trying to decide whether to replant or give up on this growing season in favor of collecting federally subsidized crop insurance. If enough acres are planted and the weather turns favorable, Midwest farmers could produce enough to help ease inflationary pressure hitting the food sector. But crops planted this late run a risk of an early frost killing them before maturity, reported The Wall Street Journal. Full Story (WSJ Subscription Required)

Whole Foods offers nearly $10 million annually to local producers through its loan program and some 29 U.S. businesses have benefited as a result. For example, Laughing Giraffe Organics, a distributor of raw granola and macaroons throughout the Western U.S., received a $20,000 loan in 2007 that provided the capital to get its products into grocery stores, reported AZCentral.com. Full Story (Free Registration Required)

Cal-Maine Foods, Inc. closed its acquisition of the majority of the assets of Zephyr Egg Company. Full Story

Certified organic acreage farmed in Washington state increased by an estimated 27% between 2006 and 2007. Additionally, some 629 organic crop and livestock farms and 71 transitional farms were certified organic in 2007, according to the Washington State University Center for Sustaining Agriculture and Natural Resources. Full Story

The value of California agricultural exports increased 6%, according to USDA. The state's food and farm exports totaled more than $11.3 billion during the most recent fiscal year. California-based farm exporters saw gains in nearly all categories, and California leads the nation in the value of agricultural exports, reported California Farm Bureau. USDA Data Sets

More water will flow to California's drought-stricken Central Valley farms because of transfer agreements made by the state. The additional water will help alleviate pressure on permanent crops like nuts and grapes. But it may not be enough to save crops that have already been abandoned and are now wilting, claims Sarah Woolf, spokeswoman for the Westlands Water District, reported The Fresno Bee. Full Story (Free Registration Required)