June 13, 2007

Higher milk prices taking a bone from profits

On Tuesday, Dean Foods Co., the largest U.S. dairy company, warned that higher raw milk prices and an oversupply of organic milk will weigh on its full-year profit.

"We are faced with an unusually broad set of challenges across the portfolio," said Gregg Engles, chairman and CEO. "First, conventional milk prices have risen rapidly and forecasts for the back half of the year have increased significantly as foreign and domestic market forces have combined to put significant pressure on the U.S. dairy industry. As a result, it has become increasingly likely that conventional raw milk prices will reach all-time highs by the third quarter."

The company also said its Horizon Organic brand is facing a "significant near-term industry-wide oversupply" of raw organic milk, which is causing Dean Foods to lower prices in the face of competition.

Milk prices are up more than 30% this year and expected to go higher. In May, a commodity outlook report from the USDA said that strong demand for dairy products and limited ability to adjust production in the short term has resulted in significantly higher price forecasts. Milk production forecasts for both 2007 and 2008 are expected to go higher but relatively high feed costs are expected to limit growth into 2008.

In May, the Hershey Company revised their earnings outlook for 2007 as a result of increasing dairy input costs. The company said that because of higher dairy costs their 2007 revised outlook will result in diluted earnings per share from operations of $0.34 - $0.35.

Last week, Wimm-Bill-Dann Foods, a major Russian dairy producer, said that rising dry milk prices on international markets could significantly increase the company's costs in upcoming quarters. Russia is not self-sufficient in raw milk and has to import considerable volumes of dry milk from abroad.

Prices of dairy products are currently at historically high levels. The FAO price index of traded dairy products has risen by 46% since November 2006. International prices for milk powders have increased most, as stocks in the European Union have disappeared.

The outlook for 2007 is for stronger growth in global milk supply, which may increase by 2.7%, sustained largely by expansion in those countries more responsive to international prices. According to the FAO, drought in Australia, suspension of milk powder exports by India, and Argentina’s export taxes are restraining export supply in the short term.

Survey: Higher prices forcing food product reformulation?

Are higher prices for basic commodities such as dairy or grain forcing product developers to reformulate food products? The survey is anonymous and results are viewable after you respond. Take the survey here >>

In the May 20th newsletter we posted a quick online survey about food ingredient sourcing and country of origin. Results are below. Thanks to all who participated!

Compared to a year ago, the country source for choosing a food ingredient is:
-About the same as last year: 55 (18%)
-Country origin is never a factor in purchase decisions: 15 (5%)
-Less important: 7 (2%)
-More important: 158 (54%)
-The "deciding" factor: 57 (19%)

New products boost brain health

Launches of new products that claim to boost mental health have grown substantially since 2005, according to Mintel in the latest Product Development Focus published on IFT.org. New brain-boosting products have launched in nearly all product categories, including ice cream and confectionery.

Visit Product Development Focus: Brain Health for more information.

Research Briefs

Applications of chitosan in foods

Chitosan is a modified, natural biopolymer derived by deacetylation of chitin, a major component of the shells of crustacean. Recently, chitosan has received increased attention for its commercial applications in the biomedical, food, and chemical industries. Use of chitosan in the food industry is important due to its distinctive biological activities and functional properties. The antimicrobial activity and film-forming property of chitosan make it a potential food preservative or coating material of natural origin. This review focuses on the applications of chitosan for improvement of quality and shelf life of various foods.

Applications of Chitosan for Improvement of Quality and Shelf Life of Foods: A Review
Journal Food Science Online Early
doi:10.1111/j.1750-3841.2007.00383.x

(If you're a JFS subscriber, log in here to access the full article.)

Peanut flour offers protein, texture, and flavor

Nutrition bars, salad dressings, and sauces are examples of applications that benefit from the flavors, textures, and proteins provided by peanut flour. Now, tests by USDA ARS scientists have shown that lower-fat peanut flours can thicken more effectively than higher-fat ones.

The researchers, who work at the Market Quality and Handling Research Unit, Raleigh, N.C., report this and other new findings about the versatile flour in the Journal of Texture Studies (volume 38, pages 253 to 272).

For details, contact: Jack P. Davis, (919) 515-6312; USDA-ARS Market Quality and Handling Research Unit, Raleigh, N.C.

Flavonoid database updated

Health-imparting plant compounds called flavonoids -- like the cyanidin in cherries or catechins in tea -- may reduce risk of certain diseases, studies have suggested. A newly updated, easy-to-use database from ARS nutrition researchers documents levels of 26 key flavonoids in about 400 fruits, vegetables, and other foods.

For more, see the USDA Database for the Flavonoid Content of Selected Foods, Release 2.1 (2007) at: www.ars.usda.gov/nutrientdata/flav.

Company News

Barry Callebaut opens new North American office in Chicago

Barry Callebaut, a leading manufacturer of high-quality cocoa, industrial chocolate, and confectionery products, has opened its new North American head office in Chicago, Ill.

"Barry Callebaut is committed to becoming the No. 1 industrial chocolate manufacturer in the United States," said Massimo Garavaglia, president of Food Manufacturers and Gourmet & Specialties North America for Barry Callebaut. "As part of that commitment, we’re excited to be putting down roots in Chicago, which is centrally located and will give us even greater access to our customers throughout the country."

According to Garavaglia, the company recently announced a strategic supply and innovation partnership with The Hershey Company, North America’s leading manufacturer of quality consumer chocolate and confectionery products. The agreement with Hershey will transform Barry Callebaut’s business in North America by significantly strengthening its factory network and doubling its production capacity in the Americas region.

The company is focused on research and development activities that will provide new, innovative chocolate taste experiences for its industrial and gourmet customers in North America. For example, Barry Callebaut recently introduced several new single-origin chocolates under its Callebaut and Cacao Barry brands, which have distinct, signature flavor profiles and are grown in unique locations all over the world.

In conjunction with the opening of the new office in Chicago, Barry Callebaut announced the following senior management team for the region:

Massimo Garavaglia, president, Food Manufacturers and Gourmet & Specialties North America, is responsible for overseeing Barry Callebaut’s operations, sales and marketing in North America. Garavaglia joined the company in 1992.

James G. (Jerry) Hagedorn, chief financial officer North America, is responsible for the company’s financial operations in the region. Hagedorn joined Barry Callebaut in 2003.

Johannes C. E. Thys, vice president of Operations and Supply Chain North America, is responsible for overseeing operations and production in North America. Thys joined Barry Callebaut in 1997.

Eric Martinet, vice president of Gourmet & Specialties North America, is responsible for the sales and marketing of Barry Callebaut’s gourmet brands, including Callebaut, Cacao Barry and Carma. Martinet joined Barry Callebaut in 2004.

EU Court upholds "Budweiser" trademark

An EU court upheld several trademarks for the name “Budweiser” granted to Anheuser-Busch Cos. The court rejected appeals from the Czech firm, Budejovicky Budvar NP. The two companies have contested the ownership of the name since 1911. Budvar, which is owned by the Czech government, says the name has been associated with beer made in the vicinity of Ceské Budejovice since about 1265. Anheuser argues it started using the Budweiser name in 1876, before Budejovicky Budvar was founded in 1895.

Ajinomoto launches capsinoids information center

Ajinomoto announced the launch of a Capsinoids Information Center, the company’s initiative to educate health professionals and consumers about health attributes associated with capsinoids. Capsinoids are a family of compounds derived from the CH-19 sweet chili pepper that do not express the extreme pungency of hot chili peppers.

CH-19 Sweet has been bred to produce a much higher level of capsinoids, with very low levels of capsaicin. Scientific articles by researchers at Kyoto University in Japan note that the capsinoids of the CH-19 Sweet peppers activate the same types of receptors and appear to offer similar benefits as those associated with capsaicin found in hot chili peppers.

Anecdotally, it has said that capsaicin is the component in chili peppers which creates the physical sensation of burning and sweating after eating peppers, and also increases fat burning or "thermogenesis" in people. While some research is consistent with the theory that adding enough hot chili peppers to the diet will make people burn slightly more body fat than they otherwise would, their extreme pungency excludes them as a regular part of the diet for most people.

"Recent research supports the hypothesis that capsinoids can be an effective adjunct with the potential to assist many individuals in their weight management efforts," said Robert Bursey, PhD, president, Ajinomoto Corporate Services LLC. "We believe it is important to disseminate scientifically based information so that health professionals and consumers can assess the possible value of capsinoids in their daily diets."

For more, see http://www.capsinoids.com/.

Dupont and Tate & Lyle to produce bio-based industrial chemical

Dupont and Tate & Lyle have formed a joint venture to market and promote their new Bio-PDO™ product. DuPont Tate & Lyle Bio Products, LLC have opened a new production facility to produce the product.

The Loudon, Tenn. facility produces 1,3-propanediol (Bio-PDO™) from renewable resources (corn sugar) -- making it the first facility in the world to manufacture this new bio-based product. The product is a biodegradable and high-performance ingredient that can be used in cosmetics, liquid detergents, and industrial applications such as anti-freeze and many other applications that currently use glycols. It also can be used as a monomer to produce unsaturated polyester resins as well as other specialty polymers.

The joint venture uses a proprietary fermentation process developed jointly by DuPont and Tate & Lyle to produce Bio-PDO using corn sugar instead of petroleum-based feedstocks. The production of ingredient is said to consume 40% less energy and reduces greenhouse gas emissions by 20% compared to petroleum-based propanediol. Annual production of 100 million pounds of Bio-PDO will save the energy equivalent of over 15 million gallons of gasoline per year.

The American Chemical Society has presented the research teams involved in the development of Bio-PDO with the 2007 Heroes of Chemistry award. The program highlights the vital role of industrial chemical scientists and their companies in improving human welfare through successful commercial innovations and products. Recipients are selected based on the technical merit of the chemical innovation, including talent and foresight demonstrated by the nominees, the commercial impact of the products on the marketplace, and the benefits to mankind through the products’ performance. Representing the teams and organizations receiving the award were: Charlie Nakamura and Cathy Babowitz of DuPont, Dennis Adkesson of Tate & Lyle, and Gregg Whited of Genencor International.

ADM to build new cocoa facility in Ghana

Archer Daniels Midland Company will build a new cocoa processing facility in Kumasi, Ghana. The plant will diversify and expand ADM’s global cocoa origination and processing operations into a strategically important location, and, the company says, will bring value to its customers by offering cocoa products from a single source.

"This investment demonstrates ADM’s commitment to expand our premier position in the agricultural processing value chain," commented Mark Bemis, president, ADM Cocoa. "Our strategy includes the geographic expansion of our food processing and distribution network."

Construction, pending final permitting approvals, is set to begin this year.

CSM acquires Titterington’s

Bakery products supplier CSM NV announced on Tuesday that it has reached an agreement on the acquisition of Titterington's, based in Woburn, Massachusetts (near Boston) for approximately $23 million.

The acquisition was effective June 11, 2007. Titterington's is a supplier of products such as scones, muffins, cakes, and pastries to the food service and out-of-home market segments. Titterington's operates a production facility in Woburn and has 190 employees. Sales amount to $30 million.

Regulatory News

FDA starts tomato safety initiative

The Food and Drug Administration (FDA) will begin a Tomato Safety Initiative in the Summer of 2007. The Initiative is a collaborative effort between FDA and the state health and agriculture departments in Virginia and Florida, in cooperation with several universities and members of the produce industry. FDA developed the Tomato Safety Initiative in response to recurring Salmonella outbreaks associated with fresh and fresh-cut tomatoes.

For more, see http://www.cfsan.fda.gov/~dms/tomsafe.html.

FDA: guidelines for refrigerated carrot juice

The U.S. FDA CFSAN has posted a guide for industry on Refrigerated Carrot Juice and Other Refrigerated Low-Acid Juices: www.cfsan.fda.gov/~dms/juicgu15.html.

Views needed on baobab and echium ingredients

The UK Food Standards Agency (FSA) is seeking comments on its two draft opinions on refined echium oil and baobab dried fruit pulp.

Echium oil is a vegetable oil rich in omega-6 and omega-3 polyunsaturated fatty acids. It is obtained by super fefining oil extracted from the seeds of Echium plantagineum. Croda Chemicals Europe Ltd wants to use its refined echium oil as a novel food ingredient in a range of food products (including milk and yoghurt based drinks, breakfast cereals and nutrition bars) and in food supplements.

Baobab dried fruit pulp is derived from the fruits (pictured) of the baobab tree (Adansonia digitata), also known as the 'upside down tree'.

PhytoTrade Africa proposes to market a baobab dried fruit pulp as a novel food ingredient for use in a range of food products such as smoothies and cereal bars. The level of baobab dried fruit pulp in this product will be between 5 and 15%. The applicant also intends to market a de-pectinated baobab fruit pulp as a novel food ingredient for use in other food products such as biscuits, confectionery, and other related food products.

Novel foods are foods that do not have a significant history of consumption within the European Union before May 1997. Such foods are subject to a pre-market safety assessment before a decision is made on whether they can be marketed in the EU.

The ACNFP is a non-statutory, independent body of scientific experts that advises the Food Standards Agency on any matters relating to novel foods (including genetically modified foods) and novel processes (including food irradiation).

Any comments on the ACNFP's draft opinion should be sent to the ACNFP secretariat by 20 June 2007.

For more, see the FSA website.

EU adds to list of protected food products

The European Commission Monday said that a salty cheese from southern Poland and a type of French goat's milk cheese have been added to a list of protected products.

This classification means that similar products from other parts of Europe or anywhere else in the world can't be sold with labels or associations linked to Poland's "bryndza podhalanska" cheese and France's "banon."

FAO: Food import costs increasing

Global food import bills are increasing, partly due to soaring demand for biofuels, according to FAO’s latest Food Outlook report. Global expenditures on imported foodstuffs look set to surpass US$400 billion in 2007, almost 5% above the record of the previous year.. Import bills for grains and food oils are forecast to rise by as much as 13% from 2006, the report said.

More expensive feed ingredients will lead to higher prices for meat and dairy products, raising expenditures on imports of those commodities. In several cases, such as for meat and rice, larger world purchases are likely to drive import bills up.

In the case of sugar, generally high and volatile prices could lead to smaller import volumes, which is likely to result in a drop in the cost of global sugar imports, the report said.

FAO’s new food quality and standards website

FAO's Food Quality and Standards Service (AGNS) has launched its new website at www.fao.org/ag/agn/agns.

IFT & Meeting News

Fruit and vegetables and human health

The 2nd International Symposium on Human Health Effects of Fruits and Vegetables will be held October 9-13, 2007 in Houston, Texas. The program includes sessions focused on certain diseases such as obesity, cancer, cardiovascular diseases, brain health, and bioavailability. The symposium will cover different fruits, vegetables, and nuts, and how pre- and post-harvest factors, organic cultivation, and isolation and characterization of bioactive compounds can provide protective effects on the diseases. For more detailed information, please visit the website: http://favhealth2007.tamu.edu/.

Sensory evaluation workshop at Univ. of Arkansas

A workshop, sponsored by the Dept. of Food Science at the University of Arkansas, that is intended for people who wish to learn more about the different types of sensory panels and how to properly use them will be held on June 26-27, 2007 at the Food Science Department building at the University of Arkansas, Fayetteville, AR. For more, contact: Steven C. Seideman, Institute of Food Science & Engineering, University of Arkansas, 2650 North Young Ave., Fayetteville, AR 72704, 479-575-4221, FAX: 479-575-2165, or e-mail: seideman@uark.edu.

IFT in the news

On Monday, a San Francisco NPR-affiliate radio program aired an interview on the topic of food safety.

Participating in the interview were William Hubbard, former Associate Commissioner of the Food and Drug Administration and Advisor to the Coalition for a Stronger FDA; Roger Clemens, as a spokesperson for the Institute of Food Technologists; and Caroline Smith-DeWaal, Food Safety Director at Center for Science in the Public Interest.

To hear the broadcast, visit http://yourcallradio.org/archive/archive.html and click on 06.11.07.

Find out what IFT experts and others are saying in news stories around the world in the new IFT in the News feature on IFT.org.