Milling & Baking News - January 4, 2005 - (Page 1)

Theinewsweeklyiofigrain-basedifoods LATE NEWS KANSAS CITY - Interstate Bakeries Corp. in the fourweek period ended Nov. 13 sustained a net loss of $1.76 million on sales of $259.9 million, according to a Form 8-K filed Dec. 29 with the Securities and Exchange Commission. Earnings before interest, taxes, depreciation and amortization increased in the period to $21.6 million. Previously, I.B.C. had recorded a net loss of $11.3 million on $265 million in sales for the four-week period ended Oct. 16. Direct and indirect labor charges totaled $45.3 million in the four-week period ended Nov. 13, including $12 million "related to Continued on Page 8 I.B.C. sees improvement in financials / JANUARY 4, 2005 Agencies deliver rice, wheat flour to tsunami survivors in Asia, Pacific WASHINGTON - Rice and wheat flour took on vital roles last week when humanitarian organizations started distributing food, water and medical supplies to tsunami survivors as part of an unprecedented global relief effort. The death toll had reached nearly 140,000 by Jan. 2, a week after tsunamis hit countries bordering the Indian Ocean. Indonesia, with about 94,000 dead, was the worst hit. Relief organizations also were in full demand in Sri Lanka, where the death toll totaled more than 29,000 by Jan. 2. In that country the United Nations World Food Programme had 4,000 tonnes of rice, wheat flour, lentils and sugar stockpiled - enough food to feed 500,000 for two weeks. The W.F.P. sent its first truckloads of relief Continued on Page 25 Sara Lee expands whole grain lineup with launch of new bread ST. LOUIS - Sara Lee Bakery Group last week took another step toward expanding its whole grain product lineup with the introduction of Sara Lee Heart Healthy Plus whole grain bread. In the past six months, the company has more than doubled the number of whole grain bread and bagels it sells under the Sara Lee and Earth Grains brand, positioning itself to take advantage of an expected change in the new U.S. Dietary Guidelines for Americans calling for increased consumption of whole grain products. The new bread, which will be available Continued on Page 10 N E W S F E AT U R E Widely varying fortunes called likely for industry again in 2005 O NE CAN SAFELY SAY THIS ABOUT 2004: It offered a little bit of everything for the grain-based foods industry. If form holds, securities analysts say 2005 will offer much of the same. That is, this year could yield another mixed bag of success and disappointment for an industry trying to adapt to an evolving retail environment, shifting customer tastes and myriad cost pressures, some changing and some constant. From low-carbohydrate diets to high-flying commodity prices, 2004 certainly presented its share of challenges for makers of grain-based foods. At the same time, many grain processors, particularly corn and soybean processors, enjoyed outstanding financial success that sent their stock prices soaring - while flour milling struggled as the low-carbohydrate diet fad reduced consumption of many grainbased products during the year. Meanwhile, several industry players that entered 2004 in inside healthy fashion - Kellogg Co. and Flowers Foods, Inc. come to mind - grew even stronger as the year progressed. On the other hand, some businesses that began the year struggling only saw their condition worsen, led by wholesale baking giant Interstate Bakeries Corp., which filed for Chapter 11 bankruptcy in September. "The overall cost of doing business continues to go up," said Andrew Lazar, an industry analyst with Lehman Brothers. "There's a number of challenging fundamental trends here." Those trends include, Mr. Lazar said, intense competition from Continued on Page 21 THIS WEEK Ingredient Bimbo Bakeries set to move headquarters Obesity ranks among top food stories of '04 12 16 Food technologist unveils new rice bread mix 27 Week 31

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Milling & Baking News - January 4, 2005