Food Business News - April 21, 2015 - (Page 9)

Editorial EDITORIAL STAFF Editor-in-chief Morton I. Sosland Executive editor, markets Neil N. Sosland Editor L. Joshua Sosland Executive editor Keith Nunes Senior editor, markets Jay S. Sjerven Managing editor Eric J. Schroeder Senior editor, markets Ron Sterk Associate editor Jeff Gelski Assistant editor, markets Laura Lloyd Internet editors Rebekah Schouten Monica Watrous Contributing editor Donna Berry Graphic designer, market graphics, data Christina Sullivan PUBLISHING STAFF Chairman Charles S. Sosland Vice-chairman L. Joshua Sosland President and publisher Mark Sabo Associate publisher G. Michael Gude David DePaul Bruce Webster North American sales Matt O'Shea Vice-president, chief financial officer Melanie Hepperly Audience development director Don Keating Advertising manager Nora Wages Director of design services Sadowna Conarroe Circulation manager Whitney Forrester Digital systems analyst Marj Potts Manager of advertising design Becky White Director of e-Business Jon Hall Director of on-line advertising and promotions Carrie Fluegge Promotions manager Lon Davis WE'RE EAGER TO RECEIVE YOUR FEEDBACK: E-mail or write to us at Food Business News, 4801 Main Street, Suite 650, Kansas City, Mo, 64112 April 21, 2015 MORTON SOSLAND Food's share of spending declines or an industry where market share is expenses must be appearing currently in the the preferred measure of how a brand form of increased shares for one or another or even company is doing, the food category. This is where the food industry must business needs to understand the continuing see itself competing not only with housing, at downtrend in share occurring in recent years. the top, but personal insurance and pensions, Based on data from the Bureau of Labor Sta- representing 10.8%, and health care, at 7.1%, tistics, the Economic Research Service has along with still smaller entertainment, 5.8%, calculated that food's share of spending by savings, 3.6%, apparel, 3.1%, education, 2.4%, the typical American household dropped and what's left, 3.1%, to account for 100% of 0.4 percentage point in the decade ended in consumer expenditures. The zero sum game 2013. The latter year was the most recent for these calculations. Little has been observed in the past year The zero sum game in which the food industry is or more to indicate that this ever so slight food downtrend is not continuengaged plays out in stark terms. ing to the present day. The specific E.R.S. estimate is that food accounted for 12.9% of typical household spending in 2013, compared with 13.3% in 2004. While it is im- in which the food industry is engaged plays possible to convert this dollar spending into out in stark terms. For an industry that a century or so ago acphysical volume, the parallel observation that food prices increased faster than prices in the counted for as much as a third to even half econom y as a whole may be translated into of household expenditures, the shrinkage to a volume shortfall. Prices for all goods and the 12.9% food share merits elaboration. That services rose by 2.4% per year in the same comes with the further finding that just 7.8% of decade, while food prices climbed 2.8% annu- average household spending is for food eaten ally. Based on post-World War II experience, at home, while 5.1% goes to food eaten away this is a rare period of food price inflation from home. Without seeking to understand outpacing economy-wide inflation. Execu- other calculations showing consumer spendtives of food companies will have no difficul- ing on food eaten at home and food eaten ty recalling the several spurts in ingredient away from home as the same, this breakdown underscores the massive drop in spending for prices happening during this period. Since the E.R.S. makes the point that home consumption. That outlay falling to less shifts in different spending categories often than 8% of spending presents food manufacreflect their level of inflation, it would be turers with the urgent need to find a way to renatural to expect the high food price infla- verse the course of this all-important measure. It was near the end of the 19th and at the tion to result in a larger share. That this did not occur in the decade ended in 2013 accen- start of the 20th century that spending on tuates the importance of this study for the food required half of household outlays. At that time, food was scarce, its quality and food industry. The leadership in household spending is even safety were poor. All that vanished held by housing with 33.6% of total house- as the years passed, convenience became hold spending and transportation, estimated the driving force, and health and wellness at 17.6%. Neither of these leaders is unex- gained. Why that shift did not bring at least pected. Indeed, seeing the relatively high steadiness in food's share of household spending on transportation emphasizes how spending is answered by food losing a bit these calculations are likely to decline be- and competing forces winning more. The cause of the past year's drop in fuel prices time is at hand for food clarity and innovadue to the collapse of the international crude tion that combined will make the industry oil market. This likely fall in transportation the next winner of this never-ending race. FBN F FOODBUSINESS NEWS ® 9

Table of Contents for the Digital Edition of Food Business News - April 21, 2015

Food Business News - April 21, 2015
Wal-Mart eyeing improvements
Drought dilemma for California agriculture
Antibiotics under greater scrutiny
Table of Contents
Web Contents
Editorial - Food’s share of spending declines
Reheating meat sales
A record year for specialty food sales
Innovation insights from Chobani
Target hires merchandiser to reinvent its food business
McDonald’s moves toward simpler ingredients
Tyson Foods to close Georgia plant
Bottled water drove beverage market growth in 2014
I.F.F. plans to buy Ottens Flavors
F.D.A. challenges Kind under ‘healthy’ labeling rules
U.S. organic food sales rise 11% in 2014
Daily’s to build bacon plant
Iconic hot sauce brand, assets acquired
Washington - Antibiotics under greater scrutiny
Health and Wellness - Subtracting sugar from formulations
Ingredient Innovations - Positive fiber signs from Europe
Study links fiber, whole grains to reduced risk of death
Dairy Business News - Hydrocolloids: Managing moisture and more
Ingredient Marketplace 2015
New Food Products
Ingredient Market Trends - Another new chapter for C.W.B.
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - April 21, 2015