Meat + Poultry - July 2004 - 12

Consumer survey reveals consumption contradictions
While about 76 percent of consumers say they have healthy eating
habits, 57 percent of respondents consider themselves to be overweight. This contradiction raises a host of issues for the food industry as it works to address
public concerns about obesity, food safety, portion size and product ingredients, according to
a survey conducted by the Consumer Business
Practice of Deloitte & Touche U.S.A. L.L.P., New
York, N.Y.
Deloitte recently surveyed nearly 4,000 consumers online about healthy eating, eating out,
in-store food options, consumer responsibility
and food purchasing. Several key findings of the
survey include:
* Seventy-four percent of respondents
strongly disagree lawsuits should be allowed against fast food chains.
* More than half of consumers think portion
sizes at fast food establishments are too
large. A hefty 83 percent believe that more healthy food choices
should be offered at these eateries.
* Although 54 percent believe the individual, not the corporation, is
solely responsible for healthy eating, 45 percent believe it's a combination of personal and corporate responsibility.
* Three out of five respondents say the issue of country-of-origin
labels on perishables is extremely or somewhat important to
them. Two-thirds are extremely to somewhat concerned about
eating genetically modified foods.
"Survey respondents mostly claim they try to eat healthy, read

nutrition labels and say that they would like to see more healthy
food menu items, but given that 57 percent of the respondents also
said they were overweight, it appears to be a
struggle for most of us," said Tara Weiner, national
managing partner of Deloitte's Consumer Business Practice. "The survey shows the food industry has a lot of different issues to deal with, many
of which directly contradict one another, making
this such a challenging time for the industry."
Weiner added, "Food corporations that are
quick to understand and respond to consumers'
call for help and provide more healthy menus
may position themselves to achieve a greater
hold in maintaining market share and solidify
brand loyalty with their customers."
Consumers today have a heightened sense
of need to eat nutritional foods, according to the
survey. When asked to define healthy, 52 percent
of respondents said it was eating in moderation,
and 51 percent said it was following the food pyramid hierarchy -
more grains and fruits and less fats and sweets. Only about one in six
said it was through eating low-carbohydrate or low-fat foods.
"While half of the respondents claim they eat healthy meals most
of the time, there remains a portion of the population that is not very
concerned about the issue," said Weiner. "Slightly more than a third
said they eat healthy meals only about half the time, and 13 percent
said they rarely or never eat healthy meals. This response helps explain the food industry's conundrum in attempting to satisfy a wide
range of tastes and eating preferences among the general public."

Wayne Farms building plant in
Alabama

Farmland acquisition boosts
Smithfield sales

Wayne Farms L.L.C., Oakwood, Ga., will begin construction of a
further processing facility in Decatur, Ala., this fall. The project will
take place in three phases and cost approximately $55 million.
"The demand for product and the growth of our business partners has increased significantly, driving our need for growth and expansion," said Elton Maddox, president and C.E.O. "This phase-one
build-out will increase our annual production capacity by more than
40 million pounds."
The 100,000-square-foot plant will support two fully cooked production lines and will be constructed to allow modification and initiation of phases two and three during the next five years. The additional
phases will add an additional four production lines.
According to Guy Hinton, the company's vice president of operations, the new plant will feature segregated fresh and further processed areas and a modular design that allows for enhanced allergen and microbial control.

For fiscal 2004, Smithfield Foods, Smithfield, Va., reported net income of $227 million versus $26.3 million for the previous fiscal year.
Earnings from operations were $163 million compared to $12 million
this past year.
Benefiting from a 27-percent increase in live hog prices year-overyear, the company's Hog Production Group recorded a profit in fiscal
2004 compared to a loss the previous year. Pork segment earnings
increased 17 percent in spite of higher raw material costs. The gain
was due to the inclusion of 6 months of Farmland Foods results.
Overall sales for fiscal 2004 were $9.3 billion compared to $7.1 billion the previous year. "Looking forward to fiscal 2005, the business
looks very good," said Joseph Luter III, chairman and C.E.O. "Live
hog prices look strong for the remainder of the calendar year, and
pork demand is excellent.
"Beef margins for the near term are quite favorable and our processed meats business looks good with several significant opportunities for new business in the near term.

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JULY 2004

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Meat + Poultry - July 2004

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