Milling & Baking News - May 1, 2012 - 14

Industry Activities 

Depth of challenges for baking seen underscoring A.B.A. value
SCOTTSDALE, ARIZ. — While the American Bakers Association gathered in 2012 amid extreme challenges coming from numerous directions, Allen L. Shiver, chairman of the A.B.A., said the problems underscored the value of the association and the importance of active membership. Speaking April 15 at the A.B.A. membership and board of governors meeting at the Fairmont Scottsdale Princess in Scottsdale, Mr. Shiver, who is president of Flowers Foods, Inc., Thomasville, Ga., cited high commodity prices, consumers feeling economic pressure and softness in Shiver the baked foods category as principal challenges facing bakers. “And then Washington is more active than ever,” Mr. Shiver said. “In this difficult environment the A.B.A. has been a constant amid change. They give us a stronger, a unified voice.” The session was part of the A.B.A. annual meeting held April 14-18. Describing A.B.A. accomplishments over the past year, Mr. Shiver credited the group for having a significant impact on the final creation of the MyPlate icon that replaced the Food Guide Pyramid of the U.S. Department of Agriculture. Grains hold a prominent position in the new icon. “Food safety was another area of work for the A.B.A.,” Mr. Shiver said. “They have worked to address the duplication and waste of multiple audit formats. Our Montgomery (Ala.) plant prepares for a completely different audit just about every week.” He also cited good progress toward updating the decades old baking industry equipment sanitation standards. In a presentation by A.B.A. treasurer Albert R. Lepage, chairman of Lepage

Bakeries, Auburn, Maine, the A.B.A.’s financial picture was described as sound but with challenges needing to be addressed. In particular, consolidation in the baking industry is necessitating a 13% dues increase for baker and allied members. The dues increase was the first in the past three years. As part of the dues revision, new membership categories have been introduced to reflect the widening size spread between the various baking businesses. In addition to new multi-billion dollar categories, segments for A.B.A. membership were created for businesses with sales less than $10 million and for sales between $10 million and $25 million. Elected chairman of the A.B.A. during the board of governors meeting was Harold (Robin) Alton, president and c.e.o. of Pan-O-Gold Baking Co., St. Cloud, Minn.; first vice-chairman, Fred Penny, executive vice-president, Bimbo Bakeries USA, Horsham, Pa.; second vice-chairman, Richard G. Scalise, chief executive officer, Hearthside Food Solutions L.L.C., Downers Grove, Ill.; and treasurer, Mr. Lepage, chairman, Lepage Bakeries, Auburn, Maine; and immediate past chairman, Mr. Shiver. MBN between high-income shoppers, or those households with $100,000 in annual income and more, and lower income consumers with $45,000 or less in yearly earnings. Specifically, 48% of lower income shoppers are “doing without” and buying less food compared with 24% of high income shoppers. Moreover, 35% of lower income households said they’re making fewer trips to the store and 31% match their shopping trips to their paycheck. That compared to 14% of high-income households making fewer trips to the store and only 9% matching their trip spending to their paychecks. Mr. Hill expected a long and slow economic recovery. He noted that it took 2.6 years for the economy to recover after the 1990 recession and 3.9 years after the 2001 recession. Based on the current rate, he projected a full recovery from the most recent recession won’t happen until the 2015-2020 period. Mr. Hill said bakers should target Gen Y shoppers, or people born from 1977 to 1994 that have become the largest consumer group in U.S. history. These young shoppers are moving into the high consumption years and will soon spend the most per shopping trip. Eventually, Mr. Hill noted, the 65 years and older group will be the largest population group, although they tend to spend the least per shopping trip. MBN
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Shoppers spending more and buying less
SCOTTSDALE, ARIZ. — Consumers are spending more and buying fewer groceries as food prices continue to rise and income remains the same, Robert Hill, president and chief executive officer of Acosta Sales & Marketing, told members of the American Bakers Association at its annual meeting in Scottsdale in late April. Although many consumers still feel the effects of the recession, the overall situation improved over last year when nearly all shoppers reduced Hill their spending, Mr. Hill added. But persistent underemployment and rising gas prices continue to put a damper on spending for many consumers. To make ends meet, shoppers are managing their budget much more like a business by making lists prior to visiting a store, spending more money on sale items and avoiding impulse purchases. Specifically, 54% of shoppers surveyed are buying more items on sale, 51% cook more frequently at home, 48% stock up on a category when it’s on sale and 47% are eating less frequently at restaurants, according to research by the Jacksonville,
14 / May 1, 2012 Milling & Baking News

Fla.-based sales and marketing agency serving consumer packaged goods companies and retailers across the United States and Canada. When in the grocery store, around two-thirds of shoppers noted they compare the price per ounce listed on shelf tags when deciding which food products they wanted to buy, according to Acosta research. Most consumers still rely on sales flyers mailed to their homes and the Sunday newspaper coupon section for finding deals, although the digital media is becoming increasingly important. “Don’t get too far from the basics,” Mr. Hill said. Although the economy has improved since 2009, consumers continue to purchase store brands, although the move toward private label has slowed. In fact, only 39% of shoppers recently surveyed in February indicated they are buying more store brands to save money compared with 61% of those polled in July 2009, the research showed. Mr. Hill indicated there is a schism

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Milling & Baking News - May 1, 2012

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