Milling & Baking News - January 25, 2011 - (Page 1)

THE NEWS WEEKLY OF GRAIN-BASED FOODS JANUARY 25, 2011 / NEWS Stock Market Analysis Analysts see variety of effects on food sector from globalization T A.S.B. names 2011 Hall of Fame inductees Story on Page 9 LATE NEWS Wal-Mart initiative hits grain-based foods BENTONVILLE, ARK. - Grainbased foods were cast in a harsh light in a Jan. 20 announcement by WalMart Stores, Inc. of an initiative to reduce levels of trans fatty acids, sodium and added sugar in the private label food products it sells through its Wal-Mart stores. Explaining the effort, the retailer listed grain-based products atop each list of foods to be targeted for reduction of the inputs. In the case of trans fatty acids, Wal-Mart cited 2004-06 data (largely predating reformulations associated with the 2006 mandate of trans fat labeling) fingering grain-based foods as the source of 40% of dietary trans fat, far Continued on Page 8 he globalization of the world food business, and its impact in the United States, stood out as a principal if wide ranging trend affecting U.S. food companies in interviews conducted recently with Wall Street analysts. Whether investment by U.S. companies in the food sectors of emerging markets worldwide or the acquisitions of U.S. companies by global food giants, globalization was identified by several analysts as playing a pivotal role in how the food business will evolve in the months and years ahead. For the U.S. food industry overall and grain-based foods, the analysts emphasized the importance of being able to raise food prices in 2011 as costs escalate and were guided in their investment opinions toward companies they saw possessing the greatest ability to pass along the higher costs. Among the most prominent ways the U.S. grain-based foods business has witnessed the globalization trend has been the emergence in U.S. baking of Grupo Bimbo S.A. de C.V., Mexico City. From a negligible presence in the early 1990s, Bimbo today is a U.S. baking powerhouse, poised to hold a larger share of the U.S. baking market than any Continued on Page 21 C.P.I. for baked foods, cereals finishes lower for first time since 1976 WASHINGTON - For the first time in 34 years, and only the sixth time since the Bureau of Labor Statistics began tracking the category in 1936, the Consumer Price Index for baked foods and cereal products finished lower in 2010, falling 0.8%. The loss comes on the heels of a three-year stretch in which the index gained 4.4%, 10.2% and 3.2% in 2007, 2008 and 2009, respectively. And, after three years in which the C.P.I. for every category of grain-based foods increased in the 12-month period that ended in December, several categories posted decreases during 2010. The all food at home index, which increased 6.4% in 2008, rose 0.3% in 2010 after rising 0.5% in 2009. It marked only the third time in the past 40 years that the year-over-year gain was less than 1% (it was up 0.7% in 1992). Within the Cereal and Bakery Products category, no sub-categories posted increases of greater than 1% during 2010. The sharpest gain was scored in the frozen and refrigerated bakery products sub-category, which rose 0.7%. Several categories, including cookies and the fresh sweet rolls, coffeecakes and donuts categories, each rose 0.5%. The price index for Bakery Products fell 0.4% in 2010, which compared with Continued on Page 16

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Milling & Baking News - January 25, 2011