Milling & Baking News - January 13, 2009 - 1

THE NEWS WEEKLY OF GRAIN-BASED FOODS
JANUARY 13, 2009

bakingbusiness.com / foodbusinessnews.net

NEWS

Industry shares fall 21% in 2008;
smaller tumble than overall market

I
Pizza Hut introduces
The Natural; crust made
with whole grains
Story on Page 11

LATE NEWS

Kellogg to raise cereal
prices Jan. 18
BATTLE CREEK, MICH. - The Kellogg Co. announced it will raise the
prices on most of its cereal brands as
well as Pop-Tarts toaster pastries beginning Jan. 18. "The effective price
increase across our product portfolio
is in the low-to-mid single digits,"
said Susanne Norwitz, a spokeswoman for Kellogg. Ms. Norwitz said the
company's All-Bran and Special K
brands are not part of the price increase. Kellogg, which most recently
raised the prices of certain cereals in
June and January 2008, said it expects
higher costs on sugar, rice and packaging to continue in 2009. General
Mills, Inc., which is Kellogg's biggest
Continued on Page 8

n a year marked by the worst stock
market performance since the 1930s,
share prices of grain-based foods
companies declined broadly in 2008. The
Grain-Based Foods
Share Index, calculated by Milling &
Baking News, ended
the year at 9,146.77,
down 21%.
For the G.B.F.
index, the performance in 2008 was
the second worst
since the index was
created by Milling
& Baking News in
1988. Only in 1999
did the index lose more ground, falling
28%. The 21% drop last year compared
with a 1% advance in 2007, a 19% gain in
2006 and an 11% decline in 2005.
By a number of significant comparative measures, though, the Grain-Based
Foods Share Index performance in 2008
was not all bad. The 21% decline in
2008 compared with significantly wider

declines for broad market indexes.
The Dow Jones average of industrial
shares was down 34% in 2008, the S&P
500 fell 39% and the Nasdaq index
dropped 41%.
The wide outperformance by
grain-based foods
shares versus the
S&P 500 (17 percentage points in
2008) was consistent with earlier bear market
experiences. For
instance in 2001,
after the Internet
bubble burst, the
Grain-Based Foods Share Index outperformed the S&P by 14 percentage
points and then outperformed by 27
points in 2002.
While the financial sector of the stock
market was hit hardest by the Wall Street
selloff in 2008, every other sector of the
economy also lost ground. In fact, of the
Continued on Page 18

Sara Lee adding 'Nutritional Spotlight'
to Soft & Smooth bread line
DOWNERS GROVE, ILL. - Sara
Lee North American Fresh Bakery
has launched a new nutrition labeling program for its bread, bun and
bagel products. The program, which
will begin this month on the company's Soft & Smooth bread line, complements the Nutrition Facts Panel

currently required on all food products.
The company said it is providing the
information to help consumers "make
fast, informed decisions" about Sara
Lee baked foods they buy.
"We know individuals want convenient, nutritious choices when shopping
at their grocery stores," said Tim Zimmer, vice-president of Sara Lee North
American Fresh Bakery. "The Nutritional Spotlight helps individuals quickly
identify Sara Lee products that contain
the nutrients most important to them
and their families."
The Nutritional Spotlight highlights:
* Calories, total fat, sodium and sugars
Continued on Page 9

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Milling & Baking News - January 13, 2009

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