Milling & Baking News - February 1, 2005 - (Page 1)

Theinewsweeklyiofigrain-basedifoods / Signs of progress at AIPC send share price surging E D I T O R I A L After the Guidelines: An industry agenda KANSAS CITY - A return to profitability, improved sales of Mueller's pasta and early indications that a price increase was not encountering customer resistance sent share prices of American Italian Pasta Co. soaring on Jan. 26. Following more than a year of steadily worsening financial news, the beleaguered pasta maker's shares rose $4.50 on Jan. 26, closing at $25.45. The 21.5% gain made it the leading gainer Jan. 26 on the New York Stock Exchange. While company executives cautioned last week that the current environment for pasta demand was still highly volatile, the market move appeared to suggest mounting confidence that the consumers' flight from pasta was ending. Net income of AIPC in the first quarter ended Dec. 31 was $2,097,000, equal to 12c per share on the common stock, down 73% from $8,127,000, or 45c per share, in the first quarter last year. The first-quarter $2 million profit contrasted with a loss of $12.2 million in the fourth quarter of fiscal 2004. Net sales in the first quarter were $99,121,000, down 2.4% from the first quarter the previous year. "We are encouraged by the progress we made in the first quarter and our return to profitability, given the challenging industry environment and the restructuring activities of last year," said Timothy S. Webster, AIPC president and chief executive officer. "While we made significant improvements on a number of important operational and strategic fronts, we still have a lot to accomplish over the remainder of the year. Our production and manufacturing cost efficiencies continue to improve after the implementation of our restructuring and rightsizing program, and we expect to achieve Continued on Page 15 I s it good for grain-based foods? A considered look at the recently-issued 2005 Dietary Guidelines for Americans yields no simple answer to this question. Instead, careful examination produces reasons for the industry being relieved, if not pleased, with the outcome, which turned out to be much better than the grimmest expectations. Yet, there's also no reason for satisfaction with the federal government telling Americans they should reduce the amount of grain-based foods they eat and also should radically change the kinds of grain foods in their diets. The "key recommendation" calling for a diet balanced 50-50 between whole grains and enriched grains generally has been painted as a positive for the industry since it appears to maintain the centrality of grain-based foods in what the government says people should eat. Not to be overlooked on the negative side, though, is the wording within the Dietary Guidelines that is critical of "refined grains." Still worse is the recommended reduction of one or two servings per day in the quantity of grain-based foods eaten. From what the 2000 guidelines recommend, this is a suggested consumption decrease of as much as 22 per cent. As important as it may be to ruminate over what has happened and what it means, the industry does not have the luxury of letting time pass while it considers long-term implications of the recommendations. It is impossible to overstate the importance for grain-based foods of ensuring the soon-to-be released food guide graphic, which is likely to replace the Food Guide Pyramid, has the more benign tone of the Dietary Guidelines' key recommendation than the sneering attitude toward refined grains incorporated into the body of the text. Beyond the need to address this hugely important immediate concern, there is no shortage of other actions the industry must take in the wake of publication of the Dietary Guidelines. Ten suggested action steps for grain-based foods, as individual companies and as an industry, follow: N E W S F E AT U R E Science Experiment: 1. Don't let up with the government. The industry produces healthful products, and it should continue working to have its voice heard on this matter. It should step back, critique its failings in arguing its case last year, and get back at it. In the 1930s, legislation was brought before Congress that would have Continued on Page 7 Baking labs in schools seen as way to reach youth Story on Page 23 inside FEBRUARY 1, 2005 THIS WEEK Ingredient Flowers to air Super Bowl TV spot Blast damages ADM mill at Enid 9 14 Adjustment sought for trans-fat labeling date Week 30 31

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Milling & Baking News - February 1, 2005