Baking & Snack - May 2014 - 14

Protein consumption rising, carbs falling
A move in consumer habits toward proteinrich foods and away from carbohydrates
"shows no signs of abating," said Robert
Moskow, an investment analyst with Credit
Suisse in New York.
In a research brief titled "The Return of
the Caveman," Mr. Moskow said the shift to
protein is "big and is likely to continue" and
should factor into the considerations of investors as they formulate long-term theses on individual stocks in
the food sector.
"Using Nielsen data, we found that volume consumption of carbrich foods has fallen 5% over the past four years, while consumption
of protein-rich foods has increased 7%," he said. "Unlike the Atkins
diet fad of the mid-2000s, this demand shift appears to have staying power as consumers holistically try to increase the 'good fats'
in their diet and reduce the amount of gluten and processed sugars. We view Kellogg as particularly vulnerable to this mega trend
and view Hillshire, Hormel,
Tyson, and Kraft Foods as
the biggest beneficiaries."
Beyond the consumption
trends, Mr. Moskow cited a
recent study by NPD Group
indicating that 33% of adults
want to reduce or eliminate
gluten from their diets, an increase from 25% three years
ago. In many instances, a desire to "feel better" is prompting this shift. Increasingly, nutritionists are recommending
gluten reduction for patients
suffering from auto-immune
disorders, rheumatoid arthritis and neurological disorders,
he said.

"We think this trend will continue as more Americans seek
professional advice on how to alter their diets to address disease
concerns," he said, citing the 1.8 million Americans having celiac
disease, with 83% of them remaining undiagnosed, according to a
study by the Mayo Clinic.
Additionally, carbohydrate-rich foods have been blamed as a driver
of "rising obesity rates," Mr. Moskow said.
"This is due to presence of added sugars and 'empty calories' in
refined grain products," he said. "Efforts by the manufacturers to
put more emphasis on whole grain ingredients across their product lines have so far failed to turn back the negative perception."
Rather than reflecting a belief that increased meat consumption is healthier, gains in this sector reflect a desire by consumers to compensate for the proliferation of carbohydrate-rich
foods that entered the marketplace during the past generation,
Mr. Moskow said.
"The snack category expanded dramatically over the past
20 years as manufacturers responded to the demands of timecrunched consumers with a flood of chewy granola bars, potato
chips, tortilla chips and snack crackers," he said. "Parents came to
the realization that these great-tasting products were crowding out
the protein from their children's diets and that the ones with high
sugar content were causing peaks and valleys in their children's
energy levels. Health-conscious parents have responded in some
strange ways such as preparing unhealthy foods for their children
in the morning, like bacon and sausages, to make sure they are
satiated during the day."
- L. Joshua Sosland, Milling & Baking News

Shearer's gobbles up Medallion Foods

Brewster, OH-based Shearer's Foods, a private-label salty snack
manufacturer owned by private equity firm Wind Point Partners,
Toronto, has acquired the assets of the Medallion Foods business from ConAgra Foods, Omaha, for $33.5 million. Located at
Newport, AR, Medallion manufactures value brand and privatelabel corn-based snack products, including tortilla chips, corn
chips and extruded corn products.
"Although ConAgra Foods believes strongly in the salty snacks
category, the Medallion Foods business is not large enough within

14 Baking & Snack May 2014 / www.bakingandsnack.com

ConAgra Foods to command the resources it needs to grow -
particularly in light of the current focus on the broader Ralcorp
integration," ConAgra said. "As a result, ConAgra Foods believes
the Medallion Foods business will have more value under a more
focused owner."
ConAgra acquired Medallion Foods as part of its purchase of
Ralcorp Holdings, Inc. in early 2013. Ralcorp bought Medallion
Foods for $101.8 million in June 2005.
- Eric Schroeder, Milling & Baking News

http://www.bakingandsnack.com

Baking & Snack - May 2014

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