Broad Street Licensing Group Food News

Darden Struggles to Remain Relevent

September 26th, 2014

Darden-logoThis space has been highly critical of Darden Restaurants in the past.

Investor pressure forced the company to sell its Red Lobster unit.

Now at least one investor is wondering if Darden’s Olive Garden concept has gone astray with too much consumer choice.

NY-based hedge fund Starboard Value LP (which owns 8.8% of the company’s outstanding shares) has presented management with 300 slides lambasting everything from food waste caused by the chain’s endless pasta bowls and bread sticks to a menu “too complex” and far more extensive at over 90 offerings than the 60+ offerings at competitors like Bravo Cucina Italiana and Brio Tuscan Grille.

Some of Darden’s other banners have complicated menus, including Longhorn Steakhouse (98 items vs. Outback Steakhouse at 70 and Texas Roadhouse at 64). Red Lobster has a whopping 138 menu items vs. Joe’s Crab Shack at 79).

Olive Garden is in the sites of its investors because it was the only concept to post a revenue decline in the last quarterly earnings report.

The trend among fast food operators has been to simplify menus. Burger King and McDonald’s have both come to the conclusion that too many LTOs (limited time offers) complicate their supply chain. And some of the darlings of the casual dining sector like Chipotle Mexican Grill are known to please millennials by keeping their menus simple and straightforward.

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Private Label: the Canadian Experience

September 25th, 2014

Like in the US, private label products have done well north of the border.

A study by a disinterested third party asked consumers who buys them regularly who only occasionally.[1] The results show that sales are flat at $11.4bn while national brand dollar sales are up 3% to $50.9bn. Overall, Canadians spent $844 on private label products annually (+2% from a year ago). Private label products are 30% less-expensive than national brands, but the gap has narrowed thanks to price increases by PL retailers. Overall, Canadians spend $12.20 per trip on private label products with households making 69 trips per year to purchase private label products. As in other markets, retailers are becoming more concentrated, resulting in increased private label deployment. Other insights from the study include:

  • Heavy private label buyers are typically from larger households with kids under 18, or under 45 with higher incomes (over $70,000);
  • Super-heavy and heavy private label buyers make up 60% of total private label dollar sales;
  • The heaviest private label buyers spend more than the average shopper across all product categories and spend more per shopping trip; private label products may account for over 33% of their total shopping bill;
  • The “private label buyer” has shifted to a one-person household, aged 55- 64 with an income of $100,000 or more.

[1] Source: The Nielsen Company.

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Food Safety Part 3: E. Coli Down, Salmonella Up

September 24th, 2014

e. Coli bacteria

While E. coli gets most of the headlines, illness caused by the STEC O157 variety (the most common cause of the bloody diarrhea affecting humans) has actually decreased 50% over the past 15 years.

Overall in fact, cases of E. coli and four other pathogens (campylobacter, listeria, vibrio and yersinia) are down 23%.[1]

Unfortunately, the same can’t be said for salmonella: infection rates have increased 10% over the past 15 years, with up to a million Americans becoming sick from it every year.

One reason for the success in curbing E. coli infection has been improved processing for beef. The opposite helps to account for the rise in salmonella infection, particularly lax oversight and industry slaughter and processing practices that have lagged behind the times. For example, when chickens are gutted at meat packing plants, the carcasses are passed through what insiders call the “fecal bath” that can spread the contamination to all the carcasses. Processors treat the baths with chlorine, despite concerns this is adding a known carcinogen to the meat.

Beef processors, on the other hand, are now testing proactively, and in the case of some companies we’ve been dealing with, treating meats with washes and other measures designed to intervene before there is a problem. Finally, consumers and foodservice professionals have both become more aware of the dangers of under-cooking beef, and have changed their preparation routines and cook times. However, the changeover to eating more fresh vegetables has given salmonella an entry point into the food chain, as it thrives everywhere from spinach fields to processed peanut butter.

[1] Source: “Vital Signs,” a report by the Centers for Disease Control and Prevention.

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Food Safety Part 2: Irradiation

September 23rd, 2014

Despite the fact that irradiating food safely kills dangerous bacteria like the E. coli outbreak in Germany that has killed over 20 people and sickened thousands, US retailers remain wary of carrying irradiated food.

That’s partly because consumers have failed to embrace the process (though sometimes they don’t know they’re eating food that has been irradiated).

Meat, spices, and the seeds used to grow sprouts (reportedly the source of the contamination in Europe), lettuce and spinach have all been approved for irradiation. The process has no effect on the texture, and does not leave any radioactive residue.

The food is passed beneath a source of radiation such as gamma rays or X-rays (used to sterilize medical implements). Currently 15-18MM pounds of ground beef (a prime source of E. coli contamination) are irradiated annually.[1] While retailers are supposed to label irradiated foods, many spices and about 30MM pounds of imported guavas and mangoes are dosed to kill insects with no indication of this on packages or in stores.

[1] Source: Minnesota Beef Council; this is a tiny fraction of the US ground beef supply.

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Food Safety Part 1: High Pressure Pasteurization

September 22nd, 2014

Each year, one person in six gets sick from something they ate.[1] The concentration of food distribution points means that illness is easily spread to large numbers of the population. Continuing outbreaks of food-borne pathogens make it imperative to look at various means for safeguarding our food supply & insuring healthy, nutritious and tasty fare end up on store shelves, restaurants and all food outlets.

With fresh vs. frozen less than 20% in the U.S. and the reverse in Europe, food marketers are looking for ways to get the “shelf” (as in “shelf life”) that retailers need to embrace non-frozen prepared meals.

Companies like Gourmet Boutique have extended shelf to 21 days, but with no returns or credits allowed for spoilage, large chains are resisting the fresh-prepared category, demanding 60-day “shelf” that few vendors can yet provide. One solution has been to deliver products frozen that are then “slacked out” (thawed), a process that destroys the texture of many foods. Now, you might ask why any sane consumer would buy a fresh meal or side with an expiry date two months out, but in the case of the “slacked” frozen foods, the date stamp is started once the food is thawed. Still, the challenge for the retailer is how to overcome the time lost in shipping, storage, distribution and sale.

One solution is high pressure pasteurization (HPP)[2], a process which puts foods under intense liquid pressure[3] for 3-5 minutes, rendering bacteria, mold and yeast inactive.

It is also known by the names Pascalization (after Blaise Pascal, the 17th Century thinker who wrote about pressure in liquids), and bridgmanization after Percy Bridgman, who received a Nobel Prize for his work on the physics of high pressure.

HPP facilities are expensive ($500,000-$2.5MM),  but the process eliminates the loss of flavor and freshness associated with conventional high heat pasteurization (though some foods require heat to kill certain microbes).

HPP works best with foods high in acidity, and so far has been used primarily on cooked ready-to-eat meats, guacamole, tomato-based salsa, applesauce, orange juice, and oysters. Cargill has recently developed a process for ground beef using HPP which doubles shelf life from 21 to 42 days, and doesn’t reduce the beef to mush or lighten it to the point it looks like ground veal.

Quebec food manufacturer Natur+l XTD has not only added HPP equipment to its site, but is using a special 2D barcode on the product’s label that will allow shoppers to access information about the process with their cell phones. Not surprisingly, Chinese equipment manufacturers are investing in HPP technology, both for domestic use and export.

Come back tomorrow to find out about Irradiated Foods

[1] Source: Vital Signs, a paper from the Centers for Disease Control.

[2] The process is also known as high pressure processing, pascalization (named for Louis Pasteur), bridgmanization (named for Percy Williams Bridgman, 1946 Nobel Laureate for work in high pressure physics) high hydrostatic pressure processing (HHP), ultra high-pressure processing (UHP) and cold pasteurization.

[3] 87,000 pounds per square inch.

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Cows With Guns

September 19th, 2014

The meat eater’s nightmare. Share this with your vegan and vegetarian friends…

From humorous songster Dana Lyons, composer of the hilarious “I’d Go Anywhere To Fight For Oil To Lubricate the Red White & Blue.”

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Guiding Stars Gives Consumers “Better for You” Options

September 18th, 2014

We’ve been hearing for years how consumers want “better” or “healthier” options, but then go out and gorge themselves on Big Macs and processed foods high in fats, sodium and calories.

One of the problems has been sorting through the mountain of information available to shoppers.

Some of it is deliberately misleading, yet even truthful packaging can require a dietician to sort out the conflicting details. How much salt, for example, is too much? Are whole grains really better for you, or just a plot by the tree huggers? The media doesn’t help matters, often going off on obscure problems like “pink slime” while ignoring the dangers of sugary sodas or processed foods. And “common knowledge” may be no help. For example, we’ve all been told it’s better to buy canned tuna that’s packed in water rather than in oil, right?

Not necessarily.

At least, not according to Guiding Stars, a system of food ratings first developed by New England grocery retailer Hannaford Bros., now being licensed to other retailers and even foodservice outlets like university & corporate cafeterias, schools and hospitals. That’s because salt might be a hidden downside, and not all processors use the same amount of sodium. You can scan the label, but Guiding Stars makes it easier to compare products. The principle is simple: all the foods in the store get a star rating that tells you at a glance whether it’s better or not so better.

And the good news is: you make the choice. One of the objections to government regulation in the food space is that it takes away personal choice and responsibility. The Guiding Stars system allows consumers to choose what they eat while making informed choices. The ratings are science-based, having been developed by a panel of five nutritional experts who came up with a proprietary, patented algorithm that measures the “good” and “bad” in food, debiting bad things like added salt or sugar or trans-fats, and giving points for good things like vitamin & minerals, or whole grains. The food then receives 0-3 stars.

For example, whole milk receives a “fat” zero while skim milk earns a “lean” 3 stars. Hot dogs get zero stars, while 96% lean ground beef gets three. Canned green beans with added salt are a fail, while spinach (fresh, frozen or canned without added salt) all get three stars.

Popeye would be proud.

The markings appear on marketing materials, department signs, scale labels (for meat & fish), but most importantly, on unit price tags. This makes it easy for shoppers to make quick comparisons and judgements. Despite talk about smart phone apps that can give you nutritional information from Q-codes, they’re still relatively untried. No app beats your own eyes.

Unlike some efforts to mask a corporate marketing wolf in a “better for you” sheep’s clothing, Guiding Stars claims to not be influenced by price, brand or manufacturer trade groups. The program boasts over 100,000 foods in its database, and participating retailers and foodservice operators have to upload nutritional information on all items sold (fresh foods are rated by data from the USDA/ARS National Nutrient Database SR-22). The results can be tough: while 100% of all fruits & vegetables get at least one star, only 28% of breads & baked goods and just 11% of soups do. Ouch.

Currently Guiding Stars is in 1,700 stores in 20 states. And of course it has an iPhone App. While not surprisingly, Hannaford’s parent company Delhaize Group banners have embraced Guiding Stars, other chains including Marsh are coming on-board by licensing the concept. The Surgeon General has even cited Guiding Stars as “a powerful model” that helps consumers make smart choices without policing their food or restricting what they can eat.

It’s nice to report a little good news.

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Food Additives & Coloring Again Under the Microscope

September 17th, 2014

Advocacy groups have insisted for decades that food colorings and other additives cause or aggravate hyperactivity in children.

The FDA had an expert panel review the science on this question. Natural food additives don’t require approval, but their application to foods does (huh?).

In 2008, the Center for Science in the Public Interest (CSPI) petitioned the agency to ban Yellow #5, Red #40, and other synthetic food colorings because they “have long been shown in numerous clinical studies to impair children’s behavior.” The European Parliament has enacted what critics call a de facto ban on additives by requiring the labeling saying “may have an effect on activity and attention in children.” European manufacturers our agency regularly work with point to pressure from retailers for a “clean label” (i.e., no additives).

But the FDA has recognized no link between food additives and behavioral changes in children, despite a 2007 study[1] that found “mild but significant” increases in hyperactivity when a cocktail of colorings was given to children aged 3-9.[2]

The anti-regulatory atmosphere in government & industry has made any significant action unlikely unless scientists can find a “smoking gun” showing that additives do harm children.

[1] Published in the UK medical journal The Lancet.

[2] Background material included in this edition of Food Industry Newsletter.

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Will The Government Ever Outlaw Marketing to Kids?

September 16th, 2014

Regular readers know we have been watching the efforts of both government regulators and lobbying groups to curb or even ban ads and other marketing of high-fat foods aimed at kids that most authorities believe are helping fuel this country’s obesity problem.

The Federal Trade Commission (FTC) has proposed guidelines on what marketers can do; now a group of 550 health institutions and professionals[1] even took out newspaper ads two years ago asking McDonald’s CEO Jim Skinner to cease marketing products high in salt, fat, sugar and calories in “whatever form they take,” and to retire Ronald McDonald and the ubiquitous toys in Happy Meals. McDonald’s has shot down the idea, cloaking its greed in claims that Ronald is the “heart and soul of Ronald McDonald House Charities.” There is no greater scoundrel than one who would hide behind sick children.

[1] David L. Katz, director of Yale Prevention Research Center and editor-in-chief of Childhood Obesity; Robert S. Lawrence, director of the Center for a Livable Future, Johns Hopkins Bloomberg School of Public Health; Marion Nestle, Paulette Goodard professor in the Department of Nutrition, Food Studies and Public Health at New York University; and Walter Willett, chairman of the Department of Nutrition, Harvard School of Public Health.

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Cranberry Juice & UTIs: It’s Complicated

September 15th, 2014

For years cranberry juice has been thought to help fight bladder infections and UTIs (urinary tract infections) because of the chemical proanthocyanidin.

But studies[1] indicate the chemical has no effect, though cranberry juice does keep bacteria from adhering to bladder cell walls.[2] With over 200 active compounds, as well as ascorbic acid (vitamin C) plus several other acids, cranberries are keeping researchers in the dark about what actually helps prevent the infections. Best guesses are the ascorbic acid or even the dye used in coloring the juice. After all, antibiotics were first developed by German dye researchers such as Paul Ehrlich.

In other health news, while only studied for one month, U.S. Department of Agriculture (USDA) scientists have concluded heirloom tomatoes like the Tangerine variety may have more of the powerful antioxidant lycopene than red tomatoes. Conventional tomatoes have trans-lycopene, or isomer, while tangerine tomatoes have tetra-cis-lycopene. You will be tested on this next week.

[1] Source: Clinical Infectious Diseases.

[2] The mechanism by which cranberry juice provides its anti-bacterial action.

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