May/June 2007 AFI Newsletter
Mark Your Calendars for AFI Town Meeting; FDA Launches Exemption Notification System; FDA Releases Food Defense Software, Releases Study Results on Health Claims; USDA Summarizes Developments in the U.S. Food Marketing System; Ethnic Food Sales on the Rise; ; Federal Court Rejects Attempt to Weaken Dolphin-Safe Tuna Labeling; Study Shows Private Labels Appeal to Consumers; and more.
— AFI NEWS —
MARK YOUR CALENDARS
FOR 2007 AFI TOWN MEETING
The 2007 AFI Town Meeting will take place September 24-26 at the Doubletree Hotel in Washington, D.C. Representatives from government agencies such as FDA, Customs and Border Protection and USDA will be invited to speak. We’ll also be inviting members of Congress. Look for complete details soon. — PRESIDENT’S REPORT — • Imported foods, particularly imports from China, remain a target in the press and with lawmakers. Some members of Congress say the U.S. should consider banning food imports from China if FDA cannot ensure their safety. As mentioned in the May AFI Update, a bill passed the Senate that would create an “adulterated foods registry.”
Much of what’s being proposed is a knee-jerk reaction from people who don’t know the issues involved. There’s a lot of grandstanding going on as well. In the end, it’s likely cooler heads will prevail and any changes made will not be so drastic.
• AFI continues to monitor and participate in efforts to extend the ATPA, particularly for Peru and Columbia, and for extension of the president’s trade promotion authority. As this newsletter was being prepared, deadlines on both issues were fast-approaching but several possibilities for extensions were in the mix. AFI thanks the many members who sent letters to Congressmen on this issue.
• USDA published a Federal Register notice with details on the new research and promotion order being sought by the honey industry. The new order would take the place of an existing order. The new order’s streamlined format will make it more effective than the current order. The National Honey Packers and Dealers Association, a section of AFI, has been a leader in the industry effort for the new order. AFI members who handle honey may contact the AFI office for information on writing comments regarding the new proposal. FDA LAUNCHES EXEMPTION
NOTIFICATION PROGRAM
FDA launched a web-based submission process for small businesses to file an annual notice of exemption from the nutrition labeling requirements. In addition to businesses having easy access to update their information, firms eligible for the exemption will receive an electronic reminder when it is time to resubmit their nutrition labeling small business exemption notice.
One exemption, for low-volume products, applies if the person claiming the exemption employs fewer than an average of 100 full-time equivalent employees and fewer than 100,000 units of that product are sold in the U.S. in a 12-month period. To qualify for this exemption the person must file a notice annually with FDA.
Another type of exemption applies to retailers with annual gross sales of not more than $500,000 or with annual gross sales of foods or dietary supplements to consumers of not more than $50,000. For these exemptions, a notice does not need to be filed with FDA.
Companies that want to submit an exemption notice via the internet can set up an account at: https://info1.cfsan.fda.gov/nle/client/login.cfm. FDA will continue to accept notices filed by mail or fax. FDA RELEASES FOOD DEFENSE SOFTWARE
FDA introduced a new software program, called the CARVER + Shock Software Tool, to help growers, packers, processors, manufacturers, warehousers, transporters and retailers in the food industry to assess how vulnerable food facilities are to biological, chemical or radiological attacks.
The basis of the program’s name is an acronym (CARVER) standing for criticality, accessibility, recuperability, vulnerability, effect and recognizability. The program was developed by the FDA’s Center for Food Safety and Applied Nutrition along with Sandia National Laboratories, the Institute of Food Technologists, USDA’s Food Safety and Inspection Service, the National Center for Food Protection and Defense, state representatives and private industry representatives.
The CARVER tool also evaluates psychological impacts of an attack, taking into consideration this impact is greater when there is a large number of deaths or if a target has historical or cultural significance.
The software tool can be evaluated and downloaded by visiting www.cfsan.fda.gov. FDA RELEASES STUDY RESULTS
ON HEALTH CLAIMS
Consumers are more likely to consider buying products with health claims when the claim mentions the nutrient responsible for the benefit, according to a study by FDA. Similarly, the purchase intent is stronger when they see a substance-specific health claim than when they see any other health messages (nutrient content claims, structure/function claims, dietary guidance statements) or a label without any health message. However, they are least likely to buy a product when they see a nutrient content claim or a label that does not include any health message. USDA SUMMARIZES DEVELOPMENTS
IN THE U.S. FOOD MARKETING SYSTEM USDA’s Economic Research Service issued a report of major developments in the U.S. food system over the past 10 years. Among their findings were: -
An increased presence of non-traditional grocery retailers, such as supercenters and drugstores.
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Competitive responses by traditional grocers
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Food companies are attempting to differentiate themselves from the competition by reporting voluntary activities that demonstrate social responsibility and by more-tailored advertising campaigns and product offerings.
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New food product introductions continue to set records.
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Product labels are designed to appear to consumer self-image, i.e., “premium” and “gourmet.”
ETHNIC FOOD SALES
ON THE RISE
Spending on ethnic foods in the U.S. grew at an average annual rate of 4.9 percent over five years through 2005, according to Global Information Inc. Ethnic foods accounted for 11.8 percent of all retail food sales in the U.S, reported The Chicago Tribune.
The Food Institute reports that in 2002 there were 1,496 African-American food manufacturers garnering 4.65 billion in sales and employing 30,578 employees. Food Institute president Brian Todd believes convenience is driving sales, noting the biggest shift occurred in the past decade as more women entered the workforce and time-starved consumers needed a way to get that home-cooked taste in less time. NUT SNACKS SHOULD TARGET
HEALTH-CONSCIOUS CONSUMERS
Makers of nut snacks could boost lackluster sales by marketing the products from a health platform and publicizing the nutritional benefits of a diet rich in nuts, reported Bakeryandsnacks.com.
“There has never been a better time to focus on health to promote these products. It is an easy way of boosting business and manufacturers are missing out on this opportunity,” said Jeannette Hills, a nutritionist and consultant for the American Peanut Council.
By targeting consumers who are concerned about weight issues or just aiming to improve their diet, nut manufacturers are well-placed to benefit from the anti-obesity backlash. While consumers have been reticent to embrace any products with a high fat content, the American Peanut Council stresses that the type of fats found in nuts are unsaturated and, therefore, actually needed for health. FEDERAL COURT REJECTS ATTEMPT TO
WEAKEN DOLPHIN-SAFE TUNA LABELING
The Ninth Circuit Court of Appeals ruled that Commerce improperly sought to weaken the regulations specifying the conditions under which yellowfin tuna harvested in the eastern tropical Pacific Ocean can be labeled “dolphin-safe.” The court’s decision could make it difficult for Latin American countries to export tuna to the U.S. since U.S. consumers overwhelmingly prefer tuna labeled as dolphin-safe.
The International Dolphin Conservation Program Act required the Department of Commerce’s National Marine Fisheries Service to conduct certain scientific studies to determine whether or not the practice of encircling dolphins with purse seine nets while fishing for tuna was having a significant adverse impact on depleted dolphin stocks in the eastern tropical Pacific. NMFS made a negative determination in 1999 but was overruled by the courts due to inconclusive evidence because the agency failed to conduct two of the three studies required under the IDCPA. NMFS made another negative determination in 2002 after additional research, however, the additional research did not include the statutorily mandated studies either.
In its decision the appellate court upheld the district court’s ruling against the second determination stating:
No deference to agency discretion as to the methodology of its studies is appropriate when, as was the case here, the agency ignores its own statistical methodology;
Because most of the data NMFS relied upon was inconclusive, the agency’s determination was not rationally connected to the best available scientific evidence;
The NMFS determination was, to at least some degree, influenced by political and foreign policy considerations (specifically, the interest of Latin American countries in retaining access to the U.S. tuna market) rather than strictly scientific concerns.
The court said NMFS may not change its regulations to allow dolphin-safe labels to be used on tuna caught with purse seine nets. The court declined to give the agency another chance, citing its “intransigence in following Congress’ mandate” and the fact that the deadline for conducting the studies required under IDCPA has expired. As a result, dolphin-safe labels may only be used if no intentional encircling of dolphins occurred during the entire fishing trip in which the subject tuna were caught. SURVEY SHOWS PRIVATE LABELS
APPEAL TO CONSUMERS
Results of a new nationwide survey show shoppers’ affinity for private label products in U.S. supermarkets, drug stores and mass merchandisers is greater than ever. The survey conducted by Ipsos MORI for the Private Label Manufacturers Association revealed:
Nearly half of all respondents said their regular shopping cart contains up to one-quarter of store brand items. About one in five indicated their cart is filled half or more with the products. For all consumers, each time they shop, the average amount of private label purchases is 32 percent.
Forty-one percent of shoppers now identify themselves as “frequent” buyers of store brands – an increase from five years ago when 36 percent described themselves that way and a major change from 15 years ago when on 12 percent were frequent buyers.
Almost seven out of ten agree that the private label products they buy are as good, if not better, than their national brand counterparts. Consumers at the highest and middle-income levels are significantly more likely to increase their purchases of private label in the upcoming year than those in the lowest income range.
Mitsui Foods International, Inc. announced the integration of Mitsui USA’s coffee and tea business into Mitsui Foods’operations. Mitsui USA has supplied green coffee beans to roasters as well as roasted beans and other coffee and tea products directly to retail customers since 2000. The company says the merger will provide the coffee and tea team with the sales, marketing, customer service and logistics resources it requires to drive sales of value-added products to the retail trade. Taky Shimada, previously the general manager of the Foodstuffs Department at Mitsui USA, will lead the new Coffee & Tea Division as senior vice president. Mitsui Foods International also announced the hiring of Evan Hyman as Product Manager. Reporting to Dennis Newnham, president, Hyman will lead Mitsui Foods’ new product development efforts along with agency partner Hillman & Partners. Hyman will also lead business integration efforts for the company.
MEDITERRANEAN DIET TO
BE PROMOTED IN U.S.
A comprehensive plan to promote the healthy Mediterranean style of eating will be pushed in 2007 by Oldways – the non-profit group behind the Whole Grains Stamp, reported Food Navigator. The push will involve a two-part process: a public education campaign to increase consumer’s awareness of the diet’s healthfulness and the launch of a consumer-friendly symbol designed to flag up food products that fit the Mediterranean bill. With a well established and fast growing body of science backing the healthfulness of the diet, there is a strong possibility this could become an important and lasting lifestyle for Americans.
Rich in cereals, fruits, legumes, whole grains, fish and olive oil, the diet of the people of southern Europe has been linked to longer life, less heart disease and protection against some cancers. Great taste is one of the diet’s strong points beyond the scientific backing it has received. The diet pattern is also likely to enjoy considerable popularity because it is non-restrictive which places it at a significant advantage compared to other diet trends that leave consumers craving for more.
Another advantage for the industry is a large number of products already on the market will be able to carry a Mediterranean diet claim, including fresh or frozen vegetables, vegetable meals or stews and pasta meals. Licensing the Mediterranean diet claim from Oldways is expected to involve “modest” costs, according to Oldways president Dun Gifford. The Annual Meeting of the North American Olive Oil Association will take place July 11 at the Grand Hyatt in New York.
AFI’s Town Meeting will take place September 24-26 at the Doubletree Hotel Washington, D.C.
AFI’s ANUGA Reception will take place 6 p.m., October 14 in the Kristallsasl I room of the convention center housing ANUGA in Cologne. Look for complete details soon.
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